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Kenneth Lowe

Ken Lowe

Interview Date: December 1, 2016
Interview Location: New York City, NY USA
Interviewer: Seth Arenstein
Collection: Cable Center Hauser Oral History Project

SETH ARENSTEIN: Hi, I’m Seth Arenstein. I’m here for the Hauser Oral History Project for The Cable Center. It’s December 1st, 2016. We’re in New York City, and we are here joined by the chairman of the board, the president, and the CEO of Scripps Networks Interactive, Ken Lowe. Ken, welcome.

KEN LOWE: Thank you. It’s great to be here.

SETH ARENSTEIN: And I should mention that this is part two of your oral history. Steve Nelson did your oral history, part one. Really good one, by the way, I thought it was very interesting --

KEN LOWE: Thank you.

SETH ARENSTEIN: -- back in 2005. So now we have about an hour to go over 11 years. Are you ready?

KEN LOWE: I’m ready. It’s hard to believe it’s been since 2005 since I sat down with Steve.

SETH ARENSTEIN: So I guess one question that comes to mind by reading your title -- President, CEO, Chairman of the Board -- how does one person do three jobs?

KEN LOWE: You have great people surrounding you, that’s for sure. Very fortunate. It’s been -- this is my 36th year with Scripps. Started out in the radio division, oversaw their television division, and was fortunate enough to have the idea for HGTV and the company wanted to back that idea, and it grew into the cable network division. So with that comes some responsibilities and along the way, a few titles. So I’ve been very fortunate.

SETH ARENSTEIN: You know, it’s funny. I was going through your 2005 oral history, and I -- an old journalist, I’m trying to find something to trip you up on, but gee, I really couldn’t find anything. I mean, you said so many interesting things in that interview and made a couple predictions and -- pretty much came true. So I have nothing to trip you up on, unfortunately.

KEN LOWE: Well, I’m sure over the course of the interview you’ll find something.

SETH ARENSTEIN: All right. So let’s pick it up from about 2005. So what did Scripps look like in 2005? What kind of carriage did you have? Who was on your slate, who was on your programming slate? Just remind us.

KEN LOWE: Sure. Well, you know, in preparing for the interview, I had to myself think back. Because so many things have happened. At that time, I was the CEO of the E.W. Scripps Company, which was a larger media-holding company, and our lifestyle media networks -- our cable networks -- were one of the divisions. We had newspapers, television stations, and the cable networks. The cable networks were really coming into their own at a time, being a good journalist, when newspapers and broadcast television was really starting to get some headwinds. So it was becoming very obvious, to the management team and to our shareholders, that really the shining star of the company were the cable networks.

But being a good, family-controlled company -- the Scripps family was very, very emotionally involved in all the businesses -- we wanted to continue. But we knew, probably down the road, the cable networks would probably have to be spun out on their own. But at that time, shows like House Hunters on HGTV were really starting to break through. Food Network Star was a show that was starting to really peak on the Food Network.

And at the same time, domestic growth was really peaking. We were topping out on a hundred million households. We were fully distributed cable networks. And we had added the DIY Network, we had added the Cooking Channel. So really, it was a great time for the cable networks. They were growing like Topsy, as they say in the South, and really becoming what we’d envisioned years ago when we started these things, as what was going to be the focal point of our company.

And we were starting to get recognized. It sounds funny now, but for the longest time -- and if you go back and look to the older interview -- it took us a while to gain some respect. We were a small lifestyle group, and everybody said, “Hey, these are nice little businesses, but they’re not going to be huge. Never going to be some of the big cable networks.” And during that period, it was becoming obvious that they had the potential to be. And so it was a great time for the cable network business. Not a great time in the newspaper and broadcast division businesses.

At the same time, we had a very supportive board, who were spending a lot of time just thinking about the future and what was the best way for us as a management team to expend our resources and time. As an example, about 25 percent of our business was devouring about 70 percent of management’s time. It was obvious that we needed, as a company, to put more focus on this cable network division.

Now, we wouldn’t spin them out into a public company, into a separate public company, for three more years, until 2008. But even at that time, you were beginning to sense that, okay, this is a business that can support a standalone public company.

SETH ARENSTEIN: Filling in the canvas, Ken, how many employees were there in 2005 and how many are there today? And if I turned on my set back in 2011 -- 2005, rather, 11 years ago -- what would I find on HGTV? What would I find on Food Network?

KEN LOWE: Great questions, because at the time, we were probably beginning to approach a thousand employees, and now we’re approaching four thousand. But as far as turning on your television, it was very reflective -- and I think that’s one of the reasons that we’ve been successful, because we’ve been somewhat of a mirror, if you will, to society. We haven’t necessarily tried to lead in trends in home improvement, home design, decorating, etc. But we certainly tried to follow and be reflective. And the same in food.

And if you recall, we were leading up to a pretty tough period for the housing industry, in the later 2000s, when we really had the housing downfall, if you will. So at that time, there was a lot of decorating and design. But there’s also some house flipping. And there was also some exuberance in the whole housing market that, while not completely unfounded from a standpoint of passion and “this is where I want to invest some of my money,” some of the folks were invested beyond just one home. So we got caught up in that a little bit.

I remember Businessweek Magazine came out with an article after the housing bust, and one of the reasons they said was the problem with the housing industry was HGTV. It got people too excited about their homes. We didn’t quite buy into that theory. But the point I’m making is, if you go back, it was pretty frothy in the home-building industry at that time. Ironically, when the housing bust did come along, it allowed us to move into more redesign, redecorating, reinvesting, if you will. And not some of this craziness about how many homes can you own, as opposed to what’s your home and what’s your passion really about.

SETH ARENSTEIN: Can you remember back then, around the time of the housing bubble, of busting -- again, we’re looking back years later and saying, “Oh, well, we knew that we could move into redecoration and redesign.” But what was it -- what did it feel like at that point?

KEN LOWE: Well, there were several things, not the least of which was advertising. Our cable networks are unique in the sense that we probably have more advertising as a percentage of our business than most. Most are 50-50 subscriber fees and advertising. We’re more 70-30. So the advertising market actually was probably more of a negative impact to us than was really what going on in the housing industry.

People’s passion for their home -- that never changed. It was a financial correction. It was just an overexuberance on home loans. There was really -- people had their hair on fire about, “Oh, this is a market that’s never going to go backward.” So that got a little bit out of whack. But once we got through that bubble, the passion, the heart-to-home, that connection, it never really changed. Once we got over that bump, we didn’t have to change our programming very much on HGTV.

Ironically, during that period, we saw a spike in comfort food on the Food Network. Because what people were doing is what we always do in times of trouble, in times of concern, what do you do? You eat. You go to Mom’s, right? You go to Grandma’s. So we -- ironically, what we were noticing on the Food Network, instead of some of the crazy recipes and cooking and fun -- which it was still a fun network, but -- comfort food just went crazy. And if you go back and look at when hamburgers really started taking off again in the United States, a lot of that was during that period. Because people were downsizing a little bit, they were being more concerned about their food budget. But it was being reflected in the kitchens around the country as well.

So it was interesting to have those two barometers, if you will. The home category and the food category. And we could watch. As one was impacted to the negative side, the other went, in my opinion, a little more positive, from getting back to home and getting back to the kitchen.

SETH ARENSTEIN: Just out of curiosity, a question occurred to me. We talked about the home problems and then moving into redesign. Did that inform, perhaps, your strategy on food, when people were starting to say, “Oh, well, comfort food’s great, but we really have to watch our waistlines, we have to watch our nutrition, and we have to be healthier.” I would think, with your experience from the home side, you’d said, “Look, okay, people aren’t going to stop eating. But where are they going to go?” You would start to look at different types of programming for food.

KEN LOWE: Well, look, it’s a very insightful question, because those truly were -- no pun intended -- the salad days for the Food Network. But I mean that in the sense of the ratings and the popularity. It absolutely soared. Many times, Food Network was the number-one cable network in prime time. Some of that had to do -- and you’re right, there was this sense -- I think because of what the economy was, it wasn’t just housing, as you recalled, it was a pretty bleak time, stock market and so on and so on.

But ironically, and this is the dirty little secret, it’s -- I’ll use myself, you know? Of course I eat healthy. Are you kidding? I don’t eat junk food. I don’t eat comfort food. But when we put healthy cooking and programming on the Food Network, ratings aren’t all that great. About that time, a show emerged from a guy who won Next Food Network Star, Guy Fieri. And this show, Diners, Drive-ins, and Dives, did nothing but tour around America and go to the great dives, the great diners. And guess what? That ain’t healthy food. But it’s great food. And that show, today, is an icon.

But in looking back and thinking back for this interview, I really -- sometimes you just don’t connect all the dots that’s right there in front of you. But I’d forgotten that, during that period, when comfort food was taking off, when people were looking for comfort -- and, by the way, high-end dining was starting to fall off, not just because of the economy, but -- people were looking to feed their soul, if I may. And “Gosh, this is a lot of bad news,” or “My bank account’s been hit,” or My home’s not worth” -- let’s go have some comfort food. And ironically, we still probably see some signs that healthy cooking and healthy eating has made more of an impact over the last few years. But at the end of the day, as far as what people want to watch -- it’s one thing to cook it, it’s one thing to eat it -- they want to watch fun stuff, fun food.

SETH ARENSTEIN: I’ll tell you what, you bring up triple-D -- Diners, Drive-ins, and Dives -- we talked -- today, we have this term called “binge watching.” Well, I think you all started it. Because on certain evenings, maybe, I think, on the weekends, Friday or Saturday nights, you can put on Food Network and watch hours and hours and hours of Guy Fieri. I have watched hours and hours and hours, and I wouldn’t say it’s an iconic show. I would say it’s an addiction, and you’ve addicted me, so...

KEN LOWE: Well, you’re kind. Ironically, when we first launched HGTV, back in 1994, there was no social media. You know, we got input by creating a 1-800 number and asking people to call us and tell us what they thought. But we also got faxes. We got letters. The one word -- and if we would launch in a market, let’s say we launched in Seattle, and nobody ever heard of HGTV -- the one word that was uniform at the time: “I’m addicted to this network.”

Now, I will tell you that it was part of the plan. If you go back to my old radio days, in radio, the real barometer, the real measure, was time spent listening. You wanted to get someone, and you wanted to keep them listening to their station as long as possible. And it was all predicated on, “You like this song? You’re going to like the next song.” So our research was not just to get you to tune in and hear one or two songs, but to at least keep you for a quarter hour, 30 minutes, whatever.

So I was building HGTV, the idea was to put in as few roadblocks as possible. And by that, I mean as few reasons to tune out and more reasons just to leave it there. So HGTV, and eventually Food became the same, was built to go from show to show to show. If you don’t particularly like the show, just wait a minute, because we’re about food. We’re about home. The next one, you probably like.

The other thing is when we made the decision from the get-go not to really, in my opinion, program to the lowest common denominator. And there was not going to be any violence. There was not going to be any sexual innuendo. There was going to be no profanity. It really was going to be a programming that you would welcome into your home. It was targeted to women, which, at the time, in the ’90s, mid-’90s, was a bit unusual. We only -- we already had, in the industry, Lifetime as a channel targeted to women. I think that’s why it resonated.

That addiction, it came mostly from women, in the early days. And over the years, men have picked up. But we now, among cable networks, have the longest time spent viewing. People still, to this day, will say, “I turn it on and leave it on. It’s a very comforting environment, both in home and both in food.” So I think some of that has played very well into our success.

SETH ARENSTEIN: Ken, let’s talk a little bit about international growth and what you’ve done in the past 11 years there, some of the properties that you’ve picked up, some of the channels and programming. I’d also like you to talk about business and doing business overseas and what you’ve learned.

KEN LOWE: Sure. Well, as we approached 2008, it did become obvious that we needed to spin out our cable networks into a separate division. In 2008, we spun Scripps Networks from the E.W. Scripps Company, leaving behind newspapers and television stations. It became a separately publicly traded company, SNI. We added the word “interactive.” Scripps Networks Interactive. We did that intentionally, obviously. But we did it because we really felt that the opportunities that cable was going to afford us -- through broadband, through enhancements in technology and our ability to hyper-target and to direct advertising -- we felt that was going to be a huge opportunity for us, our content, and our audience.

So we added “interactive” when we spun the networks. And at the time, we got a lot of questions. “Well, why is Scripps Networks interactive?” What we said was, “Look, we’ve been interactive since day one. We’ve got a call center,” and then social media picked up. I don’t think people, the investment community, completely understood at the time. We have anywhere from 20 to 25 thousand of our viewers, our users, our consumers, in any given month in a panel, they come in and out, called Under One Roof. And the idea is to be constantly in touch with our users. What are you seeing, what do you like, what do you don’t like, what are your trends? How much time are you spending in the kitchen? How much time are you spending on your home?

So that’s always been a barometer for us. I think it goes back to our roots, if you will, and that is let’s make sure the audience is a partner in the front seat with us as we go forward, and not just push stuff out. I think, in hindsight, even though we didn’t seem to get traction with interactive, that now, people are beginning to understand what it was all about. But I think it was an important point when we spun the networks out.

But it was important for two reasons. One, it gave shareholders an opportunity just to invest in cable networks. They didn’t have to buy a company that had newspapers, television stations, and cable networks. And, unfortunately, people were trying to shy away from newspaper stocks. They just didn’t want to buy into them. So, financially, if you were a shareholder and you got split shares, it was -- in hindsight, it worked out very well. For us, it also gave us an opportunity from a management to just focus clearly on the future of the cable networks and not have to be bogged down with, “What are we going to do with the newspapers?” etc.

So we went more into an aggressive M&A strategy. We acquired the Travel Channel. And we began to realize that a lot of the programming that we had syndicated internationally -- we’d mostly just sold our content, because we owned all of it. That was another decision from day one, and if you go back to the 2005 interview, that’s one of the things that I really emphasized, and that is you need to control your destiny. You need to own your content. As we sit here in 2016, I think that’s become pretty obvious. Because as we look at what the Netflix of the worlds are doing, and now Amazon, and Google, and etc., a lot of people are getting into content. So if you don’t own your content, you don’t own your destiny. So by owning our content, we’d already been syndicating it internationally. Then we decided, “Let’s become more aggressive. We don’t want to be just a domestic company.” So we started moving more offshore. We acquired Asian Food Channel. We became 50-50 partners with the BBC in UKTV. We really decided to move from syndicating programming to actually creating our own channels worldwide, either through partnership or ownership on our own. We acquired TVN in Poland, which is kind of the equivalent of the NBC or Fox of Poland. We’ve gone from, in 2005, let’s say one percent of our revenue that was coming from international, even 2008, it was maybe one or two percent. Today it’s almost 25 percent. So we’ve changed the profile of the company, intentionally.

But to your question, I think moving offshore -- successful as we are in the States, in many ways -- I was constantly reminding our people, “Let’s not become arrogant. Let’s not assume that we have all the answers in home and food. As a matter of fact, this is a great opportunity for us, because the old cliché is ‘food is the international language.’ Well, let’s make sure we’re not speaking just English and speaking American.”

So for us, it’s been a learning experience. As you go into these countries, you go into cultures. Asia’s a great example. When we decided to launch HGTV in Asia, we were very, very careful to make sure it was reflective of the Asian view of home. And the Asian view of home was much more family. You have families who live under one roof for generations. So it wasn’t so much about design and decorating and remodeling, because that’s not as robust in some of these other countries as it is here. As it was, in the case of Asia, about family.

In other countries, a little bit different. They liked a little bit more of the American programming. Not so much necessarily for, “Oh, that’s a great tip. I’m going to repaint my dining room.” In some cases, “These crazy Americans, look what they’re doing.” It was entertainment. At the same time, trends that we picked up internationally came back here. Tiny houses, which right now is huge. We can’t put a show on the air about tiny houses -- a lot of that was influenced by what we were seeing in smaller condominiums, smaller homes, around the world. So we were learning.

The same with food. I want to think, and I think it’s true, that we’re a much more diverse company as well, now. Because it has been an opportunity for us to learn, as we’ve moved internationally, that there are some different ways to do some different things. So we’ve imported some ideas, if I may use that term. We’ve imported talent. I think, as we talk about a global society, what we’re trying to do is learn as we grow.

Sometimes it’s painful. There are times when our culture gets in the way of, I think, our understanding and appreciation of other cultures. We see it playing out now in the geopolitical world. But the same is true about understanding just the differences in -- if I invite you into my home, it may not be reflective of your taste, etc. But coming into my home is an opportunity for us to get to know each other at a different level. And what we find, in the rest of the world, is it’s a different experience. It’s not just, “Come into my home for a party. Come into my home for -- come to my home for socialization.” The same is true with food.

Look, it’s a journey. We’re learning. It’s exciting. It’s given our company tremendous growth opportunities. But cultures, and understanding how to approach culture, and sometimes not even say words or do things, it could be offensive. And then what we’re experiencing right now, as we’re sitting down doing this interview, is somewhat the populist movement in other countries, as well. We have to be respectful of that, because we don’t want to be, quote-unquote, an “American” company that comes in and thinks we know what’s best for you. So we really have to focus on local talent, local content. I would say our success, on the international side, is very dependent on being reflective of those countries, those cultures, and those people.

SETH ARENSTEIN: Ken, very well said. And I just want to -- the first thing that comes to mind, though, of course, is how Scripps Networks Interactive took on a really big push -- and I think I heard you give a speech at an event where you said we need to do more work on diversity. It seems to me that -- or tell me about taking a diversity push here in the United States. I would assume that has helped you understand and be respectful of cultures overseas.

KEN LOWE: Yeah. I appreciate the question. It really goes back to, and -- I get the benefit and the great joy and certainly the adulation of being the chairman and the CEO. The truth of the matter is there was a founding group of folks who, back in the early ’90s, left great jobs, great organizations, to join me, because they believed in this dream of HGTV.

But what the founders of HGTV put in place that, I think, really has given us the chance to be as successful as we are today, was a set of core values. Okay? We hope we’re going to be successful. We hope we’re going to make money. But we’ve all been in different places. We were, at that point in our lives, late thirties, early forties, where we said, “Okay, if we’re going to invest time, or we’re going to be from away from our families, and we’re going to build this business, let’s at least make sure that it’s reflective of the kind of values that we all aspire to.”

So we created our core values in those days, and they’re with us today. You walk into any building in our organization, company, they’re on display. The employees are well aware of them. We all carry core value cards in our wallets and purses. But it’s not so much that, it’s just be able to hang it on the wall. It is to live the core values. By the way, set a very high standard for a company to achieve it.

So from day one, diversity was on that list. Now, I will tell you, as we sit here in 2016, I don’t think we’re as far along, even after 20-some years, as we should be. To your point, growing internationally has really allowed us, though, to understand that to be successful, it ain’t about just us. Right? And this is not just male and female and racial. It’s cultural. It’s transgender. It’s all. And it produces, sometimes, in my opinion, challenges for companies. But if we, as a company, are not willing to accept those, embrace those, and understand this is going to be the future of the world, then, I think, you’re not going to be able to grow and expand.

Not easy, and it’s not just the organization, but it’s what’s on screen. Because sometimes, trying to push diversity on-screen is a challenge, on one hand. On the other, I think we see it as an opportunity. We see it as a glass-half-full. Because as we, again, have started importing chefs and folks who may design and decorate, and architects from around the world, we’re seeing more of an openness. Okay, this is a little bit of a shining light on the hill, to share. We’re seeing more openness, I think, especially with millennials. That “I want to be more global. I want to think beyond our borders.” And so if you start thinking about trends over the next 10 years, just in our categories in our corner of the world, I think you will see more international programming coming back to our country, and more of an openness to international programming.

Now, the irony is, you take something like Downton Abbey, which was this programming phenomenon. And in many ways it highlighted, again, I think, some of the qualities of PBS and BBC, etc. But it’s not the undertaking that most content folks want to go after, right? It’s not -- it doesn’t scream loud, it doesn’t get a lot of attention, it’s not profanity. It’s reflective of society that most folks, even Brits, were surprised about.

But my point is, we’re starting to see more openness to thinking beyond just life in fast-food lanes and strip malls. What can we learn from great architecture of the world? What can we learn from great food of the world? And this is the first time I can remember looking at research and seeing what we’re seeing, internationally and domestic, we’re just really starting to open. I think, quite frankly, some of it’s the millennial generation. It’s the change in thinking.

So as frustrated as many of us get today about, “Oh my gosh, are we regressing?” or “What’s going on in our country?” or da-da-da. “What’s going on worldwide, this populist movement?” You know, it’s just -- this is a short blip in time. So I’m somewhat the optimist when it comes to becoming more of a global society, if you will.

SETH ARENSTEIN: You know, Ken, listening to what you were saying about international programming things, you recently, or in the last couple years, you were invited to the Vatican to talk about values and integrity. Tell us about that. Very few people get invited to the Vatican.

KEN LOWE: Well, because I have quite a few friends that love practical jokes, I assure you that I really researched to make sure this was the real Vatican. Because the last thing you want to do is, “Hey, I’m going to the Vatican, I’m going to meet the Pope.”

But no, in all sincerity, the Vatican, in the last few years, has made the decision to host seminars. And this particular year was on family values in media. It’s not just cable network programming. It’s social media, it’s all media. I think a valiant effort, and I was really impressed with the Panel. Eric Schmidt from Google, and on and on and on, some of the top folks from advertising around the world. From Martin Sorrell, and -- so I mean, the quality of the panel was really impressive. And when you go there, and you realize, it’s a little bit like the UN, so many people listening on headphones and speaking in different languages -- it’s the Vatican.

It was somewhat overwhelming on one hand, but it also really resonated with me about the opportunities to continue to talk about how media -- how social media in particular, but also video media and what we do -- impacts people, and the responsibility we have, as content creators, to think about that. Not just the P&L, but also what is it saying to society about us? What is it saying to the youth, not only of this nation, but around the world? So it was an incredible opportunity. I would love to see that happen on a larger scale.

And then we did get some private time with the Pope, which is very hard to describe. I’m not Catholic, but I was overwhelmed. Everyone in the room was. And he came in and spent time with us. This was in his private residence, came around the room and spent at least five, six, seven minutes with each of us. I have to say, it was -- I never thought about this in my life, but I’m standing there with this man, and this aura is emanating from him that you can’t really put into words. I’m not sure it’s something that I could articulate. But it flashed on me, can you imagine, over two thousand years ago, somebody come up and said, “By the way, this is Jesus Christ, the son of God?” “Oh, really? Looks like me.”

My point is, there was something in this man, in this human being, that was different from me. His life, the way he’d led it, his humbleness, his aura -- so you knew you were in the presence of somebody who had the same form and obviously was another human being, but was in a different place. And in this place that you actually want to be. And we -- David Zaslav, a good friend of mine, he and his wife were there as well. We were talking about this later at dinner. We really were all struggling to articulate it, but we knew we had been with an individual who had devoted his life to the good of humankind.

I have to say it had a rub-off effect. Because it did make you think, not just about your own life, but, “Okay, this stuff we’re putting onscreen, this content we’re putting on our websites and on our mobile devices, we’ve got a responsibility here. And where does that stop and start?” So not to get too far afield from the cable industry, but I do think it’s something that we as content creators, we as people who control pipelines and taking information and entertainment into people’s homes, there’s a responsibility that comes with it, and I think we have to be cognizant of that.

I have to say, I was rather surprised about how much a lot of the folks in the Vatican were aware of our family values content, and how -- and they were talking about Americans, more, I think, than they were internationally, how it influenced. For example, we have a high amount of co-viewing. Co-viewing meaning mothers watch with their daughters. Fathers watch with their sons. Family viewing, you know. You and I grew up with that term, family viewing. Because there weren’t that many things to watch, so kind of -- family gathered around the TV set. There weren’t multiple television sets.

We have a high percentage of co-viewing, because a lot of it is family-oriented. I get this a lot from mothers that say, “I’m teaching my daughter to cook with the Food Network, because she finds that entertaining. And what I do in the kitchen, we’ll just like chop together, and then we’ll created Chopped in the kitchen, and she said, ‘Next thing I know I’ve spent two hours with my daughter, and she doesn’t even know it.’” And when I was sitting with these guys, they go, “Well, we really admire the amount of co-viewing you have.” Yeah, really. It was surprising, the finger on the pulse they have. Social media as well, the good and bad. At the time we were there, there was a lot about between fake news and what’s coming out on the internet, etc., etc. They had a very good handle on a lot of that.

At the same time, they see a big challenge or opportunity for the Catholic Church, if you will, of using media in a more proactive and positive way. So anyway, it was a great learning experience. It also tells you that, as I said, at the risk of being redundant, it’s not just creating the stuff and putting it out there. At some point, you have to say, “We’re also responsible for what we create.”

And being a journalist, I know I’m preaching to the saved right now, but quality journalism, to me, is at an all-time high. It’s never been more valuable, and yet it’s been devalued in a way that, from an investment standpoint, it’s not a good place to quote-unquote “invest.” It is. I think what you’ll see is -- I think we’ll see a renaissance of quality journalism in the next 10 years as well. Or at least authentic and sourced journalism.

SETH ARENSTEIN: I hope you’re right. Talking about creations, one of the things that I know the Cable Center wanted me to ask you about are some of the people, some of the stars that you’ve created on Food Network. And let me get into it by saying this, or asking you this: If you had a bunch of Food Network personalities here with you, whose cooking would you want first? I know you’re going to insult somebody if you don’t put them on the list, but I remember asking Brooke Johnson this question a few years ago for her oral history, and she sidestepped it very delicately. But let’s try to put the hammer down here, Ken. Who would you want to eat with? No, she said Bobby Flay, she named a few, she said. But who --

KEN LOWE: Well, look, I think this is a great question, because people talk about the stars on HGTV and the stars on Food Network. If you go back to when HGTV was created, back to my radio roots, I said, “Look, we can’t be all Billy Joel. We can’t be all The Eagles. We have to have diversity, and we have to have the heft of one show to the next.” If you have just one or two stars or talents, what happens to the other 22 hours of the day?

We also realized, early on, that we couldn’t quote-unquote “create” stars. We couldn’t manufacture stars. The reason is because of this trust we wanted to build with the audience, the trust, the brand equity we wanted in HGTV and Food had to be interactive. It had to be two-way. You had to trust us that the people we’re putting on our air actually know what the heck they’re talking about and how to do it. And even before we acquired Food Network, I was watching, back in the mid-’90s, when they would put quote-unquote “a manufactured chef” on, or somebody that was great on camera, looked great, talked, didn’t know a thing about cooking.

So what we did was start to really be more reflective, if you will, of talented people who could become quote-unquote “stars” or become popular on Food Network and on HGTV. You know, fortunately, as we sit here today, 20-some years later, our networks, in my opinion, are the stars. You can say, “I’m the greatest home decorator. I’m the greatest home design. I’m the greatest chef in America.” You could be, by the way. Might not be on the Food Network. You might not be on HGTV. Because on those networks, what we have, and this is a little bit of our secret ingredient, are teachers. What we found, and we kind of stumbled on it, back in the ’90s, the talent, the people who work best for our brands are people who want to impart information. And many of them have teaching backgrounds. Many of them come from a place where information is not to be held, it’s to be imparted. And that’s actually had an impact on the people we hire in our company. When we come across people who’ve had any kind of teaching, coaching, in their background, they get an extra star on their resume. And the same is true for talent. So what we try to find now are every day, normal people doing great things who, by the way, once they look in that camera, it comes across that “I want to help you. I’m sincere in this.” They happen to be nice people.

It’s hard for me to ever single out talent, but one of the most popular shows right now on HGTV, for example, is Fixer Upper. Chip and Joanna Gaines, this couple in Waco, Texas, right, with four kids and they have literally created this business, Magnolia Homes, that’s off the charts. But at the end of the day, it’s about the sincerity and about two very nice people who are doing what they’ve done for 20 years, and that’s redecorate and redesign houses, because they want to make people’s lives better. And they’re a great family. And so when people watch the shows, I think there’s an impression that, oh, they’re watching to see decorating and design and home makeover. You know what they’re also watching? They’re watching relationships. They’re watching how Chip and Joanna react. And they’re watching how they react to their kids. And through that, it’s a lifestyle choice. In some cases, it’s primary to the secondary part of the decorating, designing, or the cooking.

If you take the Food Network, and again, it’s hard for me to single out individuals, but Bobby Flay and Giada and Guy and Alton and people who’ve been with us for a long time -- the reason they’ve been with us for a long time is because people love them. It’s not because each day, “Oh my gosh, Bobby Flay’s got this brand-new recipe, I can’t wait to tune in tomorrow.” You know what? “I can’t wait to visit with my friend Bobby Flay, my friend Giada.” There’s a relationship that viewers and consumers build with our talent that’s built on trust and that’s built on comfort and that’s built on this. “Hadn’t seen you in a while, but it’s so good to see you. By the way, you have any recipes to share with me?” Or a comfort meal, or whatever.

So interestingly enough, over the years, I’ve had a lot of people say, “We’ve actually tried your kind of programming on our network. Doesn’t work. And, by the way, we don’t quite understand it. Because we hired a great chef. We hired great decorator. And we did the show. It didn’t work.” And I never tell them, part of the reason it doesn’t work is that person is not -- they’re just not connecting.

And we’ve taken, over the years -- and I’m not going to mention any names -- some of the top chefs around the world. Bring them in, put them in a studio -- it just doesn’t work. The chemistry’s not there. So it’s not that we create stars. We just find some great people, put them in front of a camera, let them do their thing, give them some direction, you know. Give them some help. But at the end of the day, they’re the ones who really make themselves stars. And by the way, they can also undo it, as well.

SETH ARENSTEIN: It’s funny that you say that they can make themselves and unmake themselves. I was reading an article the other day about influencers. And there was an article about pets, a little corgi in San Francisco, that gets a thousand dollars an Instagram post, and this woman who manages pets to do your influencing. And she says, “By the way, they stay out of scandal much better than humans.”

KEN LOWE: Well, to your point, when we bring talent on, before their show ever airs, we put them through kind of social media. And the point being that even well-intended and coming from a good place, you can say something or put something on social media today that -- you almost want somebody to say, “You really want to hit the send button? Give us five seconds.” And if you’ve had a glass of wine, you don’t want to hit the send button.

So it -- because it’s so prevalent, and it’s so easy to use. And by the way, it’s a great tool. Because you can self-promote, you can talk about upcoming shows, you can talk about this, you can talk about that, but you have to be very careful. We’ve had some talent over the years that have misused it. They know that. So we try to minimize the areas of risk for quote-unquote “talent” as they come on the air. But, you know, these people are so popular and are such in-demand, it’s really hard not to occasionally say or do something that not everybody agrees with.

So that’s one of the challenges today, but I think, again, if you start from the point of -- we like to think that the people we put on our air, generally, are good family folks. And that’s just the core of who they are. Could not always be the case, because the world is made up of a lot of interesting individuals, and people want to watch interesting individuals. But it can’t be the focus of what we do.

What we do, day in and day out, is build shows around relationships. And the biggest and most important relationship is between our talent and the end user, whether it’s through the TV screen, whether it’s through a tweet, whether it’s through social media, short-form video, on Facebook, on Snapchat, all of these things combine into whether or not this person is a star.

And I will tell you, I’ve dealt with talent my entire career. Majority of our folks aren’t stars. They don’t conduct themselves that way. They’re businesspeople. And they want to succeed, and they’re smart about how they go about it. And to make shows that are informative, entertaining, and inspirational, there also has to be responsibility. And there has to be an understanding that, at the end of the day, it is a business, okay? And if it doesn’t work, then the show’s not going to get renewed, so how can I help make it work? How can I, when I’m not on-screen, enhance me and enhance my show?

And so I would say, over the years, we’ve had great fortune in working with good businesspeople who understand it is a business, but at the same time, there’s some responsibility that comes with it.

SETH ARENSTEIN: Yeah. That’s an interesting point that you make, I mean. On the one hand, there’s a business, but on the other hand, there’s some principles and integrity. Do those ever -- I’m sure they always bump heads. How do you deal with things like that? I mean, if you have a show or a personality who may be not quite agreeing, but gosh, he or she is going great, guns, ratings-wise, and tremendous following? How do you deal with that? And that’s really where the rubber meets the road, I would think.

KEN LOWE: It is, and believe me, it’s like life. It ain’t always easy, okay, and it’s not always black-and-white. There’s a lot of gray. I remember years ago, when I was becoming the CEO of E.W. Scripps, I was succeeding this wonderful gentleman, Bill Burleigh. He had spent his entire career with Scripps. He started out as a newspaper boy at 15, delivering newspapers, and rose to become chairman of the company. He was there 50 years. Wonderful man, you know, very smart, great journalist.

And I sat down with him, and I said, “Bill, I’ve never been a CEO. I’ve never run a company. Could you give me some advice?” He said, “Absolutely.” He said, “This is all the advice you’ll ever need. Just do the right thing.” And at the time, I thought, “Wow, this is so profound.” But when I got in the chair, it’s like, “Whoa, doing the right thing ain’t easy.”

My point being that we put together these core values, and they -- our mile markers, they were to guide us, our map. You can have core values, you can have a mission statement, you can have a lot of things. At the end of the day, what calls do you make on the balls and strikes? There are going to be gray areas, and there’s going to be some great human beings and some great talent and some great employees that do incorrect things. And, you know, usually I think there’s got to be forgiveness. One of our core values is compassion. People go through challenging times in their lives, and this happens with employees as much as it does quote-unquote “stars” and talent. There has to be an understanding of, okay, where is this person on their journey in life? Is this an aberration? Are they going to get back on track? Let’s give them a second chance, let’s help them.

I can tell you, I made a lot of mistakes with giving talent second, third chances. And sometimes, you know, it’s, “Wow, their show’s pretty good. The right thing would be to keep the show.” Inevitably, the right thing is when you know that particular individual is not going to get it back, you know, you’ve got to call it, you’ve got to say, “Let’s walk away, let’s go a different path.” Hardest decisions in the world for people running businesses. But over the long term, if you really adhere to your core values, if you really believe in what it is you’re doing, then you have to call it like you see it.

And those are really tough. You develop friendships with some of these folks. I’m still great friends with some of the people who are no longer on some of our networks. And having to sit down with them and say, “We’re not going to renew your show,” that’s not easy. But later on, after emotions cool, generally, they would go, “You know, you did the right thing. I got a big head, I was out of control. I no longer was focused on the show. I didn’t see it at the time, but it was the right thing to do.” But, again, not easy, and as long as I’m in the business, I’ll continue to struggle with it. And there is no easy answer here, but I do believe that if you at least don’t have a set of guidelines, pretty soon you wake up and you go, “How did that show get on the network?” And the answer is, “Well, we’re making a lot of money.”

SETH ARENSTEIN: A couple of personal things. I know you’re about to join the Cable Center Hall of Fame, so congratulations.

KEN LOWE: Well, thank you.

SETH ARENSTEIN: And I know you’ve talked about, or you’ve announced, that you’ll be retiring in a few years. What are you going to do when you’re not working seven days a week, I would guess?

KEN LOWE: Well, first, the Cable Hall of Fame. I have to say, over the years, I’ve been fortunate to receive a few awards and some recognition. But I would have to put this right up there, because I was not a quote-unquote “cable guy.” I started in radios and broadcast. And when I first got into cable, people would say, “Don’t mention to anybody you were a broadcaster.” This was during the retransmission consent negotiations. So I became a cable guy. But in my heart, I’m a content guy. And what it’s been so fortunate for me is to have an idea that I was able to put into the cable industry and watch it succeed.

So along the way, there’ve been all of these people in the industry who championed me. First and foremost, it’s been the group that came with me, the founders. But then the employees we’ve added over the years. And so it’s one thing to have an idea. It’s another thing to have people come around that idea and take it to a level far beyond anything you could ever even have imagined on your own.

So to get this recognition in the Cable Hall of Fame, I know people say this all the time, but it’s absolutely the truth. This isn’t about me. To me, this award is about HGTV and Food and Scripps Networks, and the fact that, you know what? We did gain the respect of the industry. We did start with a little idea about grass growing and paint drying, as The Wall Street Journal said. “Who’s going to watch this? Who’s going to watch people fixing food? Cooking food? Are you kidding me? How boring can that be?”

So those folks who believed in this concept, and they believed in family values and our core values. So this is a celebration for them. So when I get the award, it’s about that. It’s about the bigness of that. So for me, it doesn’t get any better than that. So I’m thrilled at the honor of going into the Cable Hall of Fame. As far as retirement, we have to use that word.

SETH ARENSTEIN: I know, I was going to say, it’s just a word.

KEN LOWE: It is, but -- look, I’ve had a lot of conversations. I’m at that point in my life where a lot of my friends have retired, they’re retiring, books are being written about it every day. There’s an expert being created every day who retired a year ago is now telling us all this is what you should, shouldn’t do. I’m a big believer in looking at folks who -- retirement is not a word. It’s more about your interest in life.

I remember, I can’t exactly tell you the source of the term -- restless self-renewal. My mother is 87, my dad’s 88. And they are interested in life. My mom has an iPhone. She texts me. As a matter of fact, we just had Thanksgiving dinner with her, and we’re sitting down for Thanksgiving dinner, and I was like, “Mom, will you -- have you got your phone?” “Oh, I was texting.” Just -- with my teenage daughter here, are you kidding? But what I learned from both of them is this zest for life. My dad reads five newspapers a day at 88. I sat down with him recently, and my wife, we were talking about something, and the name Kardashian came up. My mom said, “What’s a Kardashian?” My dad said, “Oh, it’s this family.” My mother said, “How do you know that?” He said, “Ah, I read it in the paper.” My point is, this isn’t just about quote-unquote “moving on from what it is I’m doing now.” It’s what other areas of interest do I have, and what can I do?

I love, absolutely love, Habitat for Humanity. And I’ve done some builds. I had the great pleasure of actually doing a build with President Carter in Americus, Georgia, years ago. And when you hand a person keys to their very first home that you’ve helped build, when you’re involved in things like No Kid Hungry. So there’s plenty of areas that I can channel my energy into.

And in some ways, it will be nice, quite honestly, not to be a CEO and not to constantly be worrying about a P&L and Wall Street. So it’s going to free me up to do some things I’ve looked forward to doing. But it’s not -- I don’t think any more society kind of views retirement as going off and doing nothing, sitting on the beach. Because how many times do we hear, “That works for the first six months.” But what I love, what I absolutely love, about great journalists, and I think you would agree with me, is that thirst for, “Okay, wait a minute, why? Okay, I understand your story, but why did this happen? How did this happen? Let’s get into some facts.” And if you think about life, it’s like, “Okay, yeah, we can go to Italy. Well, why don’t we go to Italy, we’re going to spend some time -- what are we going to do? What are we going to see? What’s there? And why” -- blah, blah, blah.

So I’m really looking forward to the next chapter, but what I’m really looking forward to is the folks who have built this company continuing to rise up. We have folks that have been with this company a long time. You know, it’s the good and bad news. Sometimes we don’t have turnover. Some people don’t take you up on an opportunity. But I’ve watched people grow from producer to show producer to line producer to da-da-da-da-da-da-da. So we’re so blessed to have this great bench of people. So the business will flourish in a time that’s only going to get more challenging and tougher.

But I used to play sports a little bit, and there was nothing harder than realizing you were no longer going to be on the team, you’re going to be phased out, you’re leaving high school, you’re going to college. Or, “I got to tell you, this quarterback, this kid’s up-and-coming.” It’s very hard to give it up, the competitive spirit. This is what I’ve done, what I love. Created HGTV, my gosh. How are you not going to be around your baby every day? Because those people are going to take it to a level that I’m not capable. So I’m really excited about actually stepping back and watching this team take it to a whole new level in a challenging time that, you know, I’m not as equipped to, in my opinion, go there as I was 20 years ago.

SETH ARENSTEIN: You know, I interviewed Jim Robbins from Cox, a number of years ago, while he was retired, and I said, “How’s retirement?” He said, “I’m busier now than I was when I was running Cox.” And then, of course, I had to ask him. I said, “But your golf game’s got to be improving?” He said, “No, it’s getting worse.” So just two bits of wisdom there.

KEN LOWE: You know, I’m -- gosh, Jim Robbins, what a great -- it’s funny you mention that, because Jim and I played golf shortly after he retired. And what a loss for our industry, and what a loss for the world. But he was having a really bad day, right, and Jim was a great golfer. And he said, “This is all Cox’s fault. I should still be working.” But no, I -- look, I’ve talked to enough folks, men and women, who say, “You know, more time on the golf course doesn’t necessarily equal lower scores.” So I think I’m prepared for that.

SETH ARENSTEIN: All right. So let’s slide into a legacy question, Ken. What’s your legacy going to be, and what would you like it to be? And what’s cable’s legacy?

KEN LOWE: I’m of the opinion that it’s great to have your name on plaques, and it’s great to have things written about what you did, what you created, what you were a part of. For me, the one thing I want to think about is, as I step away from SNI, is the impact that we can continue to make in people’s lives. And I don’t want to sound too speaking-from-the-mountaintop about this, but I do think we have an opportunity to continue to impact people’s lives in a positive way, by the three I’s -- ideas, information, inspiration.

It’s not a very lofty goal. We’re not doing great research, great medical breakthroughs. But if we can make people feel better, healthier, cooking, or just enjoying the family around the table, if they can feel better about their home, if they can feel better about walking through the door and saying, “Ah, this is my haven.” And by the way, I can’t wait to turn on HGTV or Food Network, because that’s part, now, of my environment. Because I welcome them in. And so nothing has to be said about me. It’s just knowing that something you were involved in, something that was a piece of you, is continuing to improve, to add improvement.

Now, again, there’s a lot of things that will impact people’s lives. But I was listening to a futurist recently talk about the fact that one of the things we’re going to be challenged with, society, is that we’re going to become more homebodies. I mean, when you can sit there and Amazon’s going to bring everything to your front door, and then you can sit in front of this TV and you can have your tweets and da-da-da. Why leave? Well, you got to go to Starbucks. Oh, wait a minute, they can deliver that to you now. So if anything the home is going to become even more important. And if you look at what Amazon’s doing, you look at any of these quote-unquote “voice activated” -- Google’s now into it, Amazon’s into it, “Start my sprinklers,” all the commercials -- so the question in my mind is, “Okay, what are the relationships?” How -- you’ve got all this technology. How do we sit at the table and talk to each other, talk to my son, talk to my daughter, talk to my husband, talk to my wife? For us to be able to still come into your home, come into your life, and give you opportunities to see how other relationships work, and the importance.

And this is why I think, globally, we can be a great conduit. How can we sit down with our friend across the table, who may be of a different religion, may be a different culture or color skin or whatever, and communicate? I don’t necessarily think that’s going to happen from shows on HGTV and Food. But I do think it’s an opportunity for us to use the business that we’ve created, to use the relationships that we’ve created with consumers, who trust us, say, “Well, let’s try this. What do you think about this? How about this conversation?”

So I’m very optimistic about where the next generation of leadership at Scripps is going to take our businesses, not just domestically, but globally. And this time of year, one of my favorite movies is “It’s a Wonderful Life.” And it’s just a constant reminder -- it’s interesting that it is still relevant -- that our lives are only as important as the friends we make and how we relate to other people. Legacies and accolades and awards and -- you could have a wall full of them. But what’s going to be the impact that you left, 20, 30, 40, 50 years from now, when nobody knows who Ken Lowe -- “I never heard of that guy. Oh, he was a part of that business? Oh, okay. He must’ve done some things.”

The one man who had a great influence on me, who I never really got to know that well, to be honest with you, but I used to go to his summer basketball camps when I was a kid, at the University of North Carolina, was a coach named Dean Smith. And I remember, there were about 40 or 50 of us kids, 12, 14 years old, whatever. We’d go to his college basketball camp, and we’d be in a room, and he would walk in, and he would go around the room, and he would know every one of us by name. Now, if you’re a 12-year-old kid and Dean Smith knows your name, whoa. That’s something else.

But over the course -- and he had an incredible memory, and all that’s been documented, etc. But he was one of the greatest coaches of all time, because he was a teacher at heart. And he taught. And he was with us 14 hours a day. He didn’t need to be with these 12-year-old kids, making a little bit of money as a basketball coach in an off-season, when coaches didn’t make much money in college. But I learned so much from him, just from a standpoint of his impact on us as kids. And his legacy, when you really look at it, and you read his books now, is not about being a great basketball coach. But it was the impact on the lives of the players he had and how that impact lasted. So, you know, you can say, “How many wins did he have?” Well, he had a lot of wins. But what was his impact?

So it’s a longwinded way of saying, it’s more about how can whatever I’ve been a part of and joined with a group of people continue to influence people’s lives in a positive way? And I think we have an opportunity. And by the way, I think that the industry has that opportunity. We have an enormous opportunity. I mean, my gosh, we come into people’s homes 24/7. How many businesses would absolutely die to say --?

SETH ARENSTEIN: Kill for that, yeah.

KEN LOWE: -- you know, “I’m just trying to be able to knock on the door and not be turned away.” So these opportunities, we’ll see. Do we squander? Do we absolutely look back and say, “Our legacy, as an industry, is we made a lot of positive impacts?” And, by the way, we have. The technology that the cable industry has created, it is the backbone now of so much of the technology that is influencing, not only our country, but the world. And with that comes a responsibility, but an enormous opportunity. So legacy, I think it’s the legacy of the industry and the legacy of these brands. And I look forward to someday saying, “I have no idea who Ken Lowe was, but if he was involved with that, must’ve been a pretty good guy.”

SETH ARENSTEIN: So, Ken, you’ve had this wonderful career. Are there people in the industry, or maybe also in your family, you talked a little bit about your mom and dad, and I can’t imagine that they weren’t big influences. I’m sure they are. And they’re still with you, so that’s great. But are there people in the industry that you want to mention to influenced you, who guided you, who helped you?

KEN LOWE: Yeah. People have influenced -- hey, I’m one of those fortunate people who still have both parents alive, you know, 88 and 87. I remember, I grew up on a tobacco farm in North Carolina, which I hated. And my dad loved, he loved farming. And yet he had a medical condition that, fortunately, made him exit farming. It just wasn’t conducive, it was hell as it was. It’s funny, my folks never smoked, but raising tobacco was not necessarily healthy either. But as a young kid I’d make a mistake, and my dad would sit me down and say, “Well, son, you’ve just bought yourself some more learning.” He said, “Because what you did,” and da-da-da-da-da. And they’ve both been my role models. Because they’re very humble people and still live in the home my dad was born in. And every time their son would do something pretty neat, get another job in radio, “Oh, I’m moving up in a television market,” or whatever, they’d say, “Oh, that’s nice. How are you treating your employees? How’s your life?” My touchstone. They would keep bringing me back to what was really important. So even when we were sitting down over Thanksgiving, they’re still Mom and Dad, and they still want to make sure their son is doing the right things. So I’ve tried to always be respectful of them, and what I’ve ever done, whether it’s programming or businesses or relationships with employees or talent, I’ll always -- I always really think about how my mom and dad would handle it, because it’s worked out pretty well for them.

In the industry, the gentleman that gave me my start at Scripps, Dick Jansen, back in 1980, has had an enormous influence on me. Because what he really did for me was he knew I was a content guy, he knew I was a creative guy. But he set me down early on and said, “Look, if you’re going to really be successful, you’ve got to understand business. You’ve got to understand sales, you’ve got to understand P&Ls. You can be the greatest creative content person in the world, but if you don’t understand the business, you’re never going to be who you want to be, in control of your destiny.”

I could never thank him enough for that. I just spoke to him yesterday, on the phone. He’s still an influence in my life. He retired many years ago. Another gentleman who I went to, to try to negotiate a package for my severance, because I was convinced he was going to fire me at Scripps when I mentioned this idea of wanting to start a cable network, because Scripps at the time was television and newspapers. Who’d want to invest in this crazy idea for a cable network called HGTV? The gentleman’s Frank Gardner, and he was one of those people who we should also all be so fortunate in life to meet, who went, “Oh my gosh, this is the greatest idea ever. I’m going to do everything I possibly can at this company to make this a success. And by the way, you should run it, I want you to build it, it’s your idea, and I’ll support you.”

I mean, how many times, in any business, do you not go to your boss and he says, “That’s a great idea, and of course you’ll be reporting to me, and let’s talk about the organizational structure. What’s in this for me?” Not once. As a matter of fact, just the opposite. I could never get him to take any credit. If you really want to write a real detailed story about the beginning of HGTV, you cannot leave this man out. But yet he doesn’t want to be included in anything. He lives on a horse farm in Kentucky, where he raises horses, and he’s the happiest guy in the world. But arguably one of the smartest people I’ve ever been around, a great journalist. He worked for CBS News for a number of years, managed some of their television stations. But he taught me so much, and the one thing we spent a lot of time on was, “Okay, HGTV has to function very much like a journalist would, and that is there’s editorial and advertorial. And there’s got to be a hard line between them.” And that’s why you never see product integration. You never see us really not separating editorial from advertorial. And we’ve created this incredible environment for our advertisers. It’s the highest engagement of any cable networks. People watch the commercials. Why? Because if you’re watching a bathroom modeling show, and a spot comes on for Kohler Sinks, you go, “Oh, that’s interesting. I may be interested in buying a sink.” So we create this environment, but we never blur the line. And that was all from Frank Gardner, in my opinion. He would constantly say, “Okay, they’re going to trust us, if we give them a reason to. But if we start going outside the lines, and we start integrating product, we start really, really losing our values here.” And I think that’s another reason for our success. That was Frank Gardner. I still speak to him. He’s a dear friend.

And my wife is a daily influence on me, because she’s not only a good barometer and keeps me grounded, but she also talks very much about where women are in 2016. And because we are fortunate enough to have some networks that overindex with women, they’re recognized as some of the top cable networks, top domestic brands, top content providers for women, that those shouldn’t be taken for granted. And it’s important that the mothers are watching with their daughters, but also what are we doing for the millennials? And that’s influenced a lot, I think, of what we do in mobile content and what we’re doing with Snapchat and what we’re doing with Facebook.

And that really is -- I’ll conclude with the fact that if you look at the future, for us, it’s always been about not thinking platform, but thinking opportunity. So where can we take our content that the consumer is going to be? We want to get there just a day ahead of them, so when they arrive at that, “Oh, HGTV is here. Food’s here.” By the way, may be in a different brand. It might be in a different name. We have the number-one video, food video, in all of media. Ahead of Facebook, ahead of Snapchat, you name it. It’s a 10-year-old, 60-second clip from our library. It’s about a pizza made in a bowl. It’s 60 seconds, and it’s resonating with millennials like crazy. And what that should tell you is technology is fantastic, right? It’s still going to be about great storytelling and great writers and great editors. So for us, very excited about the future. Very excited about the future of the cable industry. Because what this industry has built, both on distribution and content, is going to influence, not just our country, but the world, for a long time. So a lot of exciting things going.

SETH ARENSTEIN: Great. Ken, thanks.

KEN LOWE: Yeah. Great.

SETH ARENSTEIN: It’s been fabulous.

END OF INTERVIEW

 

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Ken Klaer

Ken Klaer 2019

Interview Date: Monday, February 4, 2019
Interview Location: The Cable Center, Denver, CO 80210, USA
Interviewer: Stewart Schley
Collection: Cable Center Oral History Project

STEWART SCHLEY: Greetings, thanks for tuning in to the Cable Center’s Hauser Oral History series. A former boss of mine, a mentor who is featured in this series, Paul Kagan, gave me a good piece of advice decades ago, and he said, “If you want to understand the modern evolution of the cable industry, follow the set-top box.” And it was advice that served me well. We have a chance today to do just that, in a big way, with Ken Klaer, who is a Senior Vice President for Comcast Technology Solutions, and really lives out a roadmap of set-top box evolution, and thus can talk a lot about where this industry has been, and I think where it’s going, too.
KEN KLAER: Happy to.
SCHLEY: Thanks for joining us.
KLAER: Thanks for having me.
SCHLEY: Appreciate it. Let’s start with a question that’s not on your CV, where did you grow up as a kid?
KLAER: Yes, I grew up on the East Coast. I was born -- my parents live in Philadelphia, ironically, then New Jersey, then from New Jersey we moved to Boston, Boston to Pittsburgh, Pittsburgh to Atlanta. I finished high school and college in Atlanta.
SCHLEY: Were you a “take-apart-the-radio” kid, were you into electronics and stuff?
KLAER: So, I had a cousin who was constantly throwing in my face -- because he did all that kind of stuff -- and so no, I didn’t.
SCHLEY: Okay, but you found yourself -- I think your academic background is in industrial engineering?
KLAER: I was an industrial engineer from Georgia Tech.
SCHLEY: And then, how did you find your way, Ken, into the cable business? What happened?
KLAER: So, I started out college as a chemical engineer, and then halfway through, I had an epiphany walking across campus. I was taking my second quarter organic, thermal, and p-chem all at the same time, and I said, “You’re going to do this the rest of your life? You hate it.” So, I switched to industrial engineering and it was one of the best decisions I ever made, because it was so much different and it just fit my personality. But while I was at Georgia Tech, I was a co-op, and when I switched from chemical to industrial, I had to switch jobs. So, I previously worked in a copper refinery, and fortunately I ended up going to work for Scientific Atlanta, as a co-op, in 1979.
SCHLEY: Which, as the name attests, was indeed based in Atlanta? Is that correct?
KLAER: That’s correct.
SCHLEY: What did you know about SA -- as we’ll call them -- before that? Anything?
KLAER: Very little. I know they hired co-ops, I knew they were in cable. Scientific Atlanta had a reputation as a growth company, but also had a reputation of riding its people pretty hard, because it was growing so fast.
SCHLEY: When was this?
KLAER: 1979.
SCHLEY: Okay. So, what was your job? What was your introduction?
KLAER: So, I had probably one of the best co-op experiences in my life -- that anybody could have in their life. Originally, I did an implementation of an MRP system -- so how do you plan factories?
SCHLEY: Oh, okay.
KLAER: Yeah, so that was pretty cool. We work with -- what’s now Accenture -- but Arthur Andersen in those days. One of my rotations we expanded into a new building and I laid out the new building, and was responsible for the move-in of the new building. And then -- they actually asked me to string a couple quarters together -- which was atypical, as they were getting into the set-top box business, to work on that. So, I got exposed to it while I was still in college.
SCHLEY: What was the state of the art in cable -- we used to call the converters.
KLAER: That’s right.
SCHLEY: What was going on in the market at that time?
KLAER: So, in the late-’70s, the set-top devices were mechanically tuned devices. So, they were -- you know, we had some devices that we procured from [Arata?], there was the Hamlin box that slid, the GI that had these little sliders on it -- not very secure, not very complicated. But they were all mechanically tuned, as opposed to electronically programmable, which we all take for granted today.
SCHLEY: Did they -- they literally sat on top of the television set, was that the idea?
KLAER: They sat on top and a lot of them had wired remotes -- if you remember the days when you had a wire across your living room.
SCHLEY: Yeah, be careful of not tripping on the wire.
KLAER: I used to joke with my kids -- who don’t understand this -- when I was a kid, I was the remote. My dad would say, “Go change the channels.”
SCHLEY: Yeah, been there.
KLAER: You can relate.
SCHLEY: What was wrong with the mechanical approach to tuning?
KLAER: It was limited in what it could do with respect to security. I mean, the defeats were fairly straightforward and easy. And it was also limited, in those days, with respect to how many channels you could put through the devices.
SCHLEY: Which was how many?
KLAER: In those days, it was 36 channels.
SCHLEY: And a converter, that word came from what? What was going on in the box?
KLAER: So, inside the box you would take a broadband signal in -- in those days 300, 330 megahertz -- and then you would have a tuner that would go select a particular carrier, and then it would up-convert to some intermediate frequency, before it down-converted to the output that your TV could take.
SCHLEY: Because television sets were never intended to tune in these frequencies.
KLAER: No, in those days it was all Channel 3 or Channel 4.
SCHLEY: Yeah, I remember flipping the dial. How did people -- what were the mechanisms that pirates would use to get through a converter?
KLAER: (laughs) So, I’ll bring forward -- when I got involved with the set-top box, it was, we called it the 6700 -- which I’m pleased to see that you have a few of them downstairs here.
SCHLEY: At the Cable Center?
KLAER: Yep, and it was -- in those days -- it was state of the art electronically -- design, anyhow. It was 54 channels, if I remember right -- yeah it was a big deal to go to 400 -- or whatever it was -- megahertz -- 450. And it was electronically --
SCHLEY: Managed -- as opposed to mechanical.
KLAER: As opposed to mechanical. The way you would defeat that, at one point in time -- you know, the kids will test anything and try anything -- and so, we had a keypad, you know, just 16-digit keypad, and we found out if you push four buttons at the exact same time it defeated all the security in it. So, that had --
SCHLEY: That seems random.
KLAER: Well, that’s what you find out. You find out these random things. So, we were transitioning from mechanical to electrical, and we call those programmable, because it had an EPROM in it.
SCHLEY: Okay, what’s an EPROM?
KLAER: Erasable Programmable Read-Only Memory. So, in this EPROM, you could put configurations that that device was allowed to decrypt. So, if you were not authorized for HBO, the EPROM would not have that in it. And so, nowadays we do it all addressably through a control system. In those days, it was a piece -- a little IC that you plugged into the set-top box, and it controlled what the box was allowed to see.
SCHLEY: I’m glad you made the allusion to HBO, because that mattered at that time.
KLAER: Oh, very much so.
SCHLEY: If you couldn’t secure those, I don’t know, five, six, seven dollar-a-month channels, there went the revenue.
KLAER: It was all about security, yeah.
SCHLEY: Did you have a sense that the cable industry was on the verge of something kind of big at the time?
KLAER: The truth was, I was a kid out of college, and I wouldn’t think that I’m all that -- I felt very lucky to be part of an industry that was growing.
SCHLEY: Because things were happening.
KLAER: Things were happening. It was growing. Keep in mind, in those days, there was no broadband. It was just a video business.
SCHLEY: Oh, absolutely. One-way video.
KLAER: It was the satellite earth station, you know, and getting into the converter business.
SCHLEY: Did you run across Sid Topol, I think the co-founder of Scientific Atlanta?
KLAER: So -- no, he wasn’t a co-founder.
SCHLEY: I’m sorry.
KLAER: Glen Robinson was the founder. Sid was brought in, just before I got there -- so, he got in there in the ’70s.
SCHLEY: He was the CEO, though, right? The President?
KLAER: He was the CEO -- he came from Raytheon. And I know Sid quite well.
SCHLEY: What’s he like? What was he like?
KLAER: So, (laughs) Sid was a very smart technologist, deep down inside he had sales in his genes. He had some traits that were quite characteristic. He would, if he heard a phone ring, he would stop and pick it up, because it might be a customer.
SCHLEY: Really?
KLAER: He encouraged us to always answer our own phone. He had the same -- it was fun, when I was young, because he would come by and you’d be so excited to see the CEO. And he would ask the same three questions: “What’s your name? What do you do? And how do you help the company make money?”
SCHLEY: (laughs) Really?
KLAER: He had the same three questions all the time, and he’s quite a character. But he -- I give him a lot of credit for the success of SA.
SCHLEY: Yeah, legendary figure, right?
KLAER: Totally.
SCHLEY: Not just on the set-top side, but the distribution side.
KLAER: Yes. So Ken’s version of history there. The world was going to go from analog to digital, and it was going to start with a satellite before it got to the converters, right? And so, Sid bought a company in Toronto -- I think it’s called Digital Video Systems, or something like that -- and it had something called BMAC, that was going to be the satellite encryption and security technique that was going to compete with what Digicipher was doing with --
SCHLEY: So, you’re setting up the signal in an encrypted fashion. Up and down.
KLAER: Correct. But Sid had a strategy that said, “look I can do a better technology than what our competitors were doing,” and he bought a company to do that. And he thought had assurances from certain content owners -- and then there was a very famous taxi ride, where somebody very senior in the industry told Sid it wasn’t going to happen.
SCHLEY: Oh no.
KLAER: And so, Sid actually -- he bet big on that -- and we ended up -- turning out to be some viable business for the company out of it, but it wasn’t quite the --
SCHLEY: That’s a tough taxi ride.
KLAER: The industry almost had two satellite encryption techniques.
SCHLEY: Ultimately, everybody rallied around the other --
KLAER: Well, VideoCipher to start, and that morphed into DigiCipher from GI. GI Motorola.
SCHLEY: But you guys, Sid and everybody there, you bet the company. Well, maybe you didn’t bet the company, but you made a big commitment to set-top technology, right?
KLAER: That’s correct.
SCHLEY: How -- why?
KLAER: So, I graduated in March of ’81 and they hired me into work on the production area for the 6700 set-top. The theory was at the time, we were building call it 1000-ish receivers and modulators and processors. We said, “Oh, we can build 1000 a day of set-tops and devices.” So, the company had, what I would characterize in hindsight, maybe a little bit of hubris of what we could do. And frankly it damn near sunk the company. It sunk the company in a very negative way. With that said, the senior leadership team -- which, it wasn’t just Sid, it was people like Jack Kelly, Jay Levergood, Jim Hart, Larry Bradner. What they did was they recognized that this was not a winning strategy, and they collectively went to Japan, and they built a relationship with Matsushita. And that’s when the world transitioned from programmable to addressable. Addressable meaning you can send a transaction back to the box, and change the state, without changing the device in the box.
SCHLEY: In the comfort of your headend or wherever you might be.
KLAER: Wherever your control system is. And so, what was interesting was the state of the art, in terms of reliability for these converters, was double-digit failure rates, generically. Which today, we would all laugh at and turn our nose up at. When we went to Matsushita, we took it well down below single-digits. We had lots that we learned from all that. We worked with the Japanese company, we transitioned from programmable to addressable, and that went from a problem for the company to being a huge success for the company.
SCHLEY: What was the challenge of not having double-digits -- why were they hard to make, these things?
KLAER: Well, going back on the history, the kinds of problems that we had. When we built the 6700, the very first one, we had all kinds of ingress and egress inside the box. Remember I talked about how we up-converted and then down-converted? Well, if the signal is going from one area into the other, it could distort or cause a problem with how it performs.
SCHLEY: In the box?
KLAER: In the box itself. When we later -- you know, the cable industry -- it can be a tough environment, right? And so, there were things like surges coming in on the RF network that would blow up the front-end of the devices, and we had to put more protection on the devices. And getting good grounding in the cable network plant is an art that people in this Center probably know more about than I do, but if it’s not done well, it can have an impact on the devices.
SCHLEY: You have to deal with this as a manufacturer.
KLAER: Right. And so, over the decades we’ve learned how to design it and get better at it, but that’s why you had high failure rates, for things like that.
SCHLEY: So, addressability came into vogue. About what timeframe is that?
KLAER: This would have been the early-’80s.
SCHLEY: What did addressability change about the way cable worked?
KLAER: Oh, it was huge. I mean, if you had a device in your home that you wanted to change its authentication, as to what it’s allowed to receive, in the old days you had to roll a truck, or figure out how to bring the box, and swap the box. With addressability, we’re able to just send a transaction to the box. It was huge. It was huge to eliminate calls and truck rolls.
SCHLEY: And, from what you knew, how did cable companies get those boxes in the home and what was the inducement for the customer. Did you sort of force-feed an addressable box into a customer’s home, say “this is what you got to use”?
KLAER: Well, so in the case of Scientific Atlanta, we had a lot of customers that had this 6700 that were not happy with us.
SCHLEY: A lot of cable industry customers?
KLAER: A lot of cable industry customers, in North America primarily, U.S. -- well, some in Canada, I guess. But the main thing that we did, is we gave them a trade-in policy. So, they were not happy with us, we were not happy with the product, and we wanted to make it better. And so, when we came out with this next generation leapfrog of addressability it was an easy sell. If you go to an operator and say, “Look, let me talk about how I take cost out of your system,” it will resonate. So, we gave them trade-in credit towards what they had purchased that they weren’t happy with, and that got us started with addressability. And then, we had such a great box, and our reliability was probably an order of magnitude better than the industry standard at the time. So, not only did we come out with a better, broader-scoped, if you will, featured product, we came out with a more reliable product at the same time.
SCHLEY: You sort of set the standard. I always wondered about this, because you can tell me from a technology development standpoint. It seems like multiple companies, who are competitors in the market, get to a similar place around a similar time. Is it just because the body of knowledge sort of disperses throughout an industry? How does that happen? Because, you were first, but...
KLAER: There’s a couple ways to answer that. Let’s talk about the transition from analog to digital. When we first launched our Explorer 2000 --
SCHLEY: Oh, I remember that.
KLAER: Yeah, yeah. It had four meg of flash and eight meg of D-RAM, because that’s what you could afford to put in a box.
SCHLEY: That’s not a very hardy...
KLAER: No, no, today you laugh at that. So, a lot of it has to do with the state of the art of the processors -- we at Scientific Atlanta had a joint venture, call it relationship, with ST. And we developed our own video silicon together with them. And parallel to that, then you had BroadCom doing what they were doing at the time. So, those were the two, primarily, basic development --
SCHLEY: Chip companies.
KLAER: -- chip companies. It was more tied to the state of the art as it evolved.
SCHLEY: So, you’re dependent on what’s kind of the broader ecosystem, to some extent.
KLAER: We have a lot of -- even at Comcast today, we have a lot of people that stay very close to the state of the art of what’s going on.
SCHLEY: And then, one element worth noting, because I think we take it for granted, is, what was going on with what we call the EPG, or the on-screen guide, in that evolutionary era?
KLAER: So, EPG actually came out in the analog days. Originally, it was -- we had a joint venture -- not a joint venture, but a license arrangement with Starsight, if you remember those guys.
SCHLEY: Starsight, yes.
KLAER: Starsight got acquired by Gemstar -- I believe is now part of TiVo, Rovi, whatever. It’s all morphed. But that came out in the analog days. And it was -- in the old days of cable, you had to go to your newspaper to figure out the channel guide and --
SCHLEY: What was on TV.
KLAER: -- what was on TV. And then, the EPG basically put it into the device itself.
SCHLEY: Did the EPG live in the box, or was it broadcast to the box?
KLAER: So, depending on what time of the evolution of set-top you’re talking about, but for most of the history, it resided in the box. Now, you could download it -- and of course downloading had challenges, and risks, and issues, because not everything always got properly seated like they were in the boxes. Everything resided in the box. Now, today, if you look at our X1 products, in the digital world today, the guide sits up on the cloud.
SCHLEY: That’s a big breakthrough for that -- the way you display information. Your journey took you to a company called ANTEC after Scientific Atlanta. What was ANTEC and what was attractive about that?
KLAER: So, I left Scientific Atlanta in July of ’92. I joined ANTEC roughly a year later. I did a startup in the middle of it, but it didn’t really work out so much for me. ANTEC at the time, literally the day I joined it, they had just done their IPO. ANTEC was a spin-off from Anixter -- remember Anixter-Pruzan, which was largely a distributor. This was a guy named John Egan, who was in the cable industry --
SCHLEY: Former football player, is this right?
KLAER: Miami Dolphins’ center. He broke his back the year before they went to the Super Bowl.
SCHLEY: Oh my gosh.
KLAER: Yeah, yeah, but he’s quite an interesting, dynamic character. Anyhow, so ANTEC was largely a distributer -- and a very good one, frankly, and I joined them -- with some friends of mine, if you know the names Steve Necessary, and Jack Bryant, and some of those guys. And I joined the day ANTEC had their IPO, so we were flush with cash, and I was given the assignment to figure out how to spend some money, which was kind of fun. So, I helped spearhead the acquisition of a company called ESP -- ESP was three principals -- a guy named John Lapington, Jim Farmer, and Tom Engdahl -- and they had a relationship with this company called Nortel. I’ll give you the shorter version of the story, but basically, we were able to take that relationship with Nortel and create a joint venture between ANTEC and Nortel, that is now called ARRIS. So, that’s how ARRIS was formed.
SCHLEY: What did you work on, early on, with the ESP/Nortel coalition?
KLAER: I had a number of different jobs with them. I ran the fiber optics business for a period of time --
SCHLEY: This was early fiber era?
KLAER: It pretty much had just come out, yeah, early days. So, this would have been -- I’ll have to think about this -- would have been ’94, ’95-ish.
SCHLEY: That’s what I got.
KLAER: And then, they had purchased a company -- that I had nothing to do with -- in Opelika, Alabama -- called Power Guard. And so, they asked me to go down there and run it and make some changes to it. There’s a lot of stories on that one, too, but I won’t go into that one.
SCHLEY: Okay, fair enough.
KLAER: And then, I went back to Scientific Atlanta. Steve Necessary went back and he pulled me back.
SCHLEY: In terms of your professional pedigree, how would you describe what you were learning, in terms of management style? Obviously you had the confidence and resolve to make a big acquisition, and to be strategic. But also, I think, to attend to the day-to-day management stuff.
KLAER: I was very fortunate -- and still am very fortunate, frankly, to be surrounded with leaders that are phenomenal at what they do. So, at Scientific Atlanta, the names we rattled off earlier, they’re class acts. They’re all brilliant. And so, one of the things you learn from Sid, is you need a plan, but then you need to execute. So, I’ve seen a lot of crappy strategies turn out to be pretty good through good execution, and I’ve seen the opposite as well. I mean, you might have had a good strategy, but it failed because you didn’t execute.
SCHLEY: Somewhere there’s a sports analogy here, but yeah, I hear you.
KLAER: So, you know, a lot of it is knowing how to focus on both. I love the current -- you know, the current buzzword today is agile. And I think Scientific Atlanta was a very agile company. We didn’t know it at the time --
SCHLEY: Early on.
KLAER: -- but, yeah, you have to be. You have to know how to adapt and adjust and I think we always had a very strong bias of listening to our customers.
SCHLEY: Okay, so that’s --
KLAER: Which has always helped me through my careers. Listen to your customers, deliver what you represent, and execution and excellence always pays off.
SCHLEY: What made a good leader -- or what makes a good leader within that kind of context? I mean, what are the traits?
KLAER: So, in my case, I like to describe my job as that of being a catalyst. And what happens with a catalyst is -- you are an agent that is part of a reaction that really doesn’t make the reaction happen, but helps facilitate getting it done. And so, I’ve always had a philosophy of hiring people better than me, hiring people smarter than me, that know their stuff. Well, it’s always pay off. Having guys pushing you up and out of the way is actually not all bad. And so, I’m very, very proud and pleased of the org I have today, because every one of them is an expert in what they do.
SCHLEY: So, identifying and cultivating human skills is part and parcel with technology development, I’m assuming.
KLAER: One hundred percent.
SCHLEY: What was going on internationally with the cable industry around this time?
KLAER: That’s a good point. So, Scientific Atlanta launched digital, and in those days, I was responsible for marketing and business development, and it was a blast. We had the best digital offering -- you know, my oversimplification. If you were, in those days, TCI, and you were losing to satellite, you went to GI and said, “I’ve got to quickly neutralize what satellite’s doing. I need to match them.” Our biggest customer in those days was Time Warner, and Time Warner in those days had a lot of networks that had relatively a lot of bandwidth. So, they had a lot of channels, which originally some of the old TCI properties did not. So, they needed to go to digital, so they could have more channels, so they could counter --
SCHLEY: Because that was the satellite argument -- lots of stuff.
KLAER: Lots of stuff. Time Warner in those days, in my view, had analog still, but a relatively robust infrastructure, and they said, “If I’m going to compete with satellite, I want to compete with their weakness” -- which is a return path -- “so we can have interactive games and things.” So, Scientific Atlanta was a year behind GI launching. When we launched, we had an infrastructure that allowed for interactivity from the very, very start. And we created a program, it was called Creative Edge, that had an applications development community.
SCHLEY: It’s like an early version of the App Store, right?
KLAER: That’s right. We didn’t know, we were ahead of our time. Lots of good stories about -- in fact, I remember -- it’s kind of silly now, but our beta site, of all places, was in Hawaii, with Time Warner.
SCHLEY: Time Warner Oceanic.
KLAER: Time Warner Oceanic, yeah. And one of the applications that they had was pizza on demand.
SCHLEY: Boy, so there really was a pizza on demand!
KLAER: There was a pizza on demand.
SCHLEY: That’s the cliché of interactive television. Pizza.
KLAER: Pizza on demand was first. Now, if you looked at how it worked, it was a lot of behind the scenes stuff, but it was the concept.
SCHLEY: But from the consumer’s standpoint, you could order a pizza on a cable system.
KLAER: In Hawaii, yeah. And then, of course, the big thing became video on demand, and so -- now you asked about international, so I got detoured.
SCHLEY: That’s okay, we’ll go back to video on demand and transactions, but I do want to hear about international market.
KLAER: So, what happened was, we launched, we were very successful, we won more than our fair share. We went from basically zero digital footprint, to -- I guess by the time the company was sold -- about 50/50 with GI. So, it was great considering we were behind them. Then they came to me and said, “We want you to do international.” And I said, “Great.” It sounded like fun, and I like travel. So, you’ll love this -- I went over to Europe and said, “Look, what we have is a great end-to-end system. With this conditional access called Power Key that nobody’s hacked, and has all this reliability built into it.” And they said, “Well, does it do DVB?” And I said, “Well, what’s DVB?” That’s where we started.
SCHLEY: Trouble.
KLAER: That’s where we started.
SCHLEY: What is DVB?
KLAER: Digital Video Broadcast. It’s the international standard for television. And so -- now, I’m a little tongue-in-cheek, but what I really learned is, internationally, what the customers were saying is, “Look, we are not going to follow the U.S. model. We’re not going to have evil duopoly lock us in to the end-to-end solution. We are going to be the integrators and we’re going to pick best-of-breed components.” And so, that forced us to come up with an alternative strategy. And so, what we did, was we said, “Look, what we have are brilliant people that know digital end-to-end.” What we said is, “We are going to be the world’s finest integrator of third-party components.”
SCHLEY: That’s a big change.
KLAER: Huge change for Scientific Atlanta, but we built the business from nothing to -- I don’t know the total number, but probably over time in the billions. I don’t know, I have to come back with the right number, but --
SCHLEY: Big business.
KLAER: -- big number. It went from nothing to decent-sized. And so, what we had to do was -- if you looked at the landscape in Europe, there were so many flavors of conditional access -- NDS, NAGRA, Irdeto -- lot of those flavors. Then there were multiple flavors of middle-ware that was doing a lot of the transactioning and processing in the box. And then, you have applications sitting on top of it. And then, of course, the metal and the hardware that all this stuff ran on, which was what I wanted -- I wanted to sell the metal. And so, what we ended up doing, is we -- brilliant guy named Diego Gastaldi did his mapping of the world, and at that particular time, we felt like the cable -- the companies with the most momentum were two you may have heard of: Open TV for middle-ware, and then NAGRA for conditional access. And so, we intentionally started a courtship with them, and then what we ended up doing was becoming very good at integrating Open TV and NAGRA with somebody else’s applications on top. Well then, NAGRA bought Open TV, and that kind of made it interesting.
SCHLEY: Sealed the deal. But that was important to those guys, because you were almost an intermediary between them and the cable industry.
KLAER: So, what happened was, the CTOs all liked the concept of being the integrator, but they didn’t know how hard it is. And I will tell you, in my view, just about every CTO, internationally, that did the “I’m best-of-breed and put it all together” lost their jobs, because they ended bringing in Accenture and spending a lot of money for integration.
SCHLEY: It does sound complicated --
KLAER: Very complicated. So, what we did is, we came in and said, “Look, I will eat some of that cost, so you don’t have to hire an Accenture, as long as you commit to buying boxes.” And that was --
SCHLEY: I did not know that.
KLAER: That’s the recipe of how we got into this, and believe me, there’s lots of -- we ended up integrating Liberate, ending up finding its way over into Telewest at the time. We integrated with lots of third parties.
SCHLEY: Ken, why was it that Europe was in a different sort of state of mind to begin with? As opposed to the U.S. model.
KLAER: I think it was primarily -- they looked at the U.S. and said, “Oh, you guys got trapped into the evil duopoly. We’re not going to let that happen.”
SCHLEY: Because cable -- it was later to Europe, right, generally? Sophisticated cable.
KLAER: Yeah, that’s right, that’s correct.
SCHLEY: So, you ran -- or you had a big role in running international for a couple of years with SA?
KLAER: I’d say ten years, plus or minus.
SCHLEY: Can I ask you to -- for the benefit of our audience, when we talked about the digital transformation, we talked about Scientific Atlanta being maybe a year behind your arch-rival, GI. What was the digital transformation? What was going on architecturally or technologically that we call that era the “digital era”? How were signals getting to the home?
KLAER: You mean from a competitive point of view?
SCHLEY: No, I mean, just describe -- we used to send signals in analog electronic language, and then suddenly we started doing it digitally. Why? Like, what was the impetus?
KLAER: So, the beauty of digital is that you can compress and get more channels into that same amount of spectrum. So, in the analog days, in the U.S., you would get six megahertz channels -- so one channel took six megahertz of spectrum. In the international, with the DVB world, it is eight megahertz. And so now, with MPEG2 you can compress it and get, whatever it was -- three or four channels -- and with MPEG4 you can get even more.
SCHLEY: So, you’re literally tripling the capacity.
KLAER: And with HEVC, even more so again. And not only that, while you’re tripling capacity, you are also bringing about better technology, because when we started there was no such thing as HD. I remember we first did digital --
SCHLEY: Good point. How soon we forget, right.
KLAER: That’s a funny story, too. I remember sitting down the street from here, with Jim Chiddix and Mike Hayashi in the Time Warner Building, and HBO wanted to be the first with HD, and our digital set-tops, at the time, did not have HD -- the silicon wasn’t ready. And so, I can remember Jim -- who I have great respect for -- he said, “Look, just do a daughter board. It doesn’t have to be pretty -- in fact, you can codename it Ugly One. If you want to, we have to do a second generation, it can be Ugly Two. We just have to be there fast.”
SCHLEY: It would literally attach, or be part of the next generation of the box?
KLAER: Think of it as a daughter-card that sat inside of an Explorer 2000. And it was damned expensive, and it was brute-forced, and then -- lots of funny stories about how they then --. Because we had done that, then they wanted us to work with the silicon guys -- in our case ST -- to integrate it into the chip, which obviously made a ton of sense. Of course, then, HD happened.
SCHLEY: Did HBO get out there with those HD signals?
KLAER: Oh yeah, they were first. Yep.
SCHLEY: I want to talk about -- you mentioned Oceanic pizza -- again, and go to this. So, digital not only expanded the carrying capacity of the cable system, but it let you do -- coupled with the return path -- interesting things, such as pizza on demand, video on demand.
KLAER: The video on demand was the big one. In those days, it was C-Change, Concurrent, Ncube, a couple others.
SCHLEY: They made the servers, right? That would spit out on demand signals?
KLAER: Correct and the commercial relationships, and a lot of pieces of it. But that was state of the art at the time. Getting video on demand to work. I would tell you that the applications domain in the digital world, really didn’t develop as much as we had hoped or would have liked -- other than the VOD. And of course, video on demand, there’s different variants of video on demand -- there’s subscription on demand --
SCHLEY: Pay-per-view.
KLAER: Pay-per-view is another that came out, yeah all that.
SCHLEY: Why do you think that didn’t happen? Didn’t gestate in the way that people had hoped at the time? Was it the Internet coming along at the same time?
KLAER: The Internet wasn’t there when we started, you realize.
SCHLEY: Oh, duh, right?
KLAER: So, when we built our Explorer 2000, we used an interactive return path called DAVIC, because it was, at the time, a state of the art -- and relatively small pipe, but it was state of the art opening.
SCHLEY: It got a signal back to the other end, to the headend.
KLAER: Yeah, and then, nowadays, it’s all done on the DOCSIS pipe. So, it’s more from there, but DOCSIS didn’t exist. I was with some Time Warner executives -- I won’t give you the names -- but it was interesting how they summarized the success of broadband. It was -- and in fact, they built the two-way network on the cable plant and everything, for video on demand, which meant that they could then capitalize it when the Internet showed up.
SCHLEY: Someone once said that cable was such a great parley business, because one enabling element lead to another. I guess that’s an example.
KLAER: A hundred percent, that’s exactly what happened.
SCHLEY: So, it’s interesting when you talk about the relationship with the Silicon Valley companies -- obviously there was a seminal transaction in this industry that affected you guys, when Cisco acquired Scientific Atlanta. What set the stage for that? We had always thought of Cisco as an Internet company, and a router maker, and now they’re in deep in the cable business.
KLAER: Not so much anymore, they’ve sold off most of their holdings.
SCHLEY: No, I know, but at the time, right?
KLAER: So, Cisco -- you’re right -- builds routers and switches -- and damn good ones. If you are somebody selling routers and switches, what do you want? You want more bits going through them. What creates bits? Video. Video is far more bandwidth intensive than most other applications, and so what they wanted to do is they wanted to figure out how to position their -- you know, remember at that time they had the CMTS -- Cable Modem Termination System.
SCHLEY: Cisco did.
KLAER: Yeah. And so, they had routing, if you will, built into cable through the DOCSIS side of stuff and they wanted to figure out how to build on and grow the video, just in general. Getting more bits running through the infrastructure. Scientific Atlanta was the 105th acquisition by Cisco, and they’re now, well, I think they’re well north of 200.
SCHLEY: They saw a need to be in place at the residential set-top level?
KLAER: They wanted to help influence the residence, and then the traffic coming out of those homes, going through their routers and the core network.
SCHLEY: So, you stayed aboard then? Is that correct?
KLAER: I was there for ten years. They acquired Scientific Atlanta, I want to say in 2005, and I left in 2014.
SCHLEY: I will give you all the leeway to answer this as delicately or diplomatically as you wish.
KLAER: (laughs) I like it already.
SCHLEY: What was the cable industry’s reaction to having companies, like Cisco and other participants, sort of swoop in?
KLAER: So, I would say mixed. On one hand, Cisco had a balance sheet to die for, and they were not afraid to do acquisitions, and they did a bunch in the space. Scientific Atlanta, when I was there, whether Sid Topol, or Jim McDonald, or Bill Johnson in the middle, we would look at a thousand companies and buy one. Cisco had -- they are -- people joke about them being the Borg, but --
SCHLEY: The Collective.
KLAER: They are good at that. So, if you had something that could leverage the Cisco balance sheet -- like, for example, on the international side--. I’ll give Cisco some credit where it’s due. One of the things we could do, we could go into places like India, and other places that aren’t the best credit worthiness, and we could give them a line of credit, because of our balance sheet.
SCHLEY: Because you had the financial resources to do it.
KLAER: And Scientific Atlanta could have never done that. So, on the positive side, they had nuclear weapons and were not afraid to use them. And so, that part was good. On the other side of it -- and I’ll try to be delicate, to use your word -- Cisco didn’t really understand what they bought. And so, when I described earlier how you integrate third-party devices, that is a very foreign concept to Cisco. Cisco’s very good at selling devices -- a router, or a switch, or a telephone system. They’re not good at end-to-end integration. And so, the companies that were successful that they acquired were things that were global in nature, that could lean on the Internet, and they could apply their marketing machine, and they could blow it out to the world.
SCHLEY: It was a very comfortable world to belong in.
KLAER: If it was generic, they could train up everybody, they could get it to market incredibly fast. On video, you know, if I walked into Hong Kong Cable, what they would want would be something materially different than what UPC would want, right? And so, there was a lot of bespoke, if you will, custom engineering work that they weren’t really tooled to do. And so, they had challenges with that.
SCHLEY: And they maybe didn’t necessarily -- they weren’t cognizant of that at the outset.
KLAER: Apparently not.
SCHLEY: But in their defense, do you agree that cable is a little bit clubby? It’s a different industry than some industries, to an outsider.
KLAER: And then the club’s getting smaller every year.
SCHLEY: The club’s getting smaller every year, that’s true.
KLAER: But I will say, Scientific Atlanta did deliver. When Cisco buys something, they create what’s called a “commit case,” which is basically how much, among other things, what profit you’re going to deliver. And so, for five years, we delivered what we represented.
SCHLEY: That’s a good business.
KLAER: Yeah, so it was good business for the first five years. During that same five years, we had five different bosses.
SCHLEY: Yeah, I sort of remember that.
KLAER: Yeah, so it was kind of an interesting evolution.
SCHLEY: Was it culturally different? Was it fun? Was it looser? Was it more rigid in the management style?
KLAER: So, when you’re with a company that’s four billion in revenue, you can walk down the hall and have a debate with whoever has input, whoever is a decision maker. It’s really easy, and four billion is a good-sized company. When you’re part of a -- what is it -- 50 billion, at the time, or whatever, company, and their headquarters is Silicon Valley, a lot of times, you don’t even know who you’re fighting with to get something done. And so, I personally spent more time figuring out how to work the internal -- if I wanted to do a deal that was good for my customer, I had to chase down many different people inside of Cisco to figure out how to do the right thing by the customer. And ultimately, they would do it, it would just take so much more energy.
SCHLEY: But the part of it is the complexity of having 105 companies and trying to put them together.
KLAER: Well, we were one of how many product lines? So, I understand the complexities, and at the same time it was just the nature of being part of a big company. So, again, being balanced about it, they had a balance sheet that we could leverage and they had some great tech -- some wonderful brilliant technical people. On the other hand, you had the rigidity that came with size and scale, that made it a little bit harder to get things done.
SCHLEY: And then on the other side, Ken, I’m trying to follow the lineage of the Anixter, ANTEC, ultimately ARRIS. So, ARRIS really, was your competitor. Is that right? In the set-top world?
KLAER: So -- now I’ve got to resurrect -- so ARRIS was born out of DOCSIS, primarily voice. So, remember --
SCHLEY: Oh, that’s right.
KLAER: We all take it for granted now, that wireline into your home, and to Bob Stanzione’s credit, I mean, he came from Lucent and he had a passion for DOCSIS and voice, and that’s what they built their anchor, if you will, their business around. They didn’t get into the set-top business until they acquired Motorola from Google.
SCHLEY: That’s right, from Google. See, how soon we forget. This pattern. You’d known of Comcast all your career, obviously. Watched them become a large company from a mid-sized company. What opportunity arose for you, with regard to Comcast?
KLAER: So, I’ve known Comcast way back when they were the little guy. (laughs) I used to sell to people like -- I tried to sell to Frank Raggone. I sold a fair amount to Brad Dusto, and successors. And David Fellows actually was a Scientific Atlanta guy, before he became the CTO. He was my boss when I was doing some of the work at SA. And then, Tony Werner was a customer of mine, when he was from Liberty Global -- when I was doing the international stuff. And so, I’ve kind of -- you know, you called it a club -- I think I’ve grown up in the club, I’ve been very fortunate. So, I knew them when they were big, and as you would expect, Cisco would reorganize our group quite a bit. So, I went from just being international at one point, to helping with international and domestic.
SCHLEY: With Cisco.
KLAER: With Cisco. And I started helping them, helping Cisco, get back into the gateway business at Comcast. And so, I got reacquainted to a lot of people -- some great people there, Mark Hess, Steve Reynolds at the time -- if you know Steve, he’s at Imagine now.
SCHLEY: Yes.
KLAER: So, I guess they liked what they saw in me when working with us on the XB3, and I got a call from Sree Kotay and Tony Werner saying, “Hey, would you look at coming to help do some device stuff with us.”
SCHLEY: What device family were you focused on?
KLAER: So, Steve Reynolds, I replaced him. He wanted to move back to Denver, get done travelling. So, I pretty much had -- and again, Comcast has evolved the org design, but effectively all customer premise devices were rolled up in that group. I will say that, I initially started heavily focused on video. We had the XB3, as I said -- in that case, I was fortunate enough to hire a really brilliant savant, a guy named Fraser Stirling, who was super, super special.
SCHLEY: One of these many hires that you think are better than you.
KLAER: He’s actually better than me. I am the biggest fan and supporter. And basically, what I did was help Fraser was figure out how to reinvent how we do things at Comcast.
SCHLEY: Big charge though.
KLAER: I’ll tell you an interesting story, from my point of view, as a vendor and then on the other side. So, you ever wonder why Comcast has had, historically, big ugly boxes?
SCHLEY: Sure, why?
KLAER: So, the cable industry standard for operating temperature range, for years and years and years, inside a home, was zero to 40 degrees Celsius.
SCHLEY: Okay, who knew?
KLAER: And then some folks inside Comcast who had influence said, “Well, you know, somebody could take that set-top and put it inside a home entertainment center, and the doors sometimes could be closed, and the air flow is bad. We should figure out how to change the spec to zero to 50.” And of course, when I’m on the other side of the table, I said, “Well, zero to 50, that means you’ve got to have air flow, and make it bigger” --
SCHLEY: Yeah, you’re starting to worry about all the --
KLAER: Heat. You’ve got to get rid of the heat, right? And then -- you’ll get a chuckle out of this -- and he said, “But we’re going to test to zero to 60.” And my engineers are coming in, “What do I design to? Is it 50 or 60?”
SCHLEY: Oh my gosh. (laughs)
KLAER: And so, the short version is, if you look at our XB3 and compare it to our XB6, XB6 obviously shows off how far we’ve come in terms of design. XB3 is a big device.
SCHLEY: To accommodate that range?
KLAER: To accommodate this -- yeah.
SCHLEY: Oh my gosh.
KLAER: So, one of the first battles I had to fight was wrestle control. If I owned the product, I owned the specs. And I had to explain to people, “Look, you’re burdening 100 percent of the devices, for a small percentage, and” --
SCHLEY: For this really narrow use case.
KLAER: Yeah, yeah, and not only that, if you look at -- “Who’s our competitor of the future? It’s Apple, Amazon, Google. Look at their devices. Look at our devices. Which one would you rather have?” And I’ll go back to Fraser. Fraser’s the one that came up with the design standard, and we fought and we wrestled control back in to where it belonged, and if you look at our devices now. I’ll give Fraser and the team credit, they have won some design awards. We’re now, in my mind, as sexy as anything anybody else is doing.
SCHLEY: Sleek looking boxes. I think the parable’s interesting though, because it testifies to this need to sort of divine what’s going to happen in a future environment, right?
KLAER: A lot of it is knowing who your competition is going to be. For the future, right? In the history of cable, one could argue, that it was not nearly as competitive as it is today. I’ll say it that way. You know, we grew up franchise, then we had satellite competition, and then the telcos. They went from broadband into video, and now with all the virtual MVPDs and over-the-top players. Now we’ve got the content owners are going direct to consumers. It is a hyper-competitive market that is much different today than when you or I started in the industry a few years ago. So, you have to adapt and adjust -- which I give Brian Roberts, and Tony Werner, and Dave Watson, the credit for.
SCHLEY: But keeping an eye on the competitive landscape is equally important to trying to figure out what consumers are going to want down the road, I guess.
KLAER: They’re linked. You’ve got to know what they have an appetite for, where they place value. But I will also say, one of the things at Comcast that we’re very proud of, with X1 -- we’ve cloudified pretty much everything that you can. And what that means is, if you want to make a change, you change it one place, versus 23 million places, right? And so, what that means is, you can actually experiment with things. So, we don’t always have to know what consumers are going to love, all we can do is put stuff up in the cloud and -- if you ever play with your X1, there’s Comcast Labs in the settings -- and you can see some of the stuff that’s coming, and we have lots of --
SCHLEY: You can measure response and --
KLAER: Yeah, we have lots of ways of figuring out if people value it or not.
SCHLEY: I can’t leave it at that. You have to wax poetic a little bit about moving to the cloud. It’s an enormous platform transition.
KLAER: So, you know, we talked about it years ago, at Scientific Atlanta, and the conclusion at the time it was --. First off, the cloud isn’t what it is today, but there’s different variances on what you could say “cloud” means -- but the real problem in those days was the network, meaning the --
SCHLEY: Getting to the cloud.
KLAER: -- the two-way broadband HFC network was not to the point where it was viewed to be reliable enough that you would want to have, if you will, lifeline -- and I say “lifeline” meaning always have an access, always on, at a high enough reliability. And so, Comcast has invested billions in getting that infrastructure to the number of five-nines, four-nines, whatever it is, needed so that you have that part of the equation solved. In parallel to that, then what happens is, you know, Amazon’s come out with what they’re doing with the public cloud. We’ve looked at a bunch of different analysis of doing it privately -- meaning servers and stuff on our premise -- and publicly, and frankly, they’ll be a hybrid of both, because applications make sense to do locally, and some are fine to put public. And there’s a lot of value to public. So, we take advantage of Amazon. We’re working with others as well. It’s very easy to spin up an instance, it’s very easy to have redundancy and protection, and things that didn’t exist years ago.
SCHLEY: It’s amazing, hearing you talk, how fluid telecom technology is. It never stops, right?
KLAER: Not in my lifetime.
SCHLEY: I guess that’s part of the glory and part of the stress of managing a technology business.
KLAER: I think when you stop evolving is when you start shrinking and start losing. The good news about Comcast, there’s great awareness of the state of our industry, and what’s changing about it, and we’re making adjustments as appropriate, and I feel like I’m part of a winning team that’s going to navigate through all of this stuff.
SCHLEY: Well, awareness is an interesting word, because I think one of the gems and jewels of the cable industry today, is this creation called “RDK.” Can you explain what it is?
KLAER: Sure, so -- this is another funny story. So, RDK stands for Reference Design Kit -- some engineer must have come up with that name.
SCHLEY: Of course. (laughs)
KLAER: And, if Sree heard me talking he would kick me, but RDK effectively replaces, if you will, the middleware that was in these digital devices. And RDK is the plumbing inside the set-top box -- oversimplifying. We -- Comcast, before I joined, but shortly thereafter -- created a joint venture with Time Warner, at the time, and Liberty Global -- so it’s now Charter and Liberty Global, and Comcast. With the idea being that we wanted to promote, as much as we can, a global standard for what I would characterize as “service provider customer premise equipment devices.” So, it started out as video, but now it’s broadband, it’s cameras, it’s a bunch of other stuff. And so, the funny story is, Cisco had acquired a company called NDS.
SCHLEY: Yeah, I remember that.
KLAER: NDS had a piece of software called “Fusion,” that they thought was going to be the next generation of middleware for cable.
SCHLEY: Doing some of the same things that RDK was --
KLAER: Functionally the same things, but not nearly as well, in my opinion. So, I went to the very first RDK conference in New York, as a Cisco employee, and I wrote a memo back to the senior managers at Cisco, that was probably not very popular. But I remember I wrote off --
SCHLEY: This is your Jerry Maguire memo.
KLAER: I wrote a memo to Jesper Andersen, I said, “I went in a skeptic and I came out a believer, Fusion is dead.” (laughs) And I was right for cable.
SCHLEY: Can I ask why it didn’t have a good prognosis?
KLAER: So, Fusion -- let me back up. So, RDK -- I’ll get the number wrong because it evolves all the time -- on the video side is 90 percent open source. RDK is an open community, so if you join RDK you have access. It’s free. And unlike Android, there’s no anti-fragmentation, or any of these other terms that people don’t like. You can branch anytime you want. You don’t have to come back in. If you don’t come back in, you miss the benefit of staying with the tip of the trunk. One big thing is it is proprietary with Fusion versus open source with RDK.
SCHLEY: That’s a huge difference.
KLAER: But the other thing, too, is if you’re part of RDK, you’re drafting behind Comcast spend. We are the biggest component -- we own most of the components that we try, but not all of them. Cisco, for example, contributed the bus structure for the RDK broadband.
SCHLEY: So, they’re in.
KLAER: Yeah, oh there’s 400 companies are in.
SCHLEY: Wow.
KLAER: It’s gotten to be a very big thing. And so, it is an open community. The reason it’s not 100 percent open source is stuff like security-type things, you have to be very careful. So, it started with video, and now it’s broadband. But I’ll give you an example of some of the modules. “Hardware abstraction layer” it’s called, on the Wi-Fi. So, we now have Wi-Fi in the broadband device, we have Wi-Fi in the set-top device, we have Wi-Fi in the camera -- and guess what, it’s the exact same abstraction layer, the same APIs, and same code. So, we have the ability through RDK to be very, very efficient in how we develop, and how we test, and again, we make it transparent and open. Anybody that’s part of the community.
SCHLEY: And originally, you wanted scale, right? It’s not just Comcast and Liberty and Charter.
KLAER: We did want scale. As big as Comcast is, we’re not Apple, we’re not Google. So, the more we can align an industry around a common standard, for the goodness of the industry, everybody wins.
SCHLEY: Did RDK precede the X1 evolution, or...?
KLAER: No, it was concurrent. They were at the same time.
SCHLEY: Don’t you find it interesting how even your competitors have great praise for X1? I mean, it’s -- even the tech guys, the elites of Silicon Valley love X1.
KLAER: Having been a device guy, all of my life -- and I’ve travelled the globe, I’ve seen all kinds of stuff all over the place -- in my heart of hearts, I believe it is the state of the art, right now.
SCHLEY: Yeah, I don’t think that’s self-serving, I think the people have come to the same conclusion. But isn’t it interesting, Ken, to think about at the early end side of your career, you had closed systems, proprietary architecture -- the industry has come a long way.
KLAER: I was going to say, it was a great time to be a vendor. (Laughter) Nowadays it’s a little different.
SCHLEY: You mentioned the “duopoly,” referring to what used to be, you could choose one of two companies, and not a third.
KLAER: As the industry’s consolidated, we’ve taken more control of our own destiny. One of the things about RDK that I love to brag on -- do you know how often we push code to the set-top box? Every two to three weeks – on par, or faster than some of the biggest technology providers.
SCHLEY: No kidding.
KLAER: And so, what’s different from the world that I grew up in. The world I grew up in is -- because I would test it in my lab environment, and then I would carry it over to the customer’s environment, and all that. And you would do one major code release in one year, and you might do some bug fixes --
SCHLEY: And that’s it.
KLAER: And so, it’d be huge, it’d be big, and so what happens in RDK world is instead of having big, monolithic updates, you’re pushing small bits of code. Well, guess what, when you push small bits of code, you have less probability for error, because you’re changing less things.
SCHLEY: I would think.
KLAER: You can test it faster, you can spin it quicker. So, I would argue that our disposition of the way we push code is state of the art.
SCHLEY: Right. And much more iterative.
KLAER: Very iterative.
SCHLEY: I wanted to ask, while we still have a little bit of time. When you aren’t developing, and selling, and working on technology, you’ve been a prolific volunteer with the YMCA organization, in particular. How does that fit with your professional life and why does it matter?
KLAER: I think it’s always good to give back. And I found that when I was in Atlanta. It was a particular area of the YMCA that I felt like I could add value and bring back, and I was on the board for a number of years. We did a lot of good things, and helped a lot of people. I’d like to do more of that, frankly. When I moved to Philly, I was so engrained in my new job, and I moved to Denver and -- one of the things I like about Comcast is that we’re big in believing of giving back, and, I don’t know if you’re familiar with Comcast Cares --
SCHLEY: I am.
KLAER: We crossed our 1 millionth person doing that --
SCHLEY: Volunteer.
KLAER: Volunteerism, yes. So, I love doing that kind of stuff, I’d like to do more of it, I’d love to work with Jana here at the Cable Center. I mean, whatever -- I like the idea of giving back.
SCHLEY: What sort of advice or counsel would you give to someone who’s coming into this industry today? Well, first of all, why? Why would you work in the cable industry if you’re a 21-year-old super coder, or a technology savant?
KLAER: Well, I don’t know about the cable industry. I would talk about Comcast. If I were a super coder or savant, I would want to work on the coolest technology, and I got to tell you, we’re driving the coolest technology. We believe in tightly integrated teams that own things end-to-end, cradle-to-grave. So, you wouldn’t just be doing dev, you could be part of a team -- not only dev, but you got it out in the field and you operated it, so you own it through the lifecycle. We are a culture of micro-cultures, which -- this is going back to the Cisco analogy, or comparison -- by virtue of allowing differences, you can have groups focus on things that motivate them, and recognize that what works in Seattle may not be the same for Reston, Virginia. And we actually encourage people -- don’t get me wrong, we share the Comcast values at the core -- but each entity is entitled and encouraged to create their own micro-culture around what’s important to them.
SCHLEY: It’s a little bit of a bold departure, I think, because sometimes inviting lots of ideas can be chaotic, right?
KLAER: I think what you could say is, inviting micro-cultures, you could end up with some duplication of type work, I wouldn’t necessarily call it chaotic. You have a bunch of well-meaning teams that are on a mission, and what you might argue is that we may not be one hundred percent efficient -- meaning, you know, people are doing code that another group may have already done that we don’t know about, because we’re so diverse.
SCHLEY: That’s an acceptable outcome.
KLAER: Because the individual groups are working that much faster than the alternative. And so, we’re always looking for ways to optimize and get better, and more efficient. Don’t misinterpret, but I think the benefits far outweigh the penalties.
SCHLEY: I think it’s an interesting organizational precept, that maybe didn’t exist five or ten years ago.
KLAER: Well the technology -- when you talk about the public cloud, you’re often talking about these micro-services. When Amazon talks about their teams, they have the two-pizza rule. You know the two-pizza rule? If you have to have a team, and you want to serve them lunch, and it takes more than two pizzas, your team is too big.
SCHLEY: I like it.
KLAER: So, we try -- I don’t have the right number, but it’s in the thousands -- we have thousands of micro-services. And you’re able to create these small working teams that own things cradle-to-grave, and the young talents love that.
SCHLEY: Ken, you’ve mentioned a few names -- people who’ve been influential from Sid Topol, to Necessary, to Bradford, to Tony Werner. Are there other figures or people you’d care to comment about that have, sort of, been really important to your professional development?
KLAER: It strikes me that every one of the names that we’ve rattled off, so far, have been males. So, I’ll do it another way. My first boss was a woman named Melissa Timmons, who taught me so much at Scientific Atlanta about being a professional. At Comcast I work with some great women, Noopur Davis is a rock star, she does our security and product -- corporate and product security. And then, Sherita Ceasar, who I worked with at SA, and now at Comcast. So, these are all people that had an influence on me. I’d like -- one of my own goals in life is to figure out how to promote the diversity. We believe a diverse workforce is best, because our customers are diverse, and you want to make sure we have multiple points of view as we’re doing anything.
SCHLEY: The other thing that I think has come out a couple times, I think it’s really interesting. I’ve heard this elsewhere, but you really seem to articulate with some degree of presence, is trying to hire people who could take your job someday, who could be better than you. What’s that all about?
KLAER: It has just served me well. Probably shouldn’t tell this story, but I went to Tony and said, “Hey, this guy Fraser...” At some point, he’s thinking it would be like a year or two down the road. Well, three months there was another reorganization and Tony said, “Hey, I’d like you to do this other stuff.” And so, I’m good with that. I’m also at the twilight of my career. I’m happy to do whatever the company would like me to do, and I really think the value that I could bring the company is growing and developing people. I think that’s all healthy and all good.
SCHLEY: Well, it’s been a great conversation, and I think, I think that admonition I expressed at the outset -- “follow the set-top box” – was pretty good. I think it still carries us through. We went from EPROMs to X1 in the space of an hour, that’s not too bad.
So, you’ve had a lot of international experience, but one initiative that you’re involved deeply in, is the India Engineering Center of Comcast. What is that?
KLAER: I’ll go back to my Scientific Atlanta days -- I said we didn’t buy very many companies -- one of the ones we did was a company called BarcoNet, and they had a development center in Chennai. It was done on the transmission side of the shop, and I was on the subscriber side of the shop, and so the transmission guys were going to shut it down, and myself and Burchall Cooper -- if you know that name -- we went to the management and said, “Let’s try it. We think there’s really good talent over there, and it’s very cost effective, and so let’s try it.” I guess I lost track of the number of years, but call it ten-plus years of working with them. We’ve learned that if you do things the right way, the productivity coming out of that development center was really, really good. So, fast forward, I come to Comcast, and I’m running the CPE -- Customer Premise Equipment -- team, and I had -- I forget the number, 700 employee organizations -- two-thirds of them were contractors. And, a large percentage of the contractors were in India. So, I said to the management, “Why don’t we have badged employees in India?” and they said, “Well, if it makes sense, put a story together.” So, I worked with some friends of mine in India, and put a strawman together, and basically what I was able to convince them of is, “Look, if you do it right, you have badged employees that are worrying about their promotions, versus a contractor who’s worried about their next contract. And not only that, the contractors have a margin. And so, if you hire them directly, there’s actually some financial benefit. Which frankly wasn’t the real driver, but it all helped with the story. So, a little over two years ago, we started. In December, we finished year two. We went from zero to 400 badged employees, we now have a third module -- so we have seating now for another 225-ish, or so. And, basically, what we’re doing is we’re taking contractors in India and making them badged employees. Comcast is so big, you can imagine the number of contractors we have in India being a very big number. And so, this is just taking a percentage of them, and what’s very exciting to me is the efficacy of all of the groups that are there today, including people working on RDK. If you want to improve, you’ve got to measure, right? And, we track and measure all kinds of stuff, and the efficacy out of the teams in India -- once they get up the learning curve, once they do the recruiting and hiring -- the efficacy is universally better than what it was with the contractors.
SCHLEY: What kind of work are they doing?
KLAER: So, we have -- I’ll call it four or five groups there -- the first one was RDK, because that’s who used to work for me --
SCHLEY: Makes sense.
KLAER: If you know Labeeb Ismail -- who’s probably one of the best software development leaders I’ve ever worked with -- is Indian, and so he had a passion for doing it. We have what we call our IT Infrastructure folks are there -- so when we push Microsoft or whatever updates it’s done by those guys. You may be familiar that we now have Xfinity Mobile, and so, some of the back-office billing work is done by a team in India. We recently launched a security operations center. So security, as you can well imagine, is becoming more and more intense as the hacking world continues to grow, and so we’ve expanded by using some great resources in India for that. And then, ironically, the last group moving in will be my video team. So, the stuff that I have responsibility for today’s moving in this year.
SCHLEY: It truly is a small world, right? That’s amazing, thanks for that.
KLAER: Well, it’s been great, they’ve done a fantastic job.
SCHLEY: So, Ken, for having spent an hour with us, talking from about the evolution of the set-top from the EPROM to X1, we totally appreciate your insights. Thank you for watching for the Cable Center’s Hauser Oral History series, I’m Stewart Schley.

END OF INTERVIEW

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John Kurpinski, Sr.

john kurpinski 2017

Interview Date: December 11, 2017
Interview Location: Denver, CO USA
Interviewer: Stewart Schley
Collection: Cable Center Oral History Program

Stewart Schley: Greetings and welcome to the Cable Center’s Oral History Series. I am Stewart Schley. Today from Denver I have the pleasure of interviewing and conversing with a gentleman who’s really one of the preeminent engineers of the modern era of cable in building cable systems everywhere for a long time. In a large part, John Kurpinski’s career tracks that of the development of cable itself since the 1970s. So, John, a pleasure to have you with us today and thanks for taking the time.

Your career spans so many places and so many moments that there’s a lot to talk about, but there’s nothing wrong with starting at the start. So how did you find you way into the business in the first place?

John Kurpinski: Actually it's 1963 I started in cable. I had gone to Temple University for two years to take a course in electrical engineering right after I graduated high school, in the evenings. And I was working at a company, and one of my fellow students happened to work for Jerrold Electronics. And I was not working for an electronics company, but I was going to school for electronics. I wanted to get into a company that manufactured something where I could apply what I was learning in school. Consequently, I got a job at Jerrold Electronics in the microwave division as a mechanical assembler. I switched from Temple to Philco Technical Institute, which was an accredited school run by Philco, who was a manufacturer, basically, of consumer electronics.

Schley: I remember.

Kurpinski: They also were one of the first mainframe computer manufacturers. They were competing against IBM, UNIVAC and Raytheon. The first year of the two-year course, which was four nights a week, three hours a night for two years. Hopefully, you wind up with an associate’s degree with a combination with what I had done at Temple, which was computer maintenance. The first half was more electronics, but with an RF background, radio frequency. Then you had to make a decision as to whether you wanted to go on radio/television or into computers. So I thought hard about it, and I decided I would try the computer course. And I did graduate. I think it was 211 students started and 13 of us graduated. Computers were very new and the first computer I worked on was vacuum tubes. But I was still working for Jerrold at the time and I had progressed through different levels of technician and engineering, so I decided that my career would be cable instead of computers. Which today seems kind of strange, but it's not, because if you look at cable television today, it's actually a hybrid of different technologies. One of them happens to be Internet and computers. So, I did have a background in that, but even though I didn’t fully fulfill that, I took the RF path and just basically graduated to different levels of engineering within Jerrold and had the opportunity to go into sales engineering. New York State and Long Island were my sales territory.

 

Schley: John, where was cable at this point? This is mid-late 60s…?

Kurpinski: This is 60s, correct. 60s or early 70s.

Schley: The industry is 12-channel systems and such?

Kurpinski: Less than 12.

Schley: Less than 12.

Kurpinski: Don’t forget, it's still debatable where cable started. It was either in Colorado or Pennsylvania, and because I'm from Philadelphia, I kind of say it started in Pennsylvania. But I believe the NCTA gave credit to a simultaneous start in 1948 between Bob Tarlton in Latrobe-Ligonier, Pennsylvania, and I believe it was Bill Daniels here in Colorado. But it was off-air, three channels, maybe four if you could get it. There were no Home Box Office, Showtimes, ESPNs, MTV. None of those networks were in existence yet. So, cable TV, if you remember the acronym “CATV”—Community Antenna Television. Cable was started mainly to deliver signals to rural areas. For instance, in Pennsylvania, probably as it was in Colorado, which I'm not that familiar of. Most of the TV stations were in Pittsburgh, three networks. And I don’t even think there was a PBS back then. But basically, three networks out of Pittsburgh. If you lived on the other side of the mountain from where the TV pictures, television, was being transmitted, you could not see anything. So, let's take for instance, you own a TV and appliance store in some little town like Latrobe-Ligonier, Pennsylvania. You went to a convention and you saw this wonderful thing called television. Little type of screen. You said, “This is great. This can boost my appliance business.” So, you go and buy some TVs, along with your radios, and you put them in a store, and lo and behold, you turn them on, and the customers come in and they hear about this wonderful thing called television and they can't see it.

Schley: Right.

Kurpinski: So, they got the bright idea that, gee, the antennas are on the mountain, so if we run a line down from the mountain, right to the TV store, and now we can see pictures. And lo and behold, that’s what happened.

Schley: CATV.

Kurpinski: And now you could see it in a television store, an appliance store. Or you bought the TV and you took it home and you turned it on, and there was no picture. So now you had to figure a way of splitting the signal. And basically, that’s how cable television started.

Schley: Your employer’s role, Jerrold, was what?

Kurpinski: Instrumental—you can see on this meter the name Jerrold? Milton Jerrold Shapp. Milton Shapp was the two-term governor of Pennsylvania, founder of Jerrold Electronics. He was manufacturing amplifying and splitting devices for antennas that you put on top of your house. And one thing led to another, which lent itself very nicely—because what he was doing with the antennas could actually be put out to split signals, like I mentioned from the appliance store to the community.

Schley: It sounds sort of inbred today, but it was really an entrepreneurial, really a risky endeavor at the time, because it wasn’t a proven mass scale business yet, what he was doing.

Kurpinski: It was—you know, getting television pictures to homes sort of drove the business of developing more advanced electronics to deliver those pictures to further and further distances. So now you have the appliance store on Main Street, of course, you had the main cable running down Main Street, and you split it off, and everybody beyond Main Street, you needed amplification, you needed different types of cables. The cable industry, since I've been in it, in 1963 and since it started in 1948, to this day, the technology has driven the marketing. And then the marketing has driven the technology. So, it’s been one driving the other.

Schley: What happened then to you career-wise around this time? You started out in microwave assembly, I think you said, component assembly, and then where did you go from here?

Kurpinski: I started out in the microwave division, then I was co-plant manager of the factory parts and service department, and the Eastern Region sales manager, Walt McCleary, asked my immediate supervisor if he could ask me to be in sales, sales engineering. They had an opening in New York State. So, I left the factory, so to speak, and I went into the field as a sales engineer. Most Jerrold salespeople were sales engineers because the way you sold was to explain the technology to a customer and basically add a three-piece suit and a station wagon, and one of these [pointing to Jerrold 704 meter on table]

Schley: A customer being an individual who ran a, who owned a cable system?

Kurpinski: Owned a cable system, correct. Mainly the smaller individuals.

Schley: It was a road job, right…?

Kurpinski: When I moved to Upstate New York, there were, I think, 240 independent cable systems in the state of New York. And none of the big cities were franchised, except Utica. None of the Island was franchised. New York City was not franchised. That’s another story for the franchising wars of the 80s.

Schley: I did a double-take because now there's been, of course, so much tremendous industry consolidation that you don’t hear those numbers anymore. But these were all independently owned businesses.

Kurpinski: Mainly, like I said, television and appliance stores.

Schley: I wanted to talk—you’ve been instrumental on the association side of the business. But before I get into that, tell me then what was the career progression for you post-Jerrold? What did you do after that gig?

Kurpinski: I left Jerrold in 1977 for various reasons. Mainly because my job position would have changed and that wasn’t a career path I wanted to take within the company. So, I had that opportunity with Cable Services. Mr. John Roskowski, who owned Cable Services. And they were basically an unofficial Jerrold distributor, so I would be selling and servicing what I was doing before I went with Cable Services. He also had a full-service construction company.

Schley: That’s what I thought.

Kurpinski: So, we did total turnkeys. So, all you needed was a franchise and money. You gave it to us and we would turn it over as a fully operational cable system, ready to hook up customers.

Schley: I wanted to kind of drill into that. So, if I had the good fortune to gain a cable franchise from a small municipality, but I don’t know a thing about the business, or I'm a novice, I sort of turn it over to you…

Kurpinski: Yes, you would. Because we would handle everything.

Schley: What were you building in the late 70s? Again, 12-channel systems?

Kurpinski: 12-channels because it had progressed from vacuum tubes to the first transistorized amplifiers. And basically, they were strip amplifiers, nothing modularized yet. Then the modularization came into being along with the bandwidth increase.

Schley: What sort of metrics can you provide to build a cable system? I mean, did you build a mile of plant a day? Or what were the sort of hurdle points?

Kurpinski: There’s a lot of different facets to go, to have to come together in order to build a cable system. The first—just because you got the franchise doesn’t mean you can go start the build. There was such a thing called pole attachments and—

Schley: Somebody else owns the pole.

Kurpinski: Mainly the power company owns the pole. And telephone companies own the pole. Now depending upon the size of the pole, cable TV was the lowest on the pole.

Schley: Physically the lowest?

Kurpinski: Physically the lowest because it was the lowest voltage.

Schley: You told me earlier the highest voltage got—

Kurpinski: The highest voltage was—

Schley: The top position…

Kurpinski: Right. But there had to be a certain amount of spacing in between each of the cables. Now if the pole was not large enough to accommodate it, what you would have to do is re-arrange the pole. Either raise the power or raise the telephone so you could put the cable. Now once you did that, if you violated the rule for ground clearance between the ground and the lowest cable, and you could not go up anywhere, you had to pay to change the pole out.

Schley: You'd literally put a new pole up.

Kurpinski: You would have to pay the power or telephone company to put a new pole up.

Schley: So, when you had to re-arrange those various tenants on the pole, was Cable Services or was the cable company allowed to touch the power company’s lines? Or did you have three different contractors coming in?

Kurpinski: Three different contractors.

Schley: Just the complexity of it is really kind of enormous.

Kurpinski: Well, most people don’t understand that. I digress slightly. Back then, one of the biggest issues facing the cable industry was pole attachment rights. Because the telephone company and the power company did not want you on their poles. And if they did let you on their poles, there were exorbitant, sometimes as much as $4, $5, $6, $7 per pole per year.

Schley: That’s a huge battle. Wow.

Kurpinski: Now, when you figure there's an average of 50 poles per mile, it comes out to a lot of money.

Schley: No kidding.

Kurpinski: Plus, an average back then of $1500 to re-arrange a pole. So, the upfront cost, before you even had one customer, or you even built any cable, was pretty substantial. Along with whatever it cost you to obtain the franchise.

Schley: Sure. That’s why I asked—to get a sense of just the physical labor required to build. These are mostly aerial—probably all aerial systems.

Kurpinski: Underground is a different story.

Schley: Different story. OK. Was it around this time that you began to have a role in the formation of SCTE, then Society of Cable Television Engineers?

Kurpinski: Correct. My first involvement with SCTE was in 1974 when I was in Upstate New York. I was still with Jerrold. It was an informal meeting group. That’s when I first got involved, in 1974.

Schley: What was the impetus, or what did you guys have in mind?

Kurpinski: Well, it was training. As I mentioned to you on our call the other day, to this day—anyone can correct me if I'm wrong—but because cable is such a hybrid technology of voice, video and data right now—I don’t know if there is a college where you can walk out of high school, walk into a college and walk out with a four-year degree in cable television engineering. I don’t know that. I know a lot of universities have different courses, like University of Wisconsin is pretty big. I lectured at Syracuse University, Newhouse School of Broadcasting back in 1973, on the future of cable television.

Schley: This new thing: cable television.

Kurpinski: It was kind of strange for a 24-year old sales engineer to be at the bottom of a lecture hall with all these faces looking at you. It’s like, OK, I'm the expert.

Schley: Well, you were, sort of. I was going to ask: where did companies like Cable Services hire their technicians? Where did they find them?

Kurpinski: Train them yourself. Len Ecker, who was my first mentor and superior in the microwave division at Jerrold. Len Ecker was also a design engineer. He designed another piece of equipment called the 601 Sweep Generator. But he was plant manager of the microwave division. And Len was the one that basically put me into management. He did training courses. The Jerrold Technical Seminar was probably then one of the only and the premier course for training. It was a five-day course. And there were anywhere between 100 and 200 technicians learning cable television, all aspects.

Schley: This concern for broadening the training availability regimen was what sort of instigated SCTE to an extent?

Kurpinski: That was totally divorced from SCTE. This was done by Jerrold. That was a company initiative.

Schley: But what did you see that provoked the need for SCTE as a training organization? Early on?

Kurpinski: Like I mentioned, I was a sales engineer and I used to call on all the different customers all over New York State and then afterwards, were other companies in many, many states and the Caribbean. And I would go in and some of the questions that the technicians would ask me were things that if you're a technician, no matter what level, you should know. So, I said, “Wait a minute. Where did you learn this?” “Well, I just learned it from him.” It’s like learning to drive from your buddy. You learn all his bad habits. You don’t go to a professional driver. Well, there was no place you could go to and learn cable television.

Schley: In an organized way…

Kurpinski: Len Ecker’s course was one of them. And then some of the other manufacturers, like Magnavox and Scientific Atlanta, they would also start their own, C-COR started their own. But for years and years and years the premier course was Len Ecker’s course. Customers that had other manufacturers of equipment would send their technicians to Len Ecker’s course.

It was supposed to be a generic course. But just by your announcement, Len Ecker from Jerrold. And, of course, you're talking about your own equipment. Theory is theory, no matter whose equipment it is. I foresaw the need along with SCTE to start to develop courses. In fact, I was involved in writing the first certification courses for the seven categories of SCTE certification, which has evolved beyond what we started.

Schley: Scope and breadth are amazing today. Who was involved with you in setting up these original meetings or this idea to create a training organization?

Kurpinski: It wasn’t my idea for the organization. The SCTE started in 1969.

Schley: So, it existed.

Kurpinski: It existed. It’s just that there weren’t any official chapters. I had moved back from Upstate New York and was living in Pennsylvania again. And I said, “We need a chapter here.” And someone said, “Well, go start one.” So, I said, “OK.”

Schley: Because the organization has depended on its chapters, and they’ve flourished over time, this is like one of the first iterations of that.

Kurpinski: Myself, along with my wife, Mr. Jim Bailey, Mr. Tom Gimble, Mr. Bruce Furman. I got them together and I said, “Look. Someone tasked me with the obligation of starting a chapter. So, you help me.” They said, “Sure. How do we do it?” I said, “Well, I guess we are going to have to figure that out. The first thing we need is money. And we need to set up a meeting.” So, we solicited some of the cable operators in the area to give us some seed money, and we got a room at a big restaurant nearby. Then we—we didn’t have email back then so we kind of like sent letters and talked up, “We’re having a course at this particular location.” Fortunately, it was only two miles from where Jerrold was located. So I had some of the premier engineers from Jerrold as our speakers, talking about design, system design. And that was the first meeting. It was 1982. So, we developed a guide to chapter development. Before Mark Dzuban and Bill Riker, there was a lady who was the executive director of the Society by the name of Judy Baer. Judy said, “This is great. You guys started a chapter, had a few meetings, we want to expand this. So, could you write a guide to chapter development?” And I said, “Well, sure.” She said, “We’re having a reliability engineering conference next week in San Francisco. Could you have it ready by then?”

Schley: Ah, yes. And?

Kurpinski: So, I sort of procrastinated a little bit and I wrote it on the plane on the way to San Francisco. In fact, the original document—

Schley: You probably wrote it longhand, right?

Kurpinski: I did. But then I got to my location and rented an IBM Selectric typewriter. And that document I'm giving to the Cable Center today.

Schley: So that sort of spawned—

Kurpinski: That spawned the chapters.

Schley: The chapter system.

Kurpinski: Of course, you can see from what it was then to what it is today.

Schley: Our audience, I'm sure, is dying to know what this beast is here. [Tapping 704 meter to his right] So let's talk about it. There's a lot of history around this—well, first of all, can you explain what this is?

Kurpinski: This is a Jerrold 704 Field Strength Meter. Or a signal level meter, as some people might want to call it. There was a need to measure signal levels in a cable system. And in the 40s and the early 50s, middle 50s, there really wasn’t an instrument where you could plug in to a cable system like a tap and look at how much signal was coming into the TV set. So, this was designed by Ken Simons, one of the engineers at Jerrold to measure those signal levels. And it was powered by 120 volts, no batteries.

Schley: No battery within this.

Kurpinski: Usually it came with a strap, so the technician could put it over his shoulder.

Schley: This is a heavy, 20, 30 pounds, right?

Kurpinski: 19.

Schley: 19 pounds.

Kurpinski: That’s one of the trivia questions we have at our meeting.

Schley: But you're hauling this thing up the pole.

Kurpinski: The technician had to haul it up to the pole with a long extension cord into his truck which had an inverter. Which took DC and converted it into 120 volts AC to power this. And then he would plug that into the input of an amplifier and see what the signal level was, and adjust it to the proper input and then plug it into the output of the amplifier to see what the proper signal level was. Then he would close it up and—he didn’t have a bucket truck. He'd climb down on spikes and that was it. That was one of the first meters that was developed to measure cable signals.

Schley: This signal meter, the 704, has spawned an interesting, should I call it a professional organization or a semi-professional organization? Talk about “The Loyal Order of the 704.”

Kurpinski: Something near and dear to my heart. The Loyal Order of the 704 is sort of an engineer’s “Loyal Order of the Raccoon,” by Jackie Gleason and Ed Norton. Only we didn’t have the hat that we could wear. Rex Porter and Ted Hartson were someplace at one point in time, and through conversation decided that everyone was receiving awards and accolades in the industry, but the engineers. So, we decided—excuse me, not me, because I was not a charter member initially in 1994. I came in 1998. But they decided we should have some sort of an organization with no rules, or very few rules, that would honor engineering talent in the cable industry. So, the requirements were, back then, you had to be in the engineering portion of the cable operation, technician or engineer. Had to actually use the 704 or tell a good lie about one. Then you answered questions that were proposed by either Rex Porter or Ted Hartson. Then some questions from the audience. And of course, like I said, it was like a Dean Martin-type roast, and just a good time. The first and second meeting went basically like that, but then Rex and Ted decided they needed a mascot. That’s how Pinky the Pink Flamingo came into being.

Schley: Who I will point out is out in the hallway.

Kurpinski: The original Pinky is retired. He was 21 two years ago. Now we use Pinky Jr. at our meetings, so when you are finally inducted, you have to kiss Pinky.

Schley: Of course you do.

Kurpinski: Now it's not mandatory you kiss him in any particular part of his body, so that has created a very amorous Pinky Jr. And we've also raised the bar to 30 years instead of 20.

Schley: So, the restrictions have tightened, basically.

Kurpinski: I think most people that have been 30 years probably have not used one of these. They might have used it as a doorstop, which is a sacrilege and blasphemy. It's just a fun time. We had our last meeting here. We had, I think I counted almost 100 people attending. We have an auction of cable memorabilia.

Schley: Do you know why it was called the 704? What was the nomenclature system at Jerrold?

Kurpinski: That’s one of the questions that I ask.

Schley: Can you divulge?

Kurpinski: I don’t know.

Schley: You don’t know.

Kurpinski: No one knows. Now you can theorize it was introduced on July 4th. There’s 7-04.

Schley: I'm with you. OK.

Kurpinski: Or the final design was in July of what—195-? Nobody knows. Ken Simmons, unfortunately, has passed on, and no one ever asked him the question. Or no one ever asked anyone at Jerrold the question. So that’s—for folks out there that might see this, that might be something they can pursue.

Schley: Unanswerable question. Talking about SCTE and your role in writing the charter plan originally, you’ve continued to be very closely associated with SCTE. Can you talk about your role there over the years?

Kurpinski: After developing a chapter, which became the official first chapter of SCTE and consequently I believe now there are approximately 71 or 72 official chapters. My involvement was with the very first Expo—Cable-Tec Expo in Dallas, the next one in Nashville. So, I was involved in quite a bit of the initial expos, the Expo planning, which grew as the industry grew. I also served on the board of the SCTE board of directors as Director-at-Large and Eastern Region Vice-President. Subsequently I was Member of the Year [1983] and Emeritus Member, and now, Hall of Fame, Circle of Eagles, Senior Member—I think I did the trifecta in SCTE.

Schley: I was mentioning at the outset that your career in building cable systems parallels or tracks with the cable industry’s, obviously its own development into a multi-product, multi-platform delivery vehicle. Where do you see the industry going? What's exciting about the future for cable from the vantage point of someone who’s actually been up on the poles, helping build these distribution networks?

Kurpinski: Obviously it's getting more and more away from RF because if you look at the electronic design of a cable system-- Verizon FIOS touted Fiber-to-the-Home. And cable basically can deliver the same quality picture with what they call a node plus one, a node plus two, which means fiber to electronic device, and then it's converted back to RF.

Schley: Coax takes it from here.

Kurpinski: Coax takes it from there into the home. As the cable industry segments further and further, they're getting to the point where they are just about Fiber-to-the-Home now. They're into live systems now, and passive coax, which means the only time they convert from the fiber is at the tap back into their home. They're almost there, a lot of cable systems. And of course, the bandwidth wars I think are over. Because a lot of systems now are 1 Gig or 1.1 Gigs. Myself, I probably have 300 channels and watch 14. But Internet speeds have gone up, Voice Over IP, telephone. You have triple play services, voice, video, data. Now I believe Comcast Xfinity has just launched their own cellular service. So, cable is going to be a quad play service instead of triple play, but it's going to be more and more heavily dependent on data. I just saw the advertisement right in the hotel last night. Comcast is advertising 1 Gig business service.

Schley: Saw it.

Kurpinski: It’s 1 Gig business service now, it’s going to be approaching 1 Gig residential service and will probably jump to 10 Gigs for business. It’s all data-driven, and I think the next portion of the upgrades and rebuilds in some of the traditional cable systems, some of the ones that still have RF amplifiers, will be to increase the bandwidth on a return path.

Schley: Because we do more two-way—

Kurpinski: As we do more and more two-way—

Schley: Data transmission.

Kurpinski: The future is definitely going to be data.

Schley: As someone who has been involved in helping train a generation of technicians, installers and builders, how does the conversion to a digital template affect the requirements of training? What do you have to know if you're a young person today?

Kurpinski: Probably the people coming out of school right now have the advantage because if you're IT, if you have anything to do with computers or IT, you plug right in. As far as maintaining the plant, those people can't do it. I've spoken to a number of individuals and pointedly asked them how does the Internet and data get from where you send it to the customer? What's the method? And the first thing they say is, “Wireless or fiber.” OK, well, how’s the fiber get delivered? They don’t learn that. But there's a certain group that do know it and as long as we have them, we’re OK.

Schley: I sort of always hesitate to ask this because I don’t want to pin you down or invite you to exclude anyone, but can you name a couple of people who have been really instrumental or influential in your odyssey in cable?

Kurpinski: There’s too many to mention but my first mentor, as I mentioned before, was Len Ecker from Jerrold, John Roskowski from Cable Services. Walt McCleary, who was my regional manager that brought me into sales engineering, initially from Eastern region sales. They're probably the big three. And there have been a number of other individuals along the line because if you looked at my profile, you saw I've been with a lot of companies. But the reason is because, remember back when I started, and everyone else started, Jerrold and the other manufacturers were the training ground for the industry, for the technology. And this is where you learn. Competitors were starting to come into being, and where were they going to get talent? From one of the established companies.

Schley: So, it's almost like a feeding ground…for the industry.

Kurpinski: It was a feeding ground and that’s why a lot of my peers and some of my associates every four or five years, they would be with a different company because you gain knowledge with every company you went with. Plus, you also gain a large Rolodex.

Schley: What has been fun? When you look back on your career in cable—it's a broad one—but beyond the paycheck, what sort of—?

Kurpinski: The people. Your customers were your friends. A lot of my customers in the smaller systems, they were just so grateful to see you because you were their knowledge base. You would travel from system to system and this system would be doing something and you would go to another operator. “What’s so-and-so doing?” “Ah, he just bought this latest state-of-the-art amplifier. You might want to buy some of them.” So, you were basically training your own customers. And you became their friends. And back then there were all-state associations. State associations had their own little meetings. With little displays. And there were hundreds and hundreds of cable operators who would go to these little association meetings. I was very well involved in Pennsylvania, New Jersey, Delaware, Maryland, New York State. They were the main ones I was involved with, but I would go to some customers and, “Where are you staying tonight? No, you're not, you're staying here.” I'd stay in their house, I'd have breakfast with their families and see them off to school. I mean, that’s the relationships. And they were extremely loyal. The customer base of Jerrold—I've never been with a company that had a loyal customer base like that.

Schley: I think, John, where would some of these small guys have been without Jerrold, right? Like you said, it was not just a provider of equipment, but a provider of knowledge.

Kurpinski: Oh, it was.

Schley: Expertise.

Kurpinski: There were other companies. Scientific Atlanta, Magnavox, VIKOA. There were a number of them. And there was a number of them that tried to get into the industry and failed.

Schley: Your story is so interesting about the camaraderie because sometimes those of us who have been in and around the industry for a long time take this for granted, I think. But the unique economic nature of cable where you didn’t have competitors necessarily in every market, made for a degree of collegiality that I think a lot of industries don’t have.

Kurpinski: That’s one thing. Franchise. Your franchising, that’s your particular area. That’s your usual domain. And your next-door neighbor, he could be in another little hamlet and now that’s his domain. So, you didn’t cross that line and he didn’t cross that line. But you're buddies and you could talk. And eventually one wound up buying out the other and consolidation started and here we are today.

Schley: How would your life/career been different if you had pursued the computer arena? Do you ever think about that?

Kurpinski: I do think about it sometimes. But I—

Schley: It’s all conjecture.

Kurpinski: Actually, the cable industry progressed at a faster rate in a certain period of time than the computer industry.

Schley: Fair point. Particularly through the 60s, 70s…

Kurpinski: The computer industry really took off with obviously Microsoft and the PC and Steven Jobs. I worked on mainframe computers that were much larger than this room we’re in right now.

Schley: Tubes.

Kurpinski: Then the first solid-state devices I worked on, the Philco computers. But the IBM 36 was the big mainframe computer of IBM.

Schley: What, John, haven’t we talked about that’s meaningful or resonant in terms of you, sort of maybe the impact you have had, or what you have sort of taken from your time in cable?

Kurpinski: In all my years with SCTE and chapter development and training, that’s hopefully what I’ll be remembered for. Also, at one point in my career, I got designated the Southeast and the Caribbean as my sales engineering territory.

Schley: I’m sorry.

Kurpinski: It was tough. [laughter] My wife would have said the same thing. She had to meet me at some of these islands because I was working hard.

Schley: What was that about? What were you doing?

Kurpinski: We were building cable systems. Puerto Rico and some of the other islands. Cable Bahamas, Aruba.

Schley: And you would decamp and stay there for a period of time?

Kurpinski: For a while. A little segue: the last twenty years of my career before I retired, I would up working for Silicon Valley startups. In optics.

Schley: I saw the list.

Kurpinski: I knew a little bit about optics, but not what I learned while working the past twenty years for a long-haul transport. Metro Ethernet. I mean, just a lot of different things. I worked for a company, Alloptic, and you know what FFTH is, right?

Schley: Fiber-to-the-Home.

Kurpinski: We did FFTS. “Fiber-to-the-Slip.” We built fiber cable in the marina of the Atlantis Hotel and Casino. The reason they wanted to put fiber in is because it's impervious to corrosion. So, we wired up every slip back into the yacht master’s headquarters with EPON.

Schley: It's a pretty rocking network for these guys.

Kurpinski: Right underneath the piers we ran the conduit and then it had a pedestal, which was pressurized by nitrogen. So, when you pulled in with your yacht, there were three different sources of power you plugged in. You plugged in water, sewer, and you plugged in your triple play service. And when you left with your yacht, you got an itemized bill. But ironically, over the past probably fifteen or twenty years, the Caribbean—everyone thinks of the Caribbean as third-world countries—they were actually further ahead in fiber deployment than we were in the United States.

Schley: And in the network architectures and—

Kurpinski: One of the reasons, actually two reasons; the main reason was theft of service, piracy. And digital. They wanted to adapt digital because of theft of service. It was not as easy to steal digital service as it was to steal analog service.

Schley: With analog, you could physically tap into the communicator network…

Kurpinski: Tap into the coax and run a line from your neighbor. But digital converters and fiber were, I think, more advanced in the Caribbean than in some systems in the United States.

Schley: Were you rebuilding systems down there?

Kurpinski: Yes. They were rebuilding from traditional coax. I know Aruba is almost all fiber-to-the-home. I mean, some of the services they have here are just unbelievable. Cable Bahamas is huge into that. Puerto Rico unfortunately was getting there, but we all know what happened with the hurricane.

Schley: Well, if nothing else, we've learned a new acronym: FTTS (Fiber-to-the-Slip). But it's just kind of one inflection point in what's been from my outside perspective, a pretty grand career.

Kurpinski: It has—and Cathy Wilson, the publisher, I met Cathy probably in the late 70s. She won't admit it. But when I was with the SCTE board of directors, we were interviewing for the official magazine of SCTE. And at the time, there was another magazine coming along called Communications Technology, CT, Paul Levine. And Cathy was working for CED at the time. So, we interviewed Paul and then we interviewed Cathy and we had to decide which was going to be the official publication, and unfortunately, she lost out.

Schley: It all worked out in the end.

Kurpinski: It all worked out in the end. Because over the past 20, 21 years, she has been, Broadband Library, the official magazine of SCTE.

Schley: We get to talk to Ms. Wilson later and hopefully you will tune into that interview as well.

Kurpinski: I certainly will. I want to see what she has to say.

Schley: But this has been great, John. Thank you for spending time with us and making the trip.

Kurpinski: Thank you.

Schley: John Kurpinski. And for the Cable Center’s Oral History Series. I'm Stewart Schley.

END OF INTERVIEW

 

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Peter Kiley

Peter Kiley 2017

Interview Date: November 13, 2017
Interview Location:
Interviewer: Stewart Schley
Collection: Cable Center Hauser Oral History Project

Stewart Schley: Good day, greetings, and welcome to The Cable Center's Oral History series. I'm Stewart Schley, for The Cable Center, Denver, Colorado studio. Today I have the privilege of talking to someone whose entire career, really, has been spent in the cable industry, at a very formative time for the industry. Peter Kiley is vice president of affiliate relations and communications for C-SPAN. He's sort of grown up with and helped the industry grow up in a time of enormous tumult, change, and development and growth. So Peter, so happy to have you with us today.

Peter Kiley: Thrilled to be here, thank you, Stewart.

Schley: You know, we were talking off camera, but you've spent literally 31 years, your entire career, with one employer. That doesn't happen anymore. How'd you do it?

Kiley: It's very rare, but I think C-SPAN is a unique place. We joke that it's filled with Eagle Scouts, and people who are president of their senior class in high school. It's interesting that the core leadership group, six vice presidents, the co-CEOs, Brian Lamb, of course, and Bruce Collins, our general counsel, every one of those people now is a 20-plus year C-SPAN employee, and most of them are 30-plus years. All but one, I think, has been here for 30 years. So it, we came in together there, in the early to mid-1980s. Definitely a fledgling network at the time, it was one channel when we all started. House of Representatives, it launched to about three and a half million homes, and by the time I got there in 1986, it was I think about 10 million homes. The cable industry itself, most of the other channels hadn't launched, or were just getting started. C-SPAN I think was the sixth network to launch. So it was a sort of young and committed group of people from a fairly diverse set of backgrounds came in, and working together, and very much under Brian, and we'll talk a little bit about Brian Lamb, but under his direction, started to build this, and build on the idea he had for delivering a product that was completely unique to anything else in the media marketplace. And I guess we were converts to that idea pretty quickly. Growing up in the same media world that he had, we recognized that there was an opportunity to offer the American public something very different than was available. Satellite technology was coming, so many things were happening. So, this small group of people, we sort of very early on, sort of found our niches within the company, and helped build it up that way, and we're still there, fairly passionately working on it all these years later.

Schley: You know, as a kid growing up in Indiana, later as a college student at University of San Diego, my guess is you didn't dream of going to work for something called C-SPAN. But I want to ask you about your introduction to the place, and maybe recount your first experience, or visit, with Brian Lamb?
Kiley: Yes. I remember my first visit with Brian Lamb, as probably most people do very, very well. I did, I grew up in Indiana, and I went to school at the University of San Diego, great place to go to college. And I had a series of very lucky occurrences. And that was, when I was home for Christmas my junior year of college, the mail comes, and in the mail was a flyer, a brochure from my member of Congress, a guy named Elwood H. "Bud" Hillis, from Kokomo, Indiana. And I just happened to pick it up, and was flipping through it, and there was a little box in there, talking about summer internships. And I hadn't thought about going to Washington before, but I was a political science major, and so I applied, and got that internship, and interned in Washington between my junior and senior year of college. And after graduating from college in California, I decided I wanted to -- everyone thought I was going to go to law school, I thought I was going to go to law school, but I wasn't convinced on it. And so, total lucky happenstance, I ran into Bud Hillis, the member of Congress, in my hometown. And he said, "Well you always have a job from me." And I took him up for it. I moved to Washington, and started to work for my member of Congress. It turned out, he didn't so much have a job for me. Right? You know, there was opportunity there, but he, shortly after I arrived in the late summer of 1986, announced that he wasn't going to run again. So there wasn't a lot of action in his office. So, I looked to start networking around Washington. And the fun story is that my father, in Indiana, was a beer distributor. My father was a Notre Dame guy. Brian Lamb's father was also a beer distributor, and a Purdue guy. So on a handful of times throughout when I was a young guy, I would go to Notre Dame/Purdue football games, and I had met Brian's father at these events, and on a handful of occasions. Our fathers were very close rivals and friends. So, I, in my networking around, I called Brian Lamb, I introduced myself, said who my parents were, and he said, "Please come over, I'd love to meet you." And my intention was for him to talk to me, help me get a job somewhere elsewhere on Capitol Hill. I had moved to Washington, of course, to work on the Hill. That was my goal. And I met with him, we talked, we walked around C-SPAN, which was very small, maybe about 50 people at the time, I met Susan Swain, who was also there. They started talking about job opportunities, and I said, "Oh no, no, no, no, I'm really here to work on the Hill." So it was a great meeting, he was very warm to me, and I was instantly struck by the passion that he had for what he was doing, and the intensity of what was happening there. So, even though I didn't go to work for him in that early time, when I first met him, it struck me that here was a guy doing something really, really different.

Schley: Had you known of C-SPAN before this?

Kiley: I did a little bit. Yes, in San Diego, it was the Cox system, as it still is today, and they carried C-SPAN, and I had, being a poli-sci guy, I had watched it, not to a great extent. And when I moved to Washington, it became pretty obvious that a lot of the young staffers all watched C-SPAN, and used C-SPAN. It was still fairly new, but it was a very cool thing that was happening.

Schley: And we all want to earn a paycheck when we're fresh out of college.

Kiley: Yes. (laughter)

Schley: But beyond that, what led you to think this would be an enervating, or intriguing, or interesting opportunity, when you did take it?

Kiley: Yes, they gave me a great opportunity. Susan Swain called, and said they needed help with a project, and would I be interested in coming in at night, and working on a project with them? And I thought, that sounds great. You know, interesting. I liked them, and so I went in at night. Little did I know, the project was, back in those days, every program was logged in like an accountant auditor's book. Graph paper, and lines, and things. And they would write, "House hearing," you know, and what the topics were, and the in time, and the out time, so the length of that event, for interview programs, call-ins, for the hearings, White House press conferences, House, everything that we put our cameras in to cover got logged.

Schley: Yes.

Kiley: And so, they handed me this tremendous pile of accounting notebooks, and asked me to go through them, and catalog it all. Say how many hearings did we cover, of which committees? And how many hours of programming were devoted to the House, to the hearings, to the White House? And then write a press release for it at the end of the year, so I can say that, you know, 800 hours of C-SPAN's, I think it was 4,000 hours of original content, was the House of Representatives, and 1,200 hours was hearings, and that stuff. And so that was my first project. I had a great time doing it, it was kind of miserable work, now that's all automated, of course.

Schley: Oh sure, yes.

Kiley: But it was really fascinating the people I met, that were putting those things together. I had a great time working with Susan doing the press release on it, and this was like, big. And they offered me a position after doing that project, and I accepted.

Schley: Take us back, this was '86 when you began?

Kiley: It was the fall, it was December of '85 when I did that, and January of 1986 when I started officially.

Schley: And quickly then, because it was a small, lean staff, you became immersed in this world of cable television. What did the industry look like then, from the vantage point of a programmer, that like other programmers, was trying to increase its distribution and its influence, ultimately?

Kiley: It was a very different industry. There were probably roughly 30 to 40, 50 channels, if that. There was just one C-SPAN channel, and C-SPAN2, the Senate decided to allow cameras in, in June. June 2nd of 1986 is when the Senate turned their cameras on. And that was part of the reason, I think, that Brian and Susan were looking to increase the staff size. They knew a whole lot of activity was going to be coming in 1986. They sensed that that vote was going to happen, and they had a pretty good idea that it was going to pass. So, the organization was growing, and I think grew from in the mid-fifties to maybe 75 people. So still pretty small. The idea that C-SPAN was going to get a second channel, and seek distribution for it, was a very big deal. Why did you need two channels? That's more bandwidth, that's more channel space that you're going to do. What are the costs associated with that? There's not a huge appetite for affiliates to pay high license fees to anyone, let alone to a nonprofit channel like us. We can talk more about that later. But, you know, to be launching in that time was a real risk, and a real challenge. We strongly insisted that it had to be a second channel. Because if you didn't have two channels, you'd be making an editorial decision each day between the House and the Senate. They're in session at the same time. We thought the beauty of what we do is that gavel-to-gavel coverage of Congress, not some editorial decision about who's doing what, and who's saying what, but let's show it, as they used to say all the time back then, warts and all. We will show Congress in action, or inaction, however you might put it. And so it's critical that we do get a second channel, and of course we cleverly titled it C-SPAN2. (laughter)

Schley: But, you just alluded to this, it was the time when there wasn't unending channel capacity. Your partners, your affiliates, had to make decisions about what to carry, and talk about the business model. C-SPAN wasn't free, you had to have a revenue source, and they paid a licensing fee to you.

Kiley: Yes, I think the, one of the unrecognized brilliant moves of Brian was figuring out, and it was luck, how to pay for a service like C-SPAN. And we can talk about the individuals that supported him, but the idea that an industry would pay for something that didn't make them any money, and didn't secure them good relationships in Washington. I think it helps the industry a great deal, that they have, for so many years, funded and supported, and made something like C-SPAN, the networks possible. But the idea that, you know, we were going to be taking really valuable asset, precious bandwidth, channel capacity, and pump it through to subscribers, without the opportunity for the affiliate to recoup any of those costs by selling advertising, primarily, and it wasn't going to be like a whole lot of people were going to rush out to get cable to buy C-SPAN. There are those, we love those C-SPAN junkies. But those aren't big numbers. So it was a great commitment on behalf of the industry to say, that's the right thing to do, we see this industry growing in lots of different ways, and a lot of them are going to be niche, they're going to maybe serve small audience, but it's going to be an important audience, and I think we can do really great things. Whether it's creating this really terrific new entertainment content, terrific new sports content, this was a way of doing something that was really public service-oriented, and driven by the First Amendment, and people's patriotism, in many cases.

Schley: You did have this luster of the right thing to do around C-SPAN. But in many ways, your charge, and your job, was not that different from an affiliate relations executive at MTV, or Country Music Television, or any of these new channels that were cropping up. You had to sell.

Kiley: You know, we did, we had to sell. There was a critical point in 1989 when most of the carriage C-SPAN was getting, when operators would agree to launch either C-SPAN, or now C-SPAN2, it was being driven by our board of directors. The leaders of the industry sat on C-SPAN's board, they had bought into this idea, they had committed to it, and they were saying to their general managers across the United States, "You got to put this on, I want you to put this on." And that didn't put a very good mindset in a whole lot of general managers when they were being graded and judged on delivering X, and they didn't get us, right? So, Amos Hostetter, the great Amos Hostetter, who was an original C-SPAN board member in 1978, when the board first formed, and actually still serves on our board today, as a senior director, is still a terrific influence, but Amos said to Brian, "You really need to expand your affiliate group." We had one or two people that traveled the country and, you know, we didn't get to many systems, it was to corporate headquarters and things. So we went from two to six people, and regional reps. And we hit the road. (laughter) We hit the road. I was first in the Midwest, and then on the West Coast. And we would go out for a week at a time, put hundreds of miles on a rental car, sit down with three, four, five cable systems a day if we could. And just tell the C-SPAN story. Help them understand why Amos, or whomever their board member was, was supporting it. Why it was an important thing to do. Why it would matter in their community. Explain the business relationship that we had, how the license fee worked, and what it was actually paying for. And I think that did a world of good. There were a lot of them that bought in, and really got it then. And they're people who we're still friends with today. There were a lot that didn't get it, you know?

Schley: Yes, I was going to ask, was there tension in the room? Or were they difficult conversations?

Kiley: Oh, there was a terrific amount of tension in some of those rooms. Because I mean, there still is today, you know, if -- at that point, it wasn't so much, but if you're an operations person today, and you're responsible for profit and loss for a cable system, you read a spreadsheet as a narrative, right? You look at that spreadsheet, and you see a story there that it tells you about what's making money for me, and what's not. What do I need to do to do my job? If you're a senior executive on an operations side, you've got to deliver X revenue increase each year, and do certain things, and now you're managing each bit of bandwidth that's going through, and you're monetizing that, back in the old days. You would look, if I add a channel, how much can I make off of that, and what's the license fee, and what's it going to cost? C-SPAN does not look too good on those charts, right?

Schley: Right. (laughter)

Kiley: We don't have any ratings, there's no viewership numbers, it's not that we were marketing and advertising ourselves much at the time. So it was just a cost to them, and it took bandwidth. So, it was really hard to convince some of these people that yes, on their own, they should agree to launch our channels. Or to just feel better about it, and work with us if they had been forced to.

Schley: From on high.

Kiley: From on high. Yes.

Schley: Talk about some of the major inflection points or the numbers, were there certain subscriber counts that were important to you guys to achieve, and just kind of take us through that. You had the steady upward progression in distribution.

Kiley: We had the steady upward progression to about 50 million was a big number for us. And about, probably 89 or 90 --

Schley: For C-SPAN1?

Kiley: For C-SPAN1 to hit 50 million homes, and we had a big party at one of the NCTA shows to celebrate 50 million with our board of directors, and to really, that was one of the first times that we, in a big way, tried to say thank you to the industry for doing that. You know, and then as you get into the '90s, the growth did two things, really. It really started to explode as the industry started to grow so fast.

Schley: Added subscribers.

Kiley: Added subscribers. And of course, we benefited from the launch of the satellite services. DIRECTV and Dish went up in the mid-'90s, both of them carried C-SPAN and C-SPAN2. So as the industry pretty rapidly grew from that mid-50 million number, all the way up to what we saw a few years ago, a little over 100 million, C-SPAN rode the wave of that. And today, we're the most distributed, C-SPAN is the most widely distributed service.

Schley: You had the headwinds in certain areas, but on the regulatory side, I wanted to ask you about two entrants into your domain, the must-carry laws and regulations, and related to it, retransmission consent.

Kiley: Yes.

Schley: What were they, and how did they affect your business?

Kiley: Well Rob Kennedy and Brian Lamb and I all joked that we had full heads of hair before must carry and retransmission consent.

Schley: Yes.

Kiley: They were very difficult years for C-SPAN as that regulatory regime came into play. So it was the 1992 Cable Act. The Consumer Protection Act, they called it. And it heavily regulated cable in a number of different ways. Most onerous to C-SPAN was must-carry, and retransmission consent. I won't describe them too much, because a lot of the audience can find that elsewhere, or lived through it too. But must-carry said that every broadcast licensee within a television market was granted must-carry rights on the local cable system. And that became, and it was passed in '92, and in June of 1993, I think that became the law of the land. And there were many, many cable systems that simply did not have the capacity, the bandwidth, the channel capacity, to put on the lineup, all those broadcast licenses within the market.

Schley: We were still in an era sometimes of 35 channel cable systems.

Kiley: Oh sure, lots of channels, yes, 35 to 54 channels. And you might have 18 or 20 broadcast licensees in a market, there might be a fourth and fifth PBS network, there were licenses that had been dormant for many, many years, but were suddenly extraordinarily valuable. And so they were bought up by different television groups, and put on. It was a whole lot of repetitive programming, but when push came to shove, and the operators, by the law, had to put those channels on, what was the first thing to go? The nonprofit, non-revenue generating, public service channel. So C-SPAN2, which had launched in '86 and had seen nice growth with the support, that work that we'd all done, being out on the road so hard in the late '80s and early '90s, C-SPAN2 took a lot of hits. And lost several million homes. C-SPAN was cut back to part-time in many, many places, and shared with another channel. We'd be on during the daytime, and someone else on in primetime. You know, about that point, really at that point, most viewership was in primetime. So it hurt us a lot. I think in all, some 12 million subs were impacted, either cut to part-time, or dropped completely. It was very difficult, it was across the industry, it was really hard. And then when you had retransmission consent on the heels of that kicked in, and you had FX, and Fox News, and MSNBC, and CNBC, broadcast groups using retransmission consent, when the industry agreed that they were going to pay them money at the time, but in exchange for giving up cash payment, they would support the launch of a new channel.

Schley: Give them a channel, yes.

Kiley: Give them a channel. And then operators were essentially forced to add those channels widely, that made it, we took a few more hits from those, where we went off the air, or just made it more difficult, because capacity started to expand, for us to get on. It was a brutal period.

Schley: You know, people, I think sometimes --

Kiley: Very stressful.

Schley: -- you weren't just providing a public service. You were running a business. So when you lost carriage, you lost subscribers, you lost revenue.

Kiley: We only lost a little bit of revenue, actually.

Schley: OK.

Kiley: Because the payment for C-SPAN, the way it works for a distributor of C-SPAN, is they pay a license fee to C-SPAN only for C-SPAN. And then there's no extra cost for C-SPAN2, or now C-SPAN3.

Schley: OK.

Kiley: So there's no extra charge for that. So as long as C-SPAN was not dropped completely from the system, they still paid us our license fee for that.

Schley: Smart.

Kiley: The license fee, I think, was about three and a half, four cents at that time.

Schley: Per month, per subscriber?

Kiley: Per month, per subscriber at that time. So even when we were cut back to part-time, they still paid us. And that's why the industry, as tough as -- they didn’t want to be cutting back C-SPAN. These were good people and good friends. They were under incredible pressure, and in nearly every case, they kept at least C-SPAN on part-time, and continued to pay the license fee.

Schley: And while this is going on, you're now running the affiliate group, is that --

Kiley: I was managing that group of people that traveled around the country, and doing corporate relations, yes.

Schley: One of the vehicles for growth, ha-ha, pun intended, was this creation you guys came up with, I don't know how, called the C-SPAN Bus.

Kiley: The C-SPAN Bus, now in its 24th year, it's one of the most fun things that we've done. One of the smartest, in terms of building goodwill and closer relationships with our cable industry partners. It's been a tremendous outreach tool. It started from, there's the historian that you see on TV a lot right now, Doug Brinkley. Doug Brinkley wrote a book called The Magic Bus. And he was a young professor at Hofstra University, and he did a, you know how students might do a semester at sea? He did a semester on a bus, where he traveled the United States, and visited historical sites. If you're talking about Martin Luther King, we’re at the Ebenezer Baptist Church. He went to great places of historical significance. Civil War sites, all this. And he wrote a book about it. And Brian found that book, and interviewed Doug on Book Notes. And everybody loved that. Brian said, "We need a bus. Wouldn't it be great if C-SPAN had a bus, to travel around?" And much, again, to the credit of the board of directors, they said yes, you can get a bus, and then we told them how much it was going to be, and they said we could get three or four Winnebagos and travel around for that. Brian insisted, no, we want something that will really impact people when it shows up. So we bought the biggest, baddest bus we could. It's 45 feet long, we painted it bright yellow, called it the C-SPAN School Bus. If you think back, this is 1992, the fall of 1992. And when you think back, Cable in the Classroom was just getting started. We were looking for ways to expand our programming reach. So to get more content from outside of Washington, D.C. And we really still needed to help the local cable operator get credit for C-SPAN. Right? We had sort of convinced them, "Oh it's a good thing," they were carrying it now, but they didn't feel like they were getting any love for that. So, having this vehicle that could go out on the road served all three purposes. It was big and beautiful, impressive, and high-tech, and it was basically a mobile production vehicle, right? There's a studio on wheels, with a whole demo area up front. So we would pull into a community, always in partnership with the local cable operator, visit a school, bring kids out, they'd be turned onto C-SPAN. We'd sit with teachers, and talk to them about how to use C-SPAN in the classroom, we'd take the cameras off the bus, and visit local sites of historical or literary significance. All the time, talking about this is only available to you thanks to Tom here from TCI Cable --

Schley: Local cable company.

Kiley: -- whatever local cable company you have. And it worked beautifully.

Schley: Yes.

Kiley: We're now on our fourth bus, we're in our 24th year, we, our newest bus just hit the road a few weeks ago, we're on a 50 capitals tour, which is pretty fun. We're going to visit all 50 capitals, including Hawaii and Alaska with it. So the bus has been a tremendous success for us, it has endeared us to citizens all across the United States. You know, we're sort of the non-personality network.

Schley: Yes.

Kiley: That darn bus has a personality.

Schley: It's you, yes.

Kiley: It's awesome. And people know it, and we know now, adults in their twenties and thirties who are C-SPAN viewers, and users, and come to our websites, and use our resources, and they hearken back to, "I remember when you visited my high school."

Schley: Sixth grade, yes, right.

Kiley: Yes. And they go, I remember that day. And you know, if we see 100 kids in a day, there might be 60 that don't ever remember it at all. But there are 40 that do, and there are 10, that say, that was cool, and remember it.

Schley: Yes. Did you hit the road with both production people, and business, affiliate people?

Kiley: We did, yes. It was an affiliate rep doing sort of the PR and marketing, and working with the cable guys. And it was a production person on the bus at all times. Now it's primarily just that affiliate person doing marketing and PR. And occasionally, we'll fly people in to do productions.

Schley: Did you log some miles yourself on the bus?

Kiley: I did, I logged quite a few miles in the early days of the bus, and managed the bus, and its team, it was about 22 people at the time, and we had two buses for I think, four years.

Schley: I'm struck by talking to you, how many people you have sat down and talked with face to face, and just wanted to invite you to riff a little bit about some of the people in this industry you've met who have really sort of stood out, or made an impact, and what you learned from them.

Kiley: Yes. I've been really lucky in that C-SPAN's board of directors, made up of the CEOs of cable companies, to have spent time with a number of them. And they are, you know, a who's who of the icons of the industry at the time I was there. And I learned so much from watching them, and seeing how they did certain things with their people, and their companies. You know, in terms of just influence on my career though, there's a whole slew of other people in the industry, and not sort of those big board member names, you know?

Schley: Yes. Yes.

Kiley: I think, you know, you have to start any list, if you're me or probably any C-SPAN-er would say this, with Brian. Brian Lamb has taught all of us so much. The C-SPAN networks, and the way we operate, the way we do our business day in and day out, is such a reflection of him and his personality. It really is, very much, a culture that is, stems from his persuasion. I've worked all that time with Rob Kennedy and Susan Swain, they've had a huge influence on me, day to day basis, for so long. Bruce Collins is our general counsel, he's been very much a mentor to me from the very earliest days, and a guide. And a great friend, and Bruce and I have negotiated every affiliation agreement that C-SPAN's done in all that time. So we're very close. So inside of C-SPAN, those people have been terrific. Outsiders, there's a number of people. I think, you know, Lynn Yaeger and Bonnie Hathaway at Time Warner taught me so much about public affairs, and how if we were going to be doing community events and public relations, they had to serve a business or government relations objective, and you know, we would come in with these great ideas, and sometimes twist them to serve an objective, or we would go and learn what their objectives were, and create something off of that. They were just amazing guides, and stewards to having C-SPAN build public affairs programs that would be successful in partnership with cable operators. You know, Rob Stoddard has been a friend for all the years, and I still interact with Rob a great deal, and our neighbor in Washington, and NCTA is just around the corner from us. And I learned from Rob in almost every interaction that I might have with him. Ellen East taught me so much about PR, and about team building, and building loyal teams. Ellen's a terrific leader of people, and so staunchly stood up for what she thought was right, and really helped me with that a lot.

Schley: Yes.

Kiley: I met David Krone when he was at TCI, first doing political stuff for them during those must-carry days, when we were losing so many subs, and David had a huge influence on the industry, and he's a name that probably a lot of people don't even know, right?

Schley: Right.

Kiley: He's an incredibly quiet and private guy who wielded terrific influence and power in the industry, first at TCI, and then with Leo Hindery, and then as the number two at NCTA, he worked for Comcast for a time. And he ended up being Senator Harry Reid's chief of staff. And David's just, he wields power in such a quiet way, and I always admired and respected the way he kept himself out of that. I got a look at people like, you know, Char Beales and Anne Cowan. If Char taught you anything, it's how to network. CTAM. I loved the passion that she brought to whatever room she was in, to meet people, to know people, to find out what made them tick, and to make them move, and in terms of just intellect, and seeing how people could manage this broad portfolio of activities and things, but still, always have time to focus on me, or on C-SPAN. There are two people at Comcast that always just overwhelmed me with their capability to do that, is Joe Waz, who was there forever and did government affairs, and now is back consulting with them. And the guy that replaced him in a certain part of the business named Bret Perkins. And they're just the two smartest people I know. And they have such broad portfolios, but have always given me time if I've called and said, I need to talk something through, or I need some help with your company, or help in the industry. Great minds for that. So I've been really lucky, those people, they've all been great leaders, not maybe at the top of the company, the way our boards are, but huge influences, I think, throughout the industry, and certainly helped me a lot. There's a lot more too, Chris LaPlaca at ESPN is their SVP of PR and communications, and the way he deals with people, the way he deals with some great situations right now that are challenging.
I watch what he does a lot, and learn from him. He's a real pro, and he's just another one of those great people, the kind of people you want to surround yourself with.

Schley: A lot, Peter, of the names you're reciting, are people I know as a journalist from the industry, and covering the industry. And one dimension of your career that I wanted to bring forth is that you've always been active in helping the communicator side of the business. You've been president of Association of Cable Communicators, and/or CTPAA, both collectives of public relations professionals. Why has helping to sort of tell the cable industry story been important to you?

Kiley: I think it's a great story. The cable industry has a great story to tell. And I think the more I can help them tell C-SPAN's story, the better it is for C-SPAN, right? And I think that C-SPAN's story is so good that it will really help the cable industry shine. And this is truly incredible. What they've done to deliver this to so many homes, and for so many people, and for so much content, for so long. And I think in many cases, the way that got started was, as I was the affiliate sales guy, not a communicator at that time, I was affiliate sales, but I would, in working with big MSOs, the marketing people weren't always all that interested in C-SPAN. We weren't doing acquisition campaigns, we weren't supporting their efforts in quite the same way other programmers were, right? The programming people, who I would go and negotiate an affiliation agreement with, we were an easy deal. Not a huge dollar deal, it's very straightforward, we were not tough negotiators, you know, we would go in and essentially, everybody gets the same deal. So we'd get there pretty quickly, and on very friendly terms. So I was looking within these companies, who could be my advocate? Who could be there to talk about C-SPAN, and talk about the good things that C-SPAN was doing with the bus, with C-SPAN Classroom, these other initiatives that we would do, and these partnerships in the community. And I found the PR, and government relations people, the communications staff, they were kin to my spirit, right?

Schley: It was your sweet spot, yes.

Kiley: They -- yes! They got that. And so, when those meetings were taking place about what channel might be cut, or what channels are we going to add, or what channels should we now put on in HD, I would ask those leaders, many of whom I just mentioned, to be my advocate in that room. And even if they couldn't advocate for us, let me know when those discussions are taking place within your company, let me know who the key decision makers are. If you can just send me in their direction, give me a little nudge to say, you should really be talking to this guy right now, because we're about to launch a whole slew of channels on things, it's hugely beneficial. And them advocating for us, them steering us in the right direction, them being sort of an intelligence officer within their companies, to support us, incredibly valued and appreciated.

Schley: I want to talk about a big subject that confronted your life and C-SPAN's progression was this thing called the internet, and its ability, ultimately, to distribute video of pretty high fidelity. Can you just talk, before we lose you, about how internet video and streaming changed the equation for C-SPAN, and how you guys ended up sort of grappling with this beast?

Kiley: It has been something to grapple with. It's a, it is the ultimate luxury, and beneficiary, for someone who produces so much content that we own the rights to. It's also a terrific business challenge, because so much of the content is on the internet, and essentially available at no cost to anyone. So, why does a cable operator continue to say, I want these television channels, and fund it? It's a great, great question for us. We, C-SPAN, since the earliest days, started to stream video on the internet. And initially, the affiliates loved that, because they wanted to start to sell broadband, they wanted to sell high-speed connections to customers. And the smart ones saw right away that video was a great way to do that, you know? Mail was one thing, and beginning of websites was one thing, but being able to show video, and showing people how quickly and easily they could watch video was great. So, C-SPAN actually was sort of in the forefront of putting a lot of video out there, and cable broadband sales people would use C-SPAN as an example and say look at this, wouldn't you like to have something like this in your home?

Schley: Yes.

Kiley: C-SPAN has, initially through Purdue University, an archives, and we broke off from them, since 1987, has recorded, first on VHS tapes, every minute of the coverage that we've done. It's now 235,000 hours of content, tens of thousands of individuals, and it's all digitized now, and sits on servers and in the cloud, in an archive of all that content. So, anyone that's ever appeared on C-SPAN has their own biography page, and any event we've covered, from Supreme Court confirmation hearings, through political debates, to conventions, all the political campaigns --

Schley: Searchable?

Kiley: -- all the hearings, all of that is available online. All of it keyword searchable. We take the closed captioning to create sort of a transcript to each of these things. And so, you can type in a date, you can type in a month, you can type in a person, you can type in a topic, and narrow down and find right when Judge Bork said something interesting, or that you're looking for. So if a teacher in a classroom says, "Do you think the next Supreme Court Justice is going to get Borked?" And the kids all go, you know, what's a Bork? Boom, within a few minutes, a teacher could be showing them video of Judge Bork at those hearings. It's a great, great tool and resource. There's great stories about what historians, teachers, junior levels and up through college, and in grad school, are doing with these archives to help put perspective to today's things. There’s great stories about what journalists are doing to say, Senator McCain, what did you say yesterday, versus what did you say in the '80s and '90s?

Schley: It's there.

Kiley: Right. It's all right there. And it's used for a myriad of reasons. So we're incredibly proud of that. And I think in the long run, that archives, and its existence, and its continuation going forward, might be the most important, or most valuable thing C-SPAN has. Right now, it's a difficult business challenge, because it's beautifully available on the web. So to balance the business of C-SPAN, us being paid that license fee from affiliates, what we did, about four years ago now, is we authenticated, or made for sign-in only, reserved for customers of our affiliates, access to the live streams of the channels.

Schley: You have to be --

Kiley: You have to be a cable or satellite subscriber to a video package with C-SPAN on it to get access to watch the live channels on television.

Schley: OK.

Kiley: Or on the web. That was fine, and that's very important for our business. But as a public service, what if we put Congress behind a paywall? What if we put those hearings and things the president is doing, behind that paywall? How would that be perceived? And would that really be the right thing for white hat, nonprofit C-SPAN, to do?

Schley: Right.

Kiley: So the board, I think, in a, just an incredible bit of wisdom and generosity, and smart political sense, said, you're right C-SPAN, you can take this dual route where you authenticate the live streams of the channels, so if you want to watch anything that C-SPAN's producing, our coverage of a nongovernment event, the interview programs, the history programs, the book programs with authors, all that, if you want to watch that live, you've got to sign in as a subscriber. But the public affairs things, the coverage of the Congress, the House and the Senate, all the hearings that we do, anything the President's doing, that remains free and in the clear to any comer on our website.

Schley: OK.

Kiley: As, essentially, a gift of our distributors to democracy. You know? It might sound silly, but think about it, that's really what we believe it is.

Schley: You know, I don't think it's widely appreciated how you were on really the early cusp of internet video, predating I think the involvement of a lot of other commercially supported channels.

Kiley: We were very early, yes.

Schley: And that's been, I think, when you look at your career, and your path, sort of true all the way along. C-SPAN has been this sort of beacon that's kind of, if not led, been part of the seminal evolution, right, of the industry, in the modern era.

Kiley: I think, I mean there was just a few channels up, I think C-SPAN was the fifth or sixth channel to go up. So there was no ESPN, there was no CNN, there was none of those other early channels. MTV, all of those came later. So just having a relatively niche-oriented focused network was something very, very different. The idea of doing things like taking viewer calls, the idea of putting our camera in a lot of places that no one ever assumed there should be a camera, from different think tank discussions, or in a radio host's studio. We put Larry King on television in 1980, doing his late night Mutual radio programs. Then, you know, developing -- C-SPAN's certainly not known for its fancy spinning screens and things, all that, so we really haven't innovated in those ways. But C-SPAN's been very innovative in the use of technology over time that the rest of the television news business has followed. Particularly in covering the kinds of events we do. It used to be, with our crews, you would send four, five, six man crews into the field. You know, and there would be several people that would run camera, there'd be a director, there'd be a couple people doing audio, and one person would be in charge of all the lights, and it was a big setup. Now, on the Hill, most of the rooms have original lights, most of them are wired, so it's just a plug in for the sound, and the microphones and all. And we introduced a whole lot of robotic cameras there. So, you'll see down in front of the dais, a robotic camera that's aimed straight up at the person testifying.

Schley: Yes, yes.

Kiley: I mean, if you think back to the '80s, to hearings, Clarence Thomas is the classic example, the camera's off to the side and you're looking at him from the side.

Schley: That's the angle.

Kiley: That's different, right? What perception is that giving the viewer when you're looking at someone from the side, instead of straight on? So we put the camera down low, right up front, with a straight head and shoulders shot of the person testifying, there's a manned camera in the back of the hearing room, looking straight at the chairman, up on the dais, and then a camera off to the side that can get straight shots of each of the other people on the dais. So, what that did, instead of taking great big expensive cameras, three or four of them, into a hearing room, we got much smaller, much less expensive cameras.

Schley: Yes.

Kiley: So you keep the same amount of people, but you're able to go cover so many more events. Because this is far less -- it's unobtrusive, it's easy, people forget the cameras are even there. And we're able, with now two people on a field crew, or three, to produce that event where it used to take five or six. Enabled us to really expand the amount of content we were able to get. It was pretty innovative at the time.

Schley: It is. And I think it's a telling anecdote for the nimbleness you guys have always had to kind of bring to bear, because you, you know, it's not like you have an unending budget to work with, right?

Kiley: We do not. We grew from that 50 or 60 C-SPAN staffers, to about 270 today. And we've been there for about a decade. We've kept it very tight on that. And resources are incredibly tight for us.

Schley: Yes.

Kiley: You know, we are, I like to say, very small c, conservatively managed. Rob Kennedy is sort of the financial steward of the network, and he's a University of Illinois engineer, and a University of Chicago MBA, and he brings great discipline and efficiencies to the way we operate throughout, from our insurance, and health plans, and our real estate stuff that we have, and equipment, and the people. We've been very, very strict on not growing too fast, and too large with the number of people. And that brings all sorts of challenges, but as I say, now so many of us have been there over 30 years, and so many of the field crew guys, and women, are 20 and 30-year people, we've stayed because we believe in that mission.

Schley: Right.

Kiley: It's been really cool in that we've been able to do so many different things, and grow our own careers, even within one network. By having to do so many different things in the day, you know, there's no crew chief that doesn't still -- they don't mind laying the gaffers tape over the wires, right?

Schley: Right.

Kiley: Everyone's willing to pitch in and do these things together, in this mission-oriented cause. And it means we've all been learning, right? We've all been having to adapt to new equipment. We all have to find ways of doing the things we might see other networks doing, with all of their bells and whistles. We have to figure out how to do some of those things on our own. It may take us a little bit longer to get there. We were slower to get to HD, it was a huge expense rolling that out to affiliates. But when we got there, our quality, the look of our product, is as good as anyone's, you know? And so, it's an interesting place to constantly be squeezed, but being squeezed forces you to find efficiencies, and gives you all kinds of opportunities to be innovative and creative, and do things differently.

Schley: And do you guys get a chance to take the proverbial retreat, and kind of contemplate what's next, or theorize about the future, and how do you deal with this change in environment?

Kiley: Not too much. There are no sort of corporate retreats where we fly off to.

Schley: It would be very un-C-SPAN-like.

Kiley: Yes, it really would. We, not in every weekly meeting that we have is either like, with my different groups, or as I meet with Rob and Susan, or see Brian, do we talk about long-term stuff, but we do it fairly regularly. I think we all feel like we could do it more. Just last week, we have a digital strategy group that is Rob Kennedy, Susan Swain, myself, Brian sits on it, and Bruce Collins, our attorney, sits on it.

Schley: Fun. Right.

Kiley: And then our head of digital media, a guy named Richard Weinstein, who's another longtime C-SPAN-er, came up through the field, and now operates all of our website and digital properties, he sits in on it. We have a guy that used to have that job named Barkley Kern, who's still with us as a consultant, and so we sat down and sort of said, you know, five and eight years from now, where are we going to be? How are we going to be, you know, where is, to me, where are the cable bundles going to go? What's happening with bundling and skinny packages, and where, you know, what's C-SPAN's subscriber pattern look like? How are you hanging on versus the others? And that's our revenue model, it is based on that. So where are we with that? How do we balance that with consumers' demands that we have a Roku channel, or that we have a channel on Apple TV? How much content should we make available on YouTube and Facebook Live, and all these other platforms that are really important for us? Balancing with that. And where are we on those today? What's our strategy? And what's our strategy, is it leading us to where we need to be? So, we do have those discussions. I don't think you could ever have them enough, at this time of change in the industry. But certainly we do them.

Schley: Well over the run, over the 30-plus years, you've really seen nothing but change. I mean and sometimes it's been sort of maybe visible in the distance, and other times, utterly unpredictable, so this is nothing new in a certain respect, right?

Kiley: It is nothing new. And that's, you know, I remain very optimistic for this industry, for the programming, content side of this industry, and for C-SPAN. I think that technology, and the pressures that's coming on, and this sort of rampant growth of different distribution means, and the way younger people are looking for content in different ways, I have every confidence that C-SPAN will find its way in that world. It's going to have to be different.

Schley: Yes.

Kiley: I mean the glory of what we do, of just presenting things as they are, here it is, eight hours of tax markup, and the Senate finance committee, you know, we're doing that today, it -- that's not for everybody. That we continue to do that, and provide that, and have that in that archives, and show that, is critically important to our mission. I think that we will always do that. But finding ways to share through VOD with our affiliates, a collection of here's the important moments of that day, and a sort of almost long-form way, maybe it's 4 minutes, or 10 or 12 minutes of the key 3 or 4 minute segments of that hearing. We're doing some of this today, and sharing it on Twitter, sharing it on Facebook, and letting an audience then engage with those moments, we'll find ways of serving an audience with those clips, always. Always with a link back to watch the whole thing.

Schley: Yes.

Kiley: And never, ever with us telling you this was the most important. This is why it's important. Not getting our spin on it. But, this is what's making news. This is what's going to be in the headlines tomorrow, here's the 4, 10, 12 minutes from the hearing that are the meat of what's making news. You can find it there, if you want more, we have it all.

Schley: Pursuing new avenues about retaining what you called, I loved the word the glory of C-SPAN, and abiding by a mission that is now close to 40 years long. It's a really appropriate end note, and I want to thank you Peter, for not only walking down Memory Lane, but offering some insight into where the industry is headed. Really a great conversation.

Kiley: Thank you Stewart.

Schley: Peter Kiley of C-SPAN has helped this network grow almost since its inception. Our pleasure to have you, and for The Cable Center, I'm Stewart Schley.

END OF INTERVIEW

 

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Rob Kennedy

rob kennedy cspan 2017

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

SETH ARENSTEIN:    Hi, I’m Seth Arenstein here for the Hauser Oral History Project, for The Cable Center.  We’re here in New York City at the end of November 2016 and I’m joined by the co-CEO of C-SPAN, Rob Kennedy.  Welcome.    

ROB KENNEDY:    Thank you, Seth.

SA:    Good to see you.  (laughs)

RK:    (laughs) Good to see you.  Great seeing you.

SA:    (laughs) So Rob, tell me, where were you born?  I’ll do some Brian Lamb on you here.  (laughter) Where were you born and where were you educated, Rob?

RK:    And what did my parents do, right?  (laughter) That’s a classic Brian question.

SA:    That is.

RK:    I was born in Springfield, Illinois.  Was raised there, went to high school there, Springfield High School, and then went to the University of Illinois.

SA:    And you majored in?

RK:    Electrical engineering.

SA:    Really?

RK:    Yeah.  I was kind of a math and science kid in high school and my mom went to the University of Illinois, so it was natural after going to all those football games as a high-schooler, to go to Champaign, and electrical engineering was just a natural for me.

SA:    But then your graduate work was in business.

RK:    That’s right.  I noticed toward the end of my time in engineering that I wasn’t quite as into the circuits as a lot of my colleagues were and I’d been working summers at various businesses and had gotten more interested in the business side of things.  So after I graduated I spent a short nine months working and then went on to Chicago to get my MBA.

SA:    And your first job after Chicago, your first job with an MBA, where was it?  What did you do?

RK:    Well, in between the two years of Chicago, I interned at a company called Centel Corporation, which was just getting into the cable business.  This was 1979.  I really enjoyed my work there with them that summer and then when it came time to graduate from Chicago, they called me back and offered me a fulltime job.  So it was really one of those times when an internship made all the difference.

SA:    And that was in Aurora, wasn’t it?  Or it covered Aurora.

RK:    It did cover Aurora.  I was at Centel for about four years and various jobs, first was corporate staff, but then they sent me out to manage cable systems in the Fox River Valley, first Elgin and then Aurora.  These were systems that Centel had just purchased, so they were just bringing them into the fold.  Centel was a phone company and they were deregulating and getting into deregulated businesses, so that’s where their cable systems came from.  But we know why Aurora is famous, don’t we?

SA:    Yes, well, weren’t you responsible for bringing Garth and Wayne onto television?

RK:    I can’t take credit for that.

SA:    No you can’t, all right.  

RK:    But I kind of remember their house, what it looked like back then, but yes, Wayne’s World, or maybe we’re dating ourselves.

SA:    I think so.

RK:    But Wayne’s World was set in Aurora, Illinois, according to the writers at Saturday Night Live.

SA:    And it was local access television.

RK:    It was local access television.

SA:    There we go.

RK:    And they did the Chicago suburbs really well, so.

SA:    And that’s how you got into music, too, right?  Didn’t you?  No.  

RK:    Yeah.  (laughs)

SA:    No, because Rob, for those of you who don’t know, Rob is a very accomplished pianist, keyboardist and likes all kinds of different music and I know you play in a, what it says in the notes is a garage band.  So does that mean you can only play in garages?

RK:    I think the notes said “basement band” and I wondered what that meant, but yeah, basement band, garage band, cover band, just rock & roll bands.

SA:    But you like classical music, too, I know that.

RK:    All types of music.  Yeah.

SA:    Okay.  And where did you learn to play piano and keyboards and when?

RK:    When I was seven I had a babysitter who sat down and played “House of the Rising Sun” on the piano and I thought that was the coolest thing ever.  So I started taking lessons.  Always pop lessons and my mom then set me up with a classical teacher and he knew I was into pop, and rock, and jazz, so he gave me all this really weird 20th century stuff and my mom said, “Can’t you learn some Chopin?  That’s why I’m paying for these lessons,” so I learned one Chopin piece and I’ve always played classical throughout the years. It’s been with me.  It’s been fun.

SA:    All right.  So now the elephant in the room, we’re talking about music, we’re talking about classical music, we’re talking about C-SPAN, did you have any role in the selection of the music that they sometimes play on C-SPAN on the shows?  I know they played Maurice André or they used to all the time.

RK:    Do you know, I do.  Yes.  (laughs) Yes --

SA:    You do have -- you did?  I didn’t know that.

RK:    See, this is a little known fact.  A few years ago, well, let me back up and set that up.  There are times during the coverage of the House and the Senate when there’s really no audio, or just ambient audio and we learned early on at C-SPAN that if we didn’t want people thinking their televisions were broke or calling in and saying “where’s my audio?”  we needed to put something on during these pauses.  It’s votes in the House and it’s Quorum Calls in the Senate, which is basically a pause.  And we developed the idea of using classical music because we wanted to be neutral, so you can’t put a song on with lyrics, you can’t put popular music on.  The great masters are perfect music for these pauses and we developed a playlist over the years, people just bringing in CDs basically from home, and a few years ago my colleague Susan Swain said, “You’re into classical music.  We need fresher music, so will you really spend some time on this?” and I did.  I don’t pick what gets played at any particular time; we just have a selection of maybe 60 files and the operator in the control room decides which one to pull up.  

SA:    See, that is a major question I always have.  But let’s get back (laughs) to your oral history.

RK:    No Mahler, though.

SA:    No Mahler.

RK:    It’s a little dramatic.  

SA:    Yeah, that’s true.  No, it’s interesting that you say no Mahler because, you know, that really displeases me but, but no, on a serious note, I remember talking I think with Peter Kiley, who was a lifer at C-SPAN and I want to get to the lifers, by the way, too.  I think that’s very important to talk about with C-SPAN.  But I remember Peter saying, I think maybe I asked him a question about, do you get more, do you get complaints in terms of being neutral?  And he said, “Seth, we get complaints from the Right, we get complaints from the Left and you know, that’s just part of the game.” What’s the philosophy?  Is it when you’re getting complaints from both sides, you’re pretty balanced?

RK:    Well, when we get complaints from both sides we know we are balanced, we’re staying balanced.  C-SPAN’s always been dedicated to showing both sides, carrying the House of Representatives or the Senate whenever they’re in session, entire congressional committees, not just the majority or the minority.  So that balance is very much in our DNA. 

And back to the music, you can make errors with music, believe it or not, during quorum calls.  We had in our playlist Beethoven’s Seventh Symphony; the second movement is a famous funeral march.  You can’t play a funeral march when there’s a vote on the Senate floor, because somebody thinks you’re saying that’s going down.  So even things as small as music we pay a lot of attention to.

SA:    And do you get comments and letters about the music?

RK:    Believe it or not, yes.  That’s what -- one of the things of many that Twitter has been good for, is we can see in real time what people are saying, not just about the music, but about our programming and we look at those Tweets and if we make a mistake or need to make a correction, we’ll follow through.  

SA:    So again, let’s get back to your oral history.

RK:    No more music.

SA:    There’s so much interesting trivia about C-SPAN and it’s good to talk about it, but let’s get back.  In the materials I noticed that you helped craft the, sort of the mission statement or the strategic plan, if you will, for C-SPAN.

RK:    It was in the early ’80s and I was working at Centel.  My boss at the time, the head of the cable division at Centel was named Jack Frazee and if you’ve ever met Jack, he’s the guy who’s just full of personality, very lively, very encouraging, enthusiastic.  Jack was on the C-SPAN board.  The C-SPAN board is composed of CEOs of cable companies; that’s the way it’s always been, even dating back to 1980 and Jack on the board felt that it was really important for C-SPAN to have a sound financial structure.  C-SPAN started in ’79 with a very modest license fee and essentially donations of seed money from cable companies.  And Jack and the other board members at the time wanted to look at how the license fee could grow, how carriage could grow, and how that money could support C-SPAN covering the ’84 conventions -- the ’84 campaign, for example.

So Jack, who was always big about throwing people, his staff, into unusual situations and seeing how they performed, including managing cable systems at a very young age, he had me meet with Brian Lamb in Chicago and then lent me to C-SPAN to come to Washington to meet Brian and other early staff members including  Susan Swain, (we’ll talk about Susan), Bruce Collins, Brian Lockman, and Jana Fay and help write a five-year plan that took C-SPAN from about 1980 to 1985 and that was really my first exposure to C-SPAN and to the staff.

SA:    And what was it like when you walked in the door?  Can you recreate what C-SPAN was like in terms of number of employees?  Carriage?  What was on its air?

RK:    This would have been the fall of 1983 and C-SPAN was located then, as it is now, at 400 North Capitol Street in Washington, but it was a much smaller office.  I think there were maybe around two-dozen employees.  C-SPAN had recently gone to 24 hours.  There was only one network at the time.

SA:    There was only C-SPAN.

RK:    There was only C-SPAN.  It was the Congress, whenever it was in session, the committees, House of Representatives when it was in session.  The Senate had not gone on television yet.  Congressional committees, a lot of viewer call-in programs, morning, mid-day and night.  A lot of the staff doubled as moderators for our call-in programs.  Yes, Susan did it, Bruce did it, obviously Brian did it and it was, I don’t know the exact carriage number then, but I’m guessing maybe in the low double digits of carriage and C-SPAN, the story is that C-SPAN started on a shoestring, so much so that people used to bring extension cords from home if they were needed in the office.  I don’t remember seeing any extension cords, but it was definitely a bare bones operation.  

But the thing that I noticed was how dedicated they all were to the mission.  Brian did an excellent job in selecting people early on who wanted to work at C-SPAN for the right reasons.  They didn’t want to be in sports, they didn’t want to be in spot news, but they were very dedicated to the mission of public affairs television and they welcomed me.  I really appreciated that because here’s this guy coming from a board member company and they welcomed me, opened up the books and we sat down and drafted up this plan, which I still have a copy of on my shelf.      
     
SA:    Wow.  And did you know Brian Lamb before that or?

RK:    I hadn’t met Brian, except when he came through Chicago and Jack invited him to our Centel offices.  This was a little earlier in ’83, I think, and Jack introduced me to him and Brian described the mission of C-SPAN and I kind of got it.  I came to appreciate it more; we’ll probably talk about that.  But Brian was a great salesperson for the concept then and he knew he needed the industry support, so he spent a lot of time with the early board members.

SA:    You know, one thing I didn’t ask you about walking in the door that first day; what was Rob Kennedy feeling?  Were you sure that this was going to work?  Were you sure this was a good move for your career?  Or were you saying, hmm, I don’t know that much about C-SPAN.  I wonder if Jack Frazee is throwing me into the water and I won’t be able to swim in it.  What did you think?

RK:    Well, it was -- I guess -- I’ve never been asked that question.  I had become sort of a business planner in my early days at Centel.  I’d worked on the Mergers and Acquisition staff, so I was kind of a spreadsheet guy, although back then we did them by hand.  And so for me I think it was initially an intellectual challenge for the business plan.  This was new.  This was a programmer.  I’d never seen a revenue stream based on license fees.  We didn’t have production facilities at Centel, so that kind of forecasting was new to me, so I guess it started as an intellectual challenge.  The emotional connection would come later.

SA:    Did you know Susan at that point, Susan Swain?  Had you met her before?

RK:    This is the first time I had met any of the staff people, yes.

SA:    Wow.  Had you watched C-SPAN before you even got there?

RK:    I had.  C-SPAN went through some trying times leading up to 1983.  A lot of it had to do with the satellite transponder that C-SPAN was on.  C-SPAN started on a part time transponder, shared with Madison Square Garden.  C-SPAN eventually moved to a fulltime transponder, but in doing that, they moved to a different location in the sky and cable operators had to either reorient their dish or buy another receiver.  Brian and the early staff, and this is in the ’81-’82 time frame, knew that they could lose a lot of subscribers if the cable operators didn’t move the dish and make room for C-SPAN as it went fulltime.  

So Brian and a few board members went on air and did a 24-hour -- I would call it a telethon.  He did take phone calls, but he was explaining this whole move and what cable operators had to do to carry C-SPAN.  And if you’re a cable operator and he’s saying to your viewers, “If your cable operator hasn’t said they’re going to keep us on, call them,” well, I’m sitting out in Aurora as a general manager of a cable system and I’m thinking, what is this?  There’s a guy telling my customers to call me.  I don’t know if we’re going to carry C-SPAN or move it to its fulltime place.

It was -- Brian and I have joked about this over the years--  It’s not a great first impression.  I completely understand it and support it now, but that sort of direct communication to customers that early in the cable industry was nothing if not unusual.  I’m not sure if it had ever been done before.  I saw him as sort of a tough character and then when we met in the conference room in Chicago I thought, oh, I can probably work with this guy.  He’s from Indiana, that’s good.  State next door.

SA:    Right.  Today we take C-SPAN for granted in that if we want to know what’s going on in the House or the Senate, we put on C-SPAN 1, C-SPAN 2.  But I can remember when Senate coverage began and that was a little controversial.  Can you tell us about House coverage?  Was that an automatic thing?  Or were there hurdles there, too?    

RK:    Oh, there were hurdles in both bodies.  The House had experimented before 1979 with cameras and there were members in the House who were very interested in cameras.  One of the main concerns was, will anybody see it?  Another concern was, will television networks edit this and embarrass us?  It’s the old issue -- what if you just take a clip and don’t get the entire context.  So while the House was debating this, Brian, who had worked in the cable industry for several years with a trade publication and had made contacts within the industry, Brian had the idea to kind of marry the industry’s need for programming with the House’s desire for their feed to go out on a full-time basis.  So he worked with both sides.  He said to the cable industry, “Hey, we can do this as public service; this would be really good programming.” Now the House decides, I think we can do this in a way that satisfies your concerns.  Now the House still controls the cameras, so while some of their concerns were addressed, they kept other items close to the vest, but it really was Brian bringing those two things together, in addition to satellite technology, which was new at the time, that got C-SPAN launched and we were the sixth cable network to launch.  It’s a trivia that surprises many people.

SA:    And it’s the House Majority that controls the cameras.  Is that right?

RK:    Right.  The Majority controls the cameras and they have been responsible over the years for those incidents where something happens with the cameras.

SA:    Yes.  We saw one relatively recently.

RK:    That’s right.

SA:    And you all improvised pretty well.  You picked up somebody’s Periscope feed eventually and that was fabulous.  So okay, I guess the other thing coming off of that, coming off hurdles and I’m sure Brian would love us to talk about it is, and you know where I’m going, the Supreme Court.  Will we ever have C-SPAN cameras in the Supreme Court?

RK:    I think it’s a long shot in the next several years.

SA:    Really?  Huh, wow.

RK:    Yes.  As we understand it, it must be unanimous among the justices.  And even though many justices during their nomination process say, I’ve had a good experience with cameras, I think we can do that in Supreme Court, once they get on the Court there’s some sort of force, (laughs) I guess, that we never hear more about cameras in the Court.  I’ve read all their arguments.  I don’t buy them.  I think that if we as citizens can go sit in the Supreme Court, which I think everyone should do if they get a chance and listen to an argument, I think it should be available on television.  In fairness to the Court, they now release audio of the oral arguments the same week, later in the week.  So we’re getting access we’ve never had before and we put that audio on C-SPAN, but with stills, with the pictures of the justices or the attorneys.

SA:    Right.  Thinking beyond the Supreme Court, are there other places in politics, in economics, that you would like to put your cameras?  I’m thinking maybe, I don’t know, does the Federal Reserve Committees; do they have cameras in those meetings?  I would think not.

RK:    They do not.  

SA:    They do not.  Is that something on the agenda?

RK:    Well, there are press briefings afterwards, they are on the agenda and on camera and there are some committees in Congress that cameras aren’t allowed in, intelligence committees and --

SA:    Oh well, that’s fair enough.

RK:    I would think occasionally there are closed hearings for various reasons.  But especially with the use of technology, we’ve been able to get access in many, many places around Washington and for that matter, on the road, with small, portable cameras or wireless cameras.  We can get up close to candidates on the trail and so I think overall our access is good, not only based on the institutions, but also based on the technology.

SA:    Now, what about the philosophy at C-SPAN?  There must be tremendous pressure to once in a while edit something.  Hey, we just -- well, I could just see some pressures to edit something down.  I know that’s anathema to your philosophy, but how do you keep that philosophy, which in many ways people would say is sort of -- terribly against the grain of modern press.  How do you keep that philosophy vibrant in the halls of C-SPAN?

RK:    It’s the core to what we do is we want to be the primary source for these events.  We want them to be available in their entirety.  Now, times have changed and I think our attention spans are shorter, so we’ve certainly adapted over the years, in a couple of ways.  One is our video library, which is online, everything we’ve aired since 1987.  Those events can be streamed in their entirety or you can make your own clip, share it on your social media platforms and get a discussion started around it.  But when you see that video of C-SPAN you know that the whole thing --

SA:    Is available.

RK:    Was on our air and is available in the video library.  And yes, sometimes we take clips to illustrate a point, maybe during a call-in program or in one of our radio programs.

SA:    You said, you said.  Yeah, and I guess we can’t, we certainly have to talk about technology and I believe, correct me if I’m wrong, but I believe you're one of the forces there at C-SPAN for adapting or adopting new technology and certainly the video library is one thing, but streaming and the use of Twitter on the air and Facebook and things like that, you’re really right there and how does that all come about?  Because again, C-SPAN -- were other networks were much slower than you, to adapt, to adopt some of these technologies?

RK:    Yeah, thanks.  We’ve been thinking about this lately and I think that being efficient with technology is deep in our DNA.  And we have a great team, many of whom have been at C-SPAN longer than I have.  I started in ’87 and a lot of our technical and editorial folks joined in the early ’80s and I know I joked earlier about the extension cords, but we were different from the broadcast television networks at the time.  Public affairs television will never get the ratings.  Well, we didn’t even take ratings.

SA:    No?

RK:    Or the license fees of for-profit networks, so we literally had to invent ways to cover events with smaller cameras, portable racks, robotic cameras around town, portable lights, portable audio gear, wireless gear.  Our team is always looking for ways to improve what we do and keep our operations efficient.  Just one example, we have many, but when witnesses testify at a congressional hearing, the tradition was the camera’s set up in the back, which would cover the members of Congress and another camera would be on the side, shooting the witnesses or the witness table.  Well, that’s not a very fair picture of the witnesses, because you’re shooting them from their side.  But no one wanted people down in the well of the committee room where they could face them.  So our team invented a robotic camera that sits in the well and shoots at the witness with a medium shot, just the same as we’re shooting the members of Congress.  So just one way, not another person, adds perspective to the event we carry and a more complete and accurate picture of what’s going on in the room.

SA:    And what about the C-SPAN Bus?  Did you have a hand in that?  Did you ever drive?

RK:    (laughs) I’ve never driven them.  Don’t believe anything to the contrary.  The C-SPAN Bus, C-SPAN Bus launched in 1993.  It grew out of a book called The Majic Bus by Douglas Brinkley.  Brian did a Sunday night program called Booknotes, author interviews.  It survives now in the form of a program he hosts called Q&A also on Sunday nights.  In The Majic Bus, Doug Brinkley took his college students from Hofstra University on a bus trip that was to sites of American history and pop culture.  It was several weeks long.  I think there were 20 students.  They outfitted this bus so the students even lived on the bus.  And the book, which is still a great read, is just about their experiences.  The city kids from Long Island coming to places like Graceland or a blues club in Chicago.

And Brian literally came off the set from that interview of Booknotes and came upstairs and said to Susan and me, “We have got to do a bus. We’ve got to do this, get C-SPAN on the road, get C-SPAN out there,” and then we all did a lot of homework on big diesel engines and 40- and 45-foot coaches; we knew more about buses than we should.  But the basic idea and forgive the pun, is it’s a promotion and production vehicle for C-SPAN.  It’s varied in its appearance over the years.  The idea is to go to schools; colleges, high schools, middle schools, bring students and the general public on and really demonstrate what C-SPAN is and how they can use it in their studies.

SA:    You mentioned Brian Lamb, you mentioned Susan Swain.  Talk about your co-CEO.  First of all, I know both you and Susan and -- well, there are problems when you have co anything.  Sometimes people say if you have two people running the show, a lot of things fall through the cracks.  I don’t think that’s the case here, but -- and then of course, the other, the other problem is you have two people running things, they butt heads; that’s not the case here either.  And I know you’ve been with Susan for years.  Talk about your co-CEO, whom -- we’ll go right on record now, we want her here next year.  (laughter) So please don’t say anything bad about her, because she’ll have equal opportunity next year.  But seriously, talk about working with Susan all these years and then maybe segue into what is Brian Lamb like to work with?  What is he like as a person?  What’s his role at C-SPAN today?  So that’s a lot to digest, yeah.

RK:    Yeah, that’s a lot.  Well, let’s start with Susan.

SA:    Start with Susan, yep.

RK:    As I mentioned, I met Susan during my first visit to C-SPAN in 1983, working on the five-year plan.  She’s very helpful and Susan’s specialty has been, at least initially was the communications and content side of the business.  So Susan and Brian Lockman, who was our VP of Production back in the ’80s, were very helpful to me in putting together that part of the five-year plan.  Susan and I stayed in touch.  We -- I moved from Centel to Rochester, New York, where I worked for ATC.  It became part of Time Warner, Charter, but the Rochester system there and I always kept in touch with the C-SPAN folks including one time when Susan was doing educational outreach to various communities and working with cable systems and she came to Rochester and we had a meeting with some of the college professors to talk about C-SPAN resources for the classroom and Susan and I did a call-in radio program that night on WHAM, I think it’s 1180 on the dial.

We both tell this story; we tell it in different ways.  So we have an hour live radio talk program from Rochester, New York; I think it started at 10:00pm and it had been a long day and the announcer kind of introduces us and says, “We have Rob Kennedy from Greater Rochester Cablevision and Susan Swain from C-SPAN.  Phone lines are open for your questions.” No calls.

SA:    Crickets.

RK:    Crickets.  Susan and I had a lot of time that night to talk (laughs) about cable and C-SPAN and education, and a year later is when Brian called and needed a businessperson and then I started at C-SPAN.  Susan and I, Brian talks about this; I think it’s sometimes hard to talk about yourself in this regard, but we have very complementary skill sets or strengths.  I’m a math and science person, I’m a business person, I’m an engineering person.  Susan is communications, content, and early on in our days at C-SPAN we saw this as very complementary and we had offices right next to each other.  And Brian then made us senior vice presidents in 1989 with joint operating responsibility and we’ve been doing it ever since.

We had one rule from day one, which we still have, which is the “no fast ones” rule, so if there’s a big decision or something we think the other one needs to know, we talk to each other about that.  We don’t make all the decisions together.  We each have our areas of emphasis, but we make the big decisions together.  I’ll go with Brian on this one, that we have very complementary strengths and the other thing is real dedication to the mission.  C-SPAN’s bigger than any of us.  So we’ve worked together over the years to try and make it better and more relevant.

SA:    And Brian Lamb, who a lot of people just see him on camera.  We’ve seen him off camera -- on camera to me, frankly, I think he’s -- I’ve never seen him do a bad interview.  He’s such a good interviewer.  I’ve seen him interview Shaquille O’Neal one time.  (laughter) I thought, how is he going to do that?  And he did it so well.  And what is he like to work with and what is he like personally and what is he doing at C-SPAN now?  

RK:    He is absolutely great to work with.  He, at his core, is extremely curious and he loves information.  You put the two things together in someone who grew up in Lafayette, Indiana, and only had the three television newscasts for all television news, that’s 20 minutes a night on three networks.  He comes to Washington.  He sees so much more is going on in the city.  He wants to find a way to bring that into living rooms in the Midwest.  So it all kind of starts with his Midwest values and just trying to get more information and then to relay that information and that’s how he is to work with -- he’s curious about what’s going on.  He trusts people with a lot of responsibility.

Over the years he was very, I think, structured and deliberate in moving from the CEO role to let -- and not just Susan and me, yes, we have the titles of co-CEOs, but our entire executive team of vice presidents, have been growing in terms of their responsibilities over the years and Brian has shepherded this. What does he do now?  He still comes in at, I don’t know, 5:00am every morning, before I get there.  He walks around.  He just asks people how things are going.  Occasionally he weighs in, but people gravitate towards him.  He’s very interested in them personally.  And is just great fun to work with.  He’s got a wicked sense of humor, too.

SA:    Yes, I know.  I know.  I’ve had the honor, many times, to talk with him.  Had lunch with him one time.  Yeah, no, he’s fabulous.  And I think one thing that you left out that I’d like to add is that he’s kind of selfless.  He doesn’t like the spotlight.  He doesn’t like to be honored or tributes and he pushes the spotlight on other people.

RK:    He set the network up that way and I think that reflects his personal values.  Anyone who’s hosted a program on C-SPAN, who’s on our staff, also has another job at C-SPAN.  They might be executive producer of our book programming or one of the producers on the Washington Journal.  We rarely show their names in graphics.  He expects our hosts to be facilitators, not stars.  He saw how the stars kind of consumed nightly news; that takes away from the information content.  So he set the example by doing call-in programs for years and years and has continued interviews and the rest we followed.

SA:    That what you’re just talking about, makes me think of a -- I believe an event that you had a number of years ago, not too long ago, where you had a party for originals, C-SPAN originals and lifers.  Am I getting that right?  Or is it maybe 20 years of service or something and it was a huge number of people, from a modest network and I want to also talk about the modesty of the network and the financial controls and the wisdom that you’ve imparted there, because I know that that’s your area.  But tell me about this event where you had a -- I believe a party or a weekend celebration for C-SPAN lifers.

RK:    It might have been the 25th anniversary.

SA:    Twenty-fifth anniversary, yes.

RK:    Twenty-fifth anniversary we marked by not only a board meeting where we invited back all of the people who had served on the board for the first 25 years, but we did do a big dinner at one of the Washington hotels and invited everyone and had videos and some kind of fun awards.  And a lot of people came for that and we have some great alumni who we’ve stayed in touch with.  We’ve had people leave and come back two, even three times, and there’s this -- especially from the early days, but all periods of C-SPAN, this feeling that we were in something, dare I say special and together we can see people we haven’t seen for years and instantly remember that trip on the bus or the Lincoln-Douglas debates or the 2000 conventions, things like that.

SA:    Hmm.  So now I do want to actually bring this up because I talked to Peter Kiley --

RK:    Oh, oh.

SA:    Who is a -- I don’t know if he’s a lifer at C-SPAN, but he’s certainly been there decades.

RK:    He pre-dates me.

SA:    Yeah, okay.  So Peter said, “Make sure to talk to Rob about the financial and managerial efficiencies, which are a huge part of our success and are a huge part of our ability to stay in business, to be innovative and grow.” Where do you want to start there?

RK:    Well, we touched on this (laughs) a little bit.

SA:    Yeah, we did.

RK:    It’s -- we’ve always felt, from the earliest days, I suppose it dates to that five-year plan, but early on, Brian has wanted to do this in a cost-efficient way for the industry.  We couldn’t do it and I’m understating it here; C-SPAN would not exist without the support of the cable industry.  We don’t have ad revenue.  We don’t take ratings.  There’s no government money in C-SPAN.  It’s all the license fees we get from affiliates.  We know it’s important to keep that license fee reasonable, compared to what other programming networks charge and we’re very fortunate to have a board of directors drawn from the cable industry, who can approve our budgets and advise us on what that fee is.

But being maybe low cost among programming networks, if you’re efficient, that doesn’t mean you have to be cheap or second rate and we’ve always stressed the use of technology to innovate -- we talked about the Robocam, other small cameras, to make the production side of the business very efficient.  We don’t spend a lot of money on advertising or marketing.  That’s another piece of it.  It’s hard to sell C-SPAN or explain the concept of C-SPAN in a full-page ad in a paper.  I know I’m dating myself, but that used to be the metric.  We tried.  Spent a lot of money on those ads and we were always, oh, but we didn’t say this, we didn’t say this.  They were text-heavy ads.

So we went for what I call “high touch advertising.” It’s the bus.  It’s talking to people one-on-one.  It’s our Student Cam Documentary Contest, where we introduce students to C-SPAN video and they put it in documentaries.  So we just -- we couldn’t follow the same road of the other networks.  We didn’t want to get our costs out of line.  We respect that we now have three channels on our cable systems and on our affiliates, so we’ve got to reflect upon that and keep our costs reasonable.  And we’re pretty tough.

SA:    You’re pretty lean, I would say.  I want to bring out that point.

RK:    Yeah.  We’re kind of -- I suppose Susan would agree.  We’re kind of tough budgeters.  We -- Susan and I sit in budget meetings with every department.  We review staff additions and changes.  We look to see if programs are still working or should they be changed?  We try to not get in the habit of just doing something because we’ve done it.  We used to have two buses.  Now we have one, just because we thought we’d saturated the country and we can do well with one. But then in its place, we launched a project. Its formal name is the C-SPAN Cities Tour, but it’s six small vehicles that go out and blanket a community, three vehicles at a time.  And over the course of a week we’ll shoot over a dozen pieces on history and books with a staff of three and then those short pieces are on C-SPAN 2 and C-SPAN 3.  Very efficient.  A lot of content, not a lot of money.  

SA:    One thing you didn’t mention and I’m going to bring it up because it’s a favorite of mine, living in the DC area and that is C-SPAN Radio.  Because I get it on just regular radio, not satellite radio and it’s basically a lot of the audio from C-SPAN programs and it’s a completely different feel from C-SPAN because on C-SPAN you’re used to seeing people talking and see them, but again, with the radio it’s your mind’s eye, creating, who are these people?  What do they look like?  If you don’t know who they are.  And I find it very enjoyable.  
 
RK:    Well, thank you.  C-SPAN Radio is one of the kind of great long shots, I think, of C-SPAN history.  Brian got his start in radio; he’ll tell you that.  He worked -- I think it’s WASK in Lafayette and that’s where he learned some interviewing techniques and promotional techniques.  He always loved radio.  We knew C-SPAN would work pretty well as radio station.  But there just weren’t good ones in Washington to acquire.  So in 1997 the University of the District of Columbia and the District itself got in financial trouble and long story short, they decided to put up for sale their radio station, WDCU and we were approached by the broker, “Would you guys be interested in bidding for this?” and we’d done a little research about radio stations and we thought, yeah, maybe we can get it for like three or four million dollars, which was a lot of money for us, but we thought, maybe we could talk to the board and we’d done some experimentation in audio.

Well, we went through several rounds of bidding.  We had several meetings with our board of directors who were all very enthusiastic.  I remember Leo Hindery was involved, Tom Baxter was involved and we bid I think around seven million dollars, and we lost.  And we were just crestfallen, because we’d worked so hard.  We’d got that price up and we lost and we lost to a company called Salem Broadcasting, who is a religious broadcaster.  They also own some stations in Washington and they ran into some resistance in the press and potentially the FCC and they didn’t want to kind of jeopardize their standing in Washington, so they called.  They knew us from the bidding process and said, “Our bid was over 10 million dollars.  Would you be interested in stepping in, in our place?” and I put my game face on and said, “I think so, I think so.  Let me make some calls,” so we quickly went the board and said, “They’ve offered us to step in.  It’s over 10 million dollars.  Should we do it?” and the board said, “Let’s do it,” so we got the radio station, 90.1, 50,000-watt channel and we’ve -- here’s more efficiency --. We’ve leveraged that over the years.  We now do podcasts.  You can hear the audio from the radio station via our app, both iPhone and android.  So that one, at the time, big investment in the radio station has really launched us down the road of audio programming in all different forms.

SA:    If I had to ask you what you really love about being at C-SPAN, in terms of the programming, the service that you provide to the country, what is it?  Is it introducing people to government?  Is it getting people more involved in civic activities?  What is it?  What turns you on about what C-SPAN does?  Most.

RK:    I have two answers to that.  One is nowadays I love our callers.  On our call-in programs.  We have, our primary call-in program is the Washington Journal, 7:00 to 10:00am eastern time, seven days a week.  We try to take 60 calls a day, works out to 20,000 a year.  So a lot of American voices.  Especially with this most recent election, I think the callers represent a way for all of us to get out of our bubbles and hear what’s on people’s mind, why they’re supporting the candidate they’re supporting and how passionate they are.  That, for me, helped put this recent election into a framework where you can say, okay, the supporters believe this; these supporters believe that.  You can listen to them every day.  
But there’s another part of C-SPAN, which is, it’s a little bit like, Susan says, it’s a little bit like church, it’s good to have in town.  You may not go there every weekend, but every once in a while you’re glad you can go.  Or the public library, if you want a more secular analogy.  And there’s usually something important to someone personally that will get coverage on C-SPAN.  

I told you that back in the early ’80s I wasn’t really thrilled when Brian went on the air and kind of got our viewers all excited.  But then in the mid ’80s when cable was first talking about scrambling the satellite signals, C-SPAN covered the entire hearing, it was a great hearing, I think it was 1986, with the members of Congress and the leaders of the industry explaining why we would take this step of scrambling satellite signals, which had heretofore been free.  And of course, people had huge dishes to pick them up and to see that whole thing and to see the industry’s arguments and also the members of Congress. Their arguments were very valuable for me, and we’ve always had a fair amount of coverage of telecommunications policy.  Brian thinks that our viewers are benefiting from it, so they should know more about it and that’s what kind of launched us down that path.  But that was an example where it became very personal for me.

SA:    Rob, I know that Brian Lamb would want us to ask this question or certainly discuss it and that is, will we see cameras in the Supreme Court?

RK:    I’m not optimistic, at least anytime soon.  I think that the justices enjoy being relatively anonymous.  They have various arguments for not allowing cameras.  Interestingly when they’re nominated and they go before Congress, many of them say, “We’ve had good experiences with television; it’s something we’d consider on the Court.”  But once they get in there, we never hear about it again and I think we should have cameras in the Court, because as a citizen you can go in and watch any oral argument. And I think if it’s a public building and a public event, cameras should be in there just like are with the Congress and the Executive Branch.  In fairness, the Court does release audio transcripts later that week and we’ve put those on air with still graphics of the justices, but it’s not the same as being in the room.

SA:    No, no, of course not.  And it’s a tiny, tiny room to get people in, so I mean, it would be a great service.  (laughs) I mean, the congressional galleries are gigantic by comparison; certainly the House is.  Rob, some legacy questions.  We talked about Susan.  We talked about Brian.  Are there other people who mentored you, who influenced you during your career that you’d like to mention?

RK:    I had great bosses early in my career and I mentioned Jack Frazee from Centel who took a lot of us who were fresh out of school at 24 or 25, 26, and put us in operating positions of pretty good size responsibility, Aurora, Illinois, Elgin, Illinois.  A lot of my colleagues were sent to run state operations for Centel and Jack, Jack would say, “Don’t worry, you can’t sink the company.  Go out and make decisions.” I know, we were like, well, really?  He said, “No, no, you really, you can be yourself.  Make decisions.  Tackle tough problems.  Check in with us but you do it and you’ll be fine.  That’s how you learn.” And it was my experience at Centel that then allowed me to go to Rochester, New York, work for ATC and our division president there was Frank [Chiaino?], who came from Manhattan Cable and Frank was very much the same way.

He relied on our expertise.  There were a group of six vice presidents there and Frank was great in sort of letting you run with things, again, at a fairly young age and I just think that’s so important, if you can get that kind of experience early on.  

And then obviously the C-SPAN team, too many names to mention; we’ve mentioned Brian, Susan, Bruce Collins, our long-serving general counsel and all of our vice presidents who just really work so hard to learn the business and keep us innovative and keep us relevant.

SA:    Now, we’re here at the end of November 2016.  We will have a new administration in Washington in a couple of months and at least at the moment the president-elect and during the campaign was not, I couldn’t really call him press-friendly.  He doesn’t seem to like big media.  He uses social media a lot, which I guess is good, in some respects.  But he bypasses the press, somewhat intentionally.  Does this, what does this mean for C-SPAN and does it maybe even make C-SPAN more relevant and more important than even it was several weeks ago?

RK:    Well, I think it certainly helps us in terms of relevancy.  The idea of, whether it’s the president or politicians going directly to the public with social media has been building now for some time and clearly President-elect Trump’s campaign, he did that to a degree never before seen.  But there is still official Washington.  There are still many, many steps before  legislation is enacted, before policies are set.  There are press briefings almost every day at the White House and in Congress, obviously congressional hearings and we are also members of the presidential pool that we’ll follow the president around to the extent he allows.  But these events taken together and then of course, they’re all in our video library, will paint a really full picture, I think, of what is going on. So as long as the institutions in Washington remain open and accessible in the same spirit that the House from ’79 and the Senate from ’86, I think we’ll be in good shape and I think C-SPAN will be in great shape.

SA:    Rob, another legacy question.  C-SPAN’s legacy, what do you think it will be or what would you like it to be?

RK:    I would like it to be understood and I think it is, as one of the great things that the cable industry did.  Here’s a service started in 1979 at the very earliest days of cable, where the leaders of the industry said, “Yeah, Brian, that’s a pretty good idea; let’s give it a shot.  We’re going to do it as non-commercial, nonprofit, a public service, no advertising, no ratings, we’ll support it, we’ll carry it,” and that’s allowed us to grow and remain relevant, and to make all of these changes over the years to either add programming and distribution.  The cable industry has done a lot of great things and I hope C-SPAN’s always going to be listed as one of those things.

SA:    Great.  Rob, thanks so much.  This was --

RK:    Thanks, Seth.

SA:    It was a blast.  I really enjoyed it.

RK:    See you at the Battle of the Bands.

SA:    Yes.  (laughter)

RK:    Perennial second place.  (laughter)

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  BACK TO ORAL HISTORIES

Mike LaJoie

Mike Lajoie

Interview Date: December 1, 2015
Interview Location: New York, NY USA
Interviewer: Seth Arenstein
Collection: Cable Center Oral History Program

Arenstein: Hi, I'm Seth Arenstein here for the Hauser Oral History Project for the Cable Center. It's December 1, 2015, we’re in New York City, and I'm joined by Mike LaJoie. Mike, welcome. Normally, I would give a title. I know you’re a partner at a firm, but what do you prefer to be called today—other than late for dinner?

LaJoie: Actually I never liked to be called “late for dinner.” I'm a co-owner of Jinsei 2.0. It’s a consultancy that me and Mike Hayashi—we’re looking at a couple of people joining us now. We’re really kind of looking at new technology opportunities, investment opportunities, consulting opportunities.

Arenstein: And you're based in...

LaJoie: Wherever I happen to be sitting. As long as I have a phone and a computer, I'm effective.

Arenstein: Your former title at Time Warner Cable, the one that you retired with, was?

LaJoie: I was Executive Vice-President CTO.

Arenstein: And you retired in?

LaJoie: January 1 of this year.

Arenstein: So 2015. Let’s talk about the beginnings. Your beginnings and then we’ll get to cable’s beginnings and some of the technological change that you’ve seen. I mean, it's been extensive. I'm really interested to know a couple of things before we start. How does a technologist who presumably learned things in college and school at such and such level and then goes into the business, and it's changed so much. How do you keep up? How do people keep up? And then I'm also interested in knowing for you to re-create when you first walked into the cable industry—what it looked like until now and then maybe later we’ll talk about tomorrow and where it's going and obviously you're still very plugged in, very involved in all this.

Arenstein: So Mike, where were you born and what were your interests as a child?

LaJoie: I was born in Santa Monica, California, in St. John’s Hospital. I grew up in the West Los Angeles area, Brentwood. My father still lives in the house that we moved to when I was five years old. He's a cable customer. You know, this is a funny story. When Time Warner Cable bought that cable property, my parents were complaining about it. They said, “Finally, maybe you can do something about the signal.” And I said, “Oh, yeah, of course.” So I called up Roger Keating, who was running the system then, and I said, “Roger, do me a favor. This is my parents’ address. Can you go check and make sure that their cable is installed properly and by the way, send me the bill from now on.” He said, “Sure, no problem.” And he calls me back a couple of days later and says, “You know, we can’t find your folks in the record.” I said, “What do you mean, you can’t find them? They’ve had cable for years.” And he says, “No, they’re not there.” So I called them and said, “Mom, how did you get cable?” She said, “I don’t know. A nice boy came and he said for a hundred dollars he would hook up the cable and he would send us a bill.” I said, “Do you get a bill?” She said, “I don’t think so.” So my parents had been stealing cable for probably fifteen years and didn’t even know it. Some guy was just going around and collecting hundred dollar bills for wiring people up and bootlegging cable. So you say our industry has come a long way. It really truly has.

So I grew up in West Los Angeles. My interests as a kid were always—I mean, if it whirred, clicked, buzzed, spun, blinked, I wanted to know why. I wanted to take it apart and fix it. So I was making things better, you know like Tim Allen. I rewired it and that was kind of me. I would always end up with two or three parts left over; I didn’t know quite where they went, but it seemed to still work, so...

Arenstein: And what about high school? What were you interested in in high school?

LaJoie: Girls, mostly.

Arenstein: And how they were put together and wired as well?

LaJoie: I majored in co-education. That was really my main intention in high school.

Arenstein: And where did you do your college and your technical training?

LaJoie: You know, I was kind of all over the place and I never did graduate from college. I was taking business courses. As I was going to school, I paid my way through school through usually mechanical engineering jobs. So I went to U of O for a while in Oregon and this was 1972. That was a pretty bleak time in the economy. I was paying the rent by fixing plows and hay balers and people said, “You know how to do those?” I said, “No, but it whirrs, it spins, it clicks. I can fix it.” So that’s kind of always been the story with me.

I became a stockbroker relatively early on; I was 21 and I was doing really well and left college. And then when I was in my mid-twenties, a number of things happened. I had a couple of personal tragedies and I stopped being a stockbroker. I went whole hog into computers. This was like 1979-1980. The Apple II had just come out. So I kind of taught myself how to write software and how to fix computers and how to build computers and peripherals so I'm kind of an autodidact.

Arenstein: So tell me about from fixing computers and working on computers in sort of the late 70s and early 80s, to here you are toward the late 80s, mid-90s, becoming a consultant to Warner Communications. How did that happen?

LaJoie: I first came across Warner in the early 80s when we were figuring out how to make compact discs. And that’s when I first met Warner. I was consultant for a company called “AIM,” which was owned by Philips. And I worked with the team that created the compact disc.
That’s where I first met Al McPherson, who was the CTO of Warner Brothers and another guy named Walt Klappert. Walt is still running around doing something. He's a really brilliant guy from Yale, and Walt and I formed a friendship. Then I just kind of knew Walt over the time and he bought stuff from me and I had a little computer store and some other stuff that I was doing. So in 1988, Warner Brothers was doing—this was before the time of the Warner merger. The guy that was the father of the compact disc: his name was Stan Cornyn. And Stan was a fair-haired child at Warner because the compact disc revitalized the record industry. Because everybody went and replaced their entire record collection. So all the stuff that you bought the last fifteen years, you went and bought it again. So Stan Cornyn was a very, very popular guy in Burbank. He wanted to go figure out how to use compact discs to put entertainment on them, not just music. So we started messing around with CDs. The specification for compact disc audio was called the Red Book. The Yellow Book is CD-ROM. The White Book is for laser disc. There’s a set of specifications on how you lay data down and retrieve data back from optical media. So we started messing around with CD-ROMs. I don’t know—CD-ROMs used to be a big deal before TCP/IP took off. And so Stan wanted to build a business around making titles on CD-ROMs—games and all kinds of informational stuff, it was interactive stuff. Very early interactive product.

That’s how I got working with Warner. And after the Time and Warner merger, I met Joe Collins and Glenn Britt and Jim Chiddix and all those guys in 1992. And they wanted to do this interactive stuff over a cable system.

Arenstein: And they were all at Time Warner Cable—we'll, it wasn’t called Time Warner Cable then, was it?

LaJoie: It had become Time Warner Cable by that time. When the Time Warner merger happened, that’s when I first met those guys. We started talking about how could you do this over a cable plant. So that’s how I got involved and started talking to those characters. The next thing you know....

Arenstein: And for the record, where was Joe Collins, what was his title, what was Glenn Britt’s title, what was Jim Chiddix?

LaJoie: Joe was the chair of—actually at the time I was working for a guy named Jeff Holmes. And Jeff had been, he'd been the IR guy for Warner and Jeff was kind of a character. He ingratiated himself with Jerry Levin. And he was doing new technology for Jerry. And I would say that Steve Ross—I had met Steve several times and done a few things at his house, because he always had the latest and greatest stuff at his house. At this time Steve was still quite healthy. Boy, what a character he was. So I met Joe; Joe was the CEO and chairman of the cable company. Glenn was president of Time Warner Cable Ventures. Chiddix was running technology. He wasn’t the CTO; they hadn’t given him that title, but they had pulled him out of Hawaii. Do the archives have those videos of Chiddix fixing Volkswagens?

Arenstein: I don’t know, but I know he's done an oral history.

LaJoie: Gosh, if you don’t have those, you’ve got to get them. You have to. It's Chiddix with hair halfway down his back and a beard like this. He did a tutorial on how to fix Volkswagens. You’ve got to get that stuff. It's out there somewhere.

Arenstein: I knew you were going to bring up Jim Chiddix and we were warned that you do a very good imitation of him so I got in touch with him during the week.

LaJoie: Uh-oh.

Arenstein: And I said, “Look, you know, we have the presidential debates going on, you have to have equal time. Jim, do you have a good imitation of Mike?” He said, “No, I don’t.” But he said, “John Callahan can do both of us very well.”

LaJoie: Callahan does. Callahan does the best Carl Rossetti I've ever seen. He did a Carl Rossetti impersonation that made Joe Collins cry one time.

Arenstein: So can you give us a little bit of Jim Chiddix? You said you were going to do an imitation.

LaJoie: I’ll tell you a great story about Jim. Actually it was around this time and we were trying to select which vendors we should use for the Full Service Network. And it looked like things were trending in one direction and I passionately thought they should go another direction. And so I got time with Jim and I explained to him in detail why it was so important not to choose Company A, to choose Company B, and Jim looked at me with the eyebrow down and he listened and he says, “Well, this is all very interesting. I have to go.” But Jim was always considerate, always just the consummate gentleman. What a class act. You know, he had a vision and he still has a vision. And what's more he can translate it into a way that makes people open their checkbooks and that’s, I think, was always his greatest skill.

Arenstein: You know, that’s a good segue to what people say about you and what I think how you describe yourself as well—as somebody who can translate technology into terms that laymen can understand. And leading technologists and forming teams—that’s what people say about you. Is that correct?

LaJoie: I think it's a skill that is something that is really, really critical and it's hard to teach that. It's actually an odd thing that happens to people that are technologists. If you're a very, very good technologist, especially in an industry that has an appetite for technology as opposed to an industry that creates technology for its own sake. If you demonstrate that you're really a valuable technologist, then people in the organization want to reward you. And so they reward you by saying, “Stop being a technologist and start managing people and money.” Rather than saying, “Gee, you're a really fabulous technologist. We’re going to give you a bunch of dough, go hire some more smart people and build some great stuff.” They say, “Stop doing the stuff you're good at and do this other stuff.” So it ends that being able to translate critical technology into what the opportunity is; translate it into terms of time and money, is something that’s very valuable. And if you can do that and then if your translations are correct, more often than not people tend to value your opinion. And that’s something I really paid attention to with Jim Chiddix. I really watched how he did that. He may not know this but I learned a lot at the knee of Mr. Chiddix.

Arenstein: You'd be interested to know that now he's sort of in semi-retirement and he tells me that he's finally found his calling. He shleps kilns for his wife’s pottery studio. He says that’s his profession now.

LaJoie: I’m sure he’s getting better at it but still not well enough for Trudy.

Arenstein: All right, so let's get back to where we were in our story. You meet people like Glenn Britt and Joe Collins and Jim Chiddix. What year is this and what does Time Warner Cable look like at that point when you walked in the door?

LaJoie: This is probably 1992, late 1992. Cable is still long, long cascades of amplifiers. Hybrid fiber coax has not been deployed. Louis Williamson has proved that it works. People don’t recognize Louis for this but he is the guy that invented hybrid fiber coax. He is the guy that first said, “I can transmit television signals over a piece of glass and translate it into an electrical signal on a node and deliver it.” He's the guy that came up with that architecture.

I can't talk about modern cable television without mentioning Louis Williamson. Louis—that architecture that he came up with is the foundation for the extensibility and the robustness of everything that we do in cable. The fact that he came up with that and re-invented how you build a cable plant is what actually gave birth to digital television, gave birth to on-demand, gave birth to telephony, and high-speed data and all the stuff that we do today.

So this is 1992 and it was—as I said, this guy, Jeff Holmes, inserted himself in the cable company’s desire to roll out hybrid fiber coax and to demonstrate what you could do with a high-end two-way plant, using HFC. So I got inserted into this program and went to Denver in the old ATC headquarters right there on 160 Inverness down at Dry Creek, across from Jones. Which I understand, that’s a building that’s supposed to be torn down here pretty soon. And that’s where I met those guys: Dave Pangrac and I met Jim Ludington and Louis and Scott Waddell and Don Gall and Javon. And that was the crew, along with Hayashi on the periphery telling us we were all doing it wrong. That was the crew that kind of came up with this overall architecture and figured it out. OK, how could you actually do TCP/IP over a cable plant using hybrid fiber coax? How could you layer it on top of a transport? We used ATM at that time which was supposed to be the e-ticket, which has now been kind of retired. But that was the crew that put it together and did all the vendor selection and then oversaw the construction of it.

Arenstein: What did Time Warner Cable look like? I mean, how many states was it in, how many employees did it have? What did customers, when they turned on their television, see at that point?

LaJoie: At that point, they were probably seeing about 50 channels of television in most places and it was not even standard definition because it wasn’t digital. It was NTSC; it was analog TV. And so I think we had a mostly 550 plant, maybe not. There was a lot of 360 that we were—we hadn’t even started significantly on the upgrades then and so we were still all cascades of coax with up to 60 amplifiers in cascade. So if you were close to the headend, you had a nice experience. If you were a long way away, it wasn’t so nice.

But I guess we were in probably about 45 cities then. About 45 cities. Every single city had its own earth station and a bunch of dishes outside and the downlink facilities and all that stuff, you know. Customers were probably about 7-8,000,000, I guess.

Arenstein: When you got into cable, what did people say to you when you told them, “I'm going to work for this cable company.” At that point, what did people say, what was their reaction? Was it still kind of a pioneering business, or was it a pretty established business and you knew you were making a good decision?

LaJoie: You know, it's funny: when I got into technology, I made the decision in 1980 to get out of finance and into technology. At the time, I set a goal and said, “You know what?” My goal was I really wanted to work on the leading edge of technology with the greatest technologists I could find. At that time, I didn’t realize what the cable industry was. I knew what cable television was; I was a subscriber. I don’t think it was that big a deal. This was before the 1994 Act. I think cable was still broadly enjoyed but still in its early growth and its heyday. I think it had been built mostly everywhere; most of the big cities had been franchised. I didn’t know what I was getting into. I was still a consultant at this point in time. I actually had partners. We had other customers, you know, and at the time I had fourteen people working for Warner Records. And my partners were doing business with other folks so I just thought I was—

Arenstein: It was just another customer.

LaJoie: This was a very good customer. At the time, they represented about 40% of our business. So it was a good customer.

Arenstein: When did you make the move to fulltime working at Time Warner Cable? It was about ten years later or so?

LaJoie: No, it was January 3, 1994. So it was two years after that and we were still a year away from launching the Full Service Network in Orlando, Florida. But boy, we were full swing into it and I was managing a lot of people as a consultant. I was managing a lot of Time Warner people and overseeing a significant spend. I kind of went, you know, like, “I'm selling you hardware and I'm authorizing payment to some of my employees and managing a bunch of yours and managing the money for” - at the time it seemed like a lot of money. It was just a few million dollars, but I said, “This doesn’t feel right to me.” And they said, “Yeah, you know what? You should probably become an employee.” And I said, “Well, I'm not so sure I want to become an employee.” But my partners were in a position—they were actually happy to see me go, wrote me a check. So I became an employee in 1994.

Arenstein: OK. Tell me something about what cable technology looked like in 1994 and you know, you talked about the system in Orlando, or the project in Orlando. Tell me what were some of the early things you worked on as a fulltime employee for Time Warner Cable.

LaJoie: Well, I focused on a lot of the applications that we were building. There were two-way applications that we were building for the Full Service Network. Then in 1995, I guess—I had a development group in Burbank. We were building a lot of stuff. We were also starting to do a lot of early HTML work because by this time now, we were looking at launching a high-speed data service. So we were working on a number of things, mostly software related. And then the company decided that we were going to shut down that internal—we were also working on an interactive program guide. So the first interactive program guide that we launched on the digital television systems that came in 1996-1997—a lot of that stuff came out of my shop. We did a lot of the early design work and a lot of the early prototyping stuff. Then we shut that group down and Pioneer, we sold a lot of that to Pioneer. And they took over quite a few of the folk. They built the first guide, which then—it's now still out there. Some of those guys are still around. I think they're now working for Rovi, I guess. So that was like the early stuff.

And then in 1995, I'm pretty sure it was 1995, we shut that group down because the cable company, they just said, “You know, we’re not going to spend this kind of money every year. The Full Service Network is interesting, but we’re not going to take that particular methodology and roll it everywhere.” We had to re-invent it and turn it into something we could affordably roll everywhere, which became what we called the “Pegasus Project.” Then I just kind of rolled around for a year and a half and I looked at interesting stuff. And I looked at a lot of high-speed data stuff and I got involved with IP telephony, so PacketCable was something that I started at CableLabs. Actually the first RFP for PacketCable was something I wrote over a weekend at my coffee table. And that was the first thing that was published for PacketCable to start launching telephone.

Arenstein: You know, I’d like to sort of stop at this point and ask you what was the feeling when you were doing this work. For example, I remember when the concept of your cable company being your phone company. Your cable company providing this thing called the Internet to you. A lot of people said, “Gee, I don’t want my cable company doing those things.” But you were in the middle of it. You were right in the weeds. And was your feeling that this was going to happen, or was it, I'm working on this and maybe it will happen? Maybe cable will be offering phone and being an Internet provider, whatever that is. At the time, right, it was pretty pie-in-the-sky or not? Were you totally sure this was the way we were going? I mean, you were in the middle of it.

LaJoie: I was rabidly in the camp that said, “This is something that we absolutely have to do.” I wanted to put high-speed data modems in set-top boxes. I wanted to put G.711 codecs for voice in set-top boxes. In the first digital set-top boxes.” I said, “Guys, we've got to do this. This is something that’s coming. This is going to be here.” I give a lot of credit to Glenn and Carl and Joe, too, for putting up with it. Jerry Levin let us do it, but Jerry didn’t fund it. Glenn and Carl actually went and raised the funding for high-speed data. They went out and found partners to throw in the money to allow us to build the initial Roadrunner. You know, it is one of the things I absolutely treasure about the cable industry, is the risk taking and the pioneering and guys that just have this vision and say, “You know what? This is going to be something that is going to bring huge value. This is going to change the planet. And we’re going to go do this, take the risk to go do it.” It is quintessentially American. It's something that always been deep in the bones of Time Warner and Time Warner Cable.

One of the things I kind of lament: Time Warner Cable, the brand, going away. It's the nature of cable. Cable, you build it, you borrow a bunch of money on it, you grow it and then you sell it. That’s how cable works. And everybody goes home to go figure out what they're going to do next. So I understand it's the nature of the beast. But I was always on the other side, I was always on the buying side. I'm very pleased that the career was great. Cable, as Garrett Morris used to say, “Cable had been very, very good to me.”

Arenstein: But I guess you kind of said it, but I'd like to just dig a little bit more. Was it, and I think you kind of answered it, was it a bet that Glenn Britt and Joe Collins and you made, or did you feel that it was a sure thing? Because now, here we are sitting in the digital age, everybody’s using their computers, their phones, and most young people, I would think or anybody, doesn’t really think anything was any different ever, that it wasn’t, gee, will this happen or not? I mean, when Glenn was raising the money and things like that at cocktail parties, did people, when you were talking to them, did they say, “Sounds interesting, but I don’t know.” But you were definitely in the camp, right? Do you remember that?

LaJoie: It's hard to explain to people. At this time, we were spending literally billions of dollars on the infrastructure and the signaling protocols to support this business. When no one even knew what the hell it was. Very, very few people knew what it was. And the power of it was when you saw it work. First of all, you’ve got to remember, I was the 300-baud guy, right. I had a dialup modem in my Apple II and spent hours and hours on a VAX and a PDP-11, screwing around with text files. This was back in the late 70s. I was an absolute acolyte for connectivity.

Arenstein: I can see that.

LaJoie: So when you actually saw what happened when you could put broadband against that, and you could start to see how images would change and how quickly this thing and you’d say, “Oh, my gosh, there’s no way. This is going to take the world by storm.” It is amazing how now it just feels like air. Everybody just kind of just assumes it; you don’t even think about the fact that we’re all breathing the same air because the Internet connectivity is just there. “It’s always been there.” Not true. Not true. It came from huge investment, a lot of risk taking, and a lot of development borne on the backs of folks. Really, in the cable industry. I mean, telephony was there. The guys in the chip business and the CPU business and the routing, those guys, the Ciscos, the Intels, certainly they took huge risks as well. I think actually if you look at it, if you were paying attention at that time and you understand things like Moore’s Law and Butter’s Law, and you just do the simple math, and you say, “This is going to get twice as fast for half as much every eighteen months.” And you add that up and you go, “Wow! This is going to be really, really different, really, really fast.” So I was absolutely convinced.

Arenstein: OK. VOD: tell me about your involvement with VOD.

LaJoie: So early on—first we did VOD in Orlando. And we had about 100 titles. We had 99 titles. We tried to add 100 titles and the whole thing broke, and we couldn’t figure out why. I pored through the software, the code, to find out why was thing breaking. It was because somebody had Harp Coded the value for how many titles you could have to the maximum limit of 99. We had to go change that.

So that was where we first did it. Then we started trying to figure out, OK, how could you really do this? At the time, the server farm, to store those 100 movies—and it was only made available to 4,000 people—the server farm to store those 100 movies, to manage that stuff, was bigger than this room at the time. And now, today, that would fit in one rack unit this high, like this pizza box. And you could throw not just 100 movies in there, you could put thousands and thousands of movies in there. So that was the first incarnation of it. But then in the late 90s, 1998, I guess, we made the decision, OK, we’re going to go do this. One of the things that I did that I think was a little different than other engineers and technologists was I would actually build the spreadsheets and do the business models and say, “Look, this is what you have to assume. If you assume you can sell this many movies a month and you can charge this amount of money for it, and you license it for this price, this is the revenue and the margin you can get out of it which then says, ‘If you want an IRR of X, you can spend this much money on the capital. We’re there. Let’s go spend this money.’” And I did the same thing for telephony. I built the business model for early telephony.

So we did the first system-wide deployments of it in Tampa and in Austin.

Arenstein: I remember that.

LaJoie: And then in Hawaii. Boy, I tell you, it was very, very different than it is now.

Arenstein: How so?

LaJoie: Well, we actually had to build multiple—so in Tampa, for instance, I want to say we had 80 different duplicates of the movies that were available, sprinkled around the city. Because we didn’t have enough bandwidth in the plant and because the technology wasn’t there to be able to serve it all from one single hard disk farm. And that was OK. So you built these things and you just kind of populated it out. But the problem that you had then was it took hours and hours and hours to make changes to it because you had to percolate the stuff all through that distributed server farm. Then over time we pulled that back. We made the decision, I guess, in 1999 to go company-wide. I think Glenn and Joe came to me and said, “We want to go roll this out everywhere. What will it take?” I said, “I need X number of millions of dollars and two years.” They said, “OK. You got a year and half as much.” I said, “OK, all right, we’ll do it.” And so, then we just put together the plan. And it's interesting how people worked because you could actually put together an atomic plan. You can say, “What do I have to do in one hub?” And then if I figure that out, then I can say, “OK, if I were to do it, if I start to perc that back, what do I have to do in one system, and if I build that out, then I can...” So you can do this atomically. And if I can do the economics and if I can do the blocking and tackling for a single hub, then I can figure it out for the whole company.” And that’s basically what we did.

We pulled it off, we got it done, we turned it on in nine months and it worked. There were several sleepless nights, but it all worked.

Arenstein: Let’s go on to another project. DVR and network DVR. What was your experience with those?

LaJoie: We first saw a version of a DVR out in Silicon Valley. There was this guy, he was wearing these Bermuda shorts and a T-shirt, white socks and sandals, and he said, “Come look at this.” So we went and looked at that. And I said, “Gee, that looks pretty interesting.” We figured that was going to fly. This was Chiddix, and Hayashi and myself. I really have to give the credit to Hayashi, who took the risk personally. We knew that DVR time-shifting—time-shifting television—was a very powerful thing. I think replay TV was out there at this time. There were a couple of early tries at it. But we really knew that given the right model, that this could take off. Given the right model, given the right offer at the right price to consumers. So we’ll give you the box; you don’t have to pay $600 or $900 for the box. Oh, by the way, it's just a few bucks extra a month and you get this wonderful thing. By the way, when we rolled out high-speed data, we were offering a residential service of a megabit per second for 40 bucks a month, 45 bucks a month. At the time, if you wanted to get a T1 line from the telephone company, which was 1½ megabits per second, you paid $3,000 a month. Just relative scale. We knew that the economics worked for us at $45. And we saw what a T1 looked like but that was something at the time that an entire office building would share. We were going to give that bandwidth to one household. So when you look at the power of the distributed network, the fact that that’s already there, and that that signaling all works, and the customer base is there, the kinds of things that you know you can make work financially, the kinds of things you know you can roll out and the customers will respond to. Kind of the world’s your oyster. So DVR we knew was going to work.

At the time, we had I would say between Hayashi and I and some others who were early advocates of it, we had some difficulties in actually getting the company to pull the trigger. Hayashi just told Michael Harney at Scientific-Atlanta, “You know what, I don’t care. Make 50,000 of them; we’re going to buy them. We’ll buy them. Trust me.” And so on. Harney went to Scientific- Atlanta and we made them and sure enough, we bought them. We first rolled them out in Rochester, New York. That was a lot of fun.

Arenstein: All right, so one of the names we've talked about or mentioned in passing was Carl Rossetti and I know Carl has kind of a deep connection to you, Mike. Explain a little bit about your relationship with Carl and his mentorship and his tank driving as well.

LaJoie: Well, you know, Carl is a unique guy and he was somebody I think that recognized the potential in me. I saw him mentor a lot of people over the years, men and women. And he gave you the room to grow and to make your own mistakes and learn, but he was also there with a little bit of guidance. He was the guy that gave me the opportunities. I think he saw in me the ability to go and complete this stuff and he was a big supporter. He was the driving force behind digital television, behind high-speed data, the driving force behind DVRs, from a financial perspective. Joe and Glenn really trusted Carl’s gut business sense and I relied on Carl for that little bit of guidance that I kind of needed. He was always there for me.

Arenstein: You wanted to talk about Kevin Leddy, too.

LaJoie: When I first started coming around, Kevin was a very senior guy, a lot of really deep experience in the cable industry, has done a lot of jobs. But very deliberate thinker and somebody that goes through the scenarios and figures out the ticks and the tacks. I think I drove him nuts a little bit because somebody would come up with an idea and I would say, “Well, it’s going to take this much money and take this long.” And then he would go and do the analysis and come back with the answers, this much money and this long. Within 5% or so. And drive him crazy. But he did the deep analysis and he always had the passion for the business that would allow him to—you’ve got to give him a lot of credit. He was a huge proponent of DVR. He worked long, hard hours with the NCTA and the FCC dealing with a lot of the CableCARD stuff...he was a big contributor to the industry and I really, really enjoyed my collaboration with him over the years.

Arenstein: So a name has come up a couple of times here—Mike Hayashi—and I know you’re partners now. There was a profile of you and Mike done earlier this year by a good friend of ours, Mike Robuck, and he begins the article both about you and Mike being the person—CED’s Persons of the Year. He starts by saying, “Lewis and Clark, Hope and Crosby, Cheech and Chong, Batman and Robin, Penn and Teller, LaJoie and Hayashi.” No pressure there at all, right, being compared to those people?

LaJoie: No, you know it's really been a wonderful thing to know Mike Hayashi and to work with Mike Hayashi. He is absolutely brilliant. The kind of energy that he brings to things, and he’s just straight and true. He’s not always gentle but there's a few vendors who I think would probably roll their eyes at that statement. But yeah, it's been great knowing Mike and working with Mike. We say, “You get twice the Mikes, no waiting.”

Arenstein: And of course I should say that another Mike, Mike Robuck, who wrote this piece we were talking about, calls you “Cable’s Mike and Mike.” That’s a reference to the ESPN hosts on the radio, Mike Golic and Mike Greenberg. Tell me about it. Because one of the things in this article that’s so wonderful—Mike Hayashi talks about your, what is it, “slap-and-tickle” management style? I don’t think I have that right. There's a tickle in there but I don’t know if it's slap-and-tickle. Is it slap-and-tickle?

LaJoie: It is slap-and-tickle.

Arenstein: Tell us about slap-and-tickle. That’s another great pairing.

LaJoie: I don’t know. I guess I have a personal style where I can be a little gruff but I never want people to feel bad so if I am gruff with you, I always make you feel good afterwards, right? There was one particular meeting where the guy, Bill Helms, who’s also another brilliant engineer, and I asked Bill a question, I said, “So what's your opinion on that?” And he said, “Well, I'm trying to figure out whether I'm being slapped or tickled.” So that’s where that came from. The slap-and-tickle management style.

It's not something that I do intentionally. It’s not a style that I try to create. But I can be gruff, I can be pushy. At the same time, I don’t want people to be afraid of me, I don’t want to be a (I almost said a bad word), but I don’t want to be a difficult person to work with. I want everyone to feel like they're in an environment that’s creative and supportive and nurturing and you need that stuff to make good soup. So maybe there's a little slap-and-tickle. Some people have got to be nudged every now and then.

Arenstein: Since we’re talking about people skills and things like that, I know one of the things that you mentioned to us in the pre-interview was the collegiality of the technology side of cable. And the cooperation. And clearly, you’ve talked about all these people today. I know there are a lot more that you want to mention. Talk a little bit about how much the collegiality and the cooperation on the tech side has meant to you. I know it's a big, big part of your life.

LaJoie: You know, it's been phenomenal. And it's not something that you find in any other industry. It's really the brilliance. I don’t know whether John Malone was thinking about this when he created CableLabs. But I wouldn’t put it past him. Talk about long sight. I don’t know John very well. I've met him a few times. Of the cable giants, he's one of the few I don’t know really well. But, wow.

You know, CableLabs, it's the—I don’t know, I guess it's the consortium that we love to hate. Because in some way it's a pain in the neck and it kind of gets in our way. But the forum that it gives the industry to work together and collaborate and share ideas in a way that you just don’t have in other industries. You don’t see Intel and AMD getting together to figure out how to make the next great chip design. It just doesn’t happen because they are really competing in that it's another kind of—it is an affect, or it's vestigial from the way that local franchising happened. It really doesn’t make sense. You can't really make a profit overbuilding with cable plant. So you can really only have one operator there. I do believe that’s true. And so because of that cable companies don’t really compete with each other. So we have the ability to collaborate together. And believe it or not, it is an aspect of antitrust law, which allows for this, allows for companies that normally shouldn’t collaborate because of the risk of collusion. If it's something for technical purposes that actually betters the entire industry, and for the betterment of the world really, then it's OK. And that’s kind of what CableLabs gives us. And that’s yielded a real collegiality and a cooperation and a friendly competition among the technologists, right? Guys like David Fellows, guys like Tony Werner. I've known Tony for a long, long time. He and I have worked together a long time.

Wilt Hildenbrand is another one out there at Cablevision. Wilt is somebody that really never—he really never kind of dove into the whole CableLabs thing. But still I always knew I could call Wilt and say, “What are you doing with this? What should we do? I've got this issue: have you run into this?” Then he would call me and do that same thing. I remember we were trying to do—we wanted to do a company, like a town meeting. We knew we could do it at all the cable systems where our employees were. The corporate headquarters was in Stamford, Connecticut, and we didn’t have plant there. So we were going to go—I remember Warner was doing HR at the time was going to go hire a satellite truck and do all this stuff and Glenn came to me and said, “Do we really have to do this?” I said, “We don’t really have to do this.” And I called Wilt and I said, “Wilt, can you give me a channel?” And he said, “No problem.” And he gave me a channel and we did a downlink and it took fifteen minutes and there it was for free instead of spending 150 grand.

So it's that kind of stuff that where we all kind of work together; it's all based on similar but different technology and that collaboration has yielded great results for the industry and for our customers. Because I think we've made—we've seen such dynamic change and growth in the things that are offered. It wouldn’t have happened without that kind of collaboration.

Arenstein: On that last point, you’ve seen so much happen in the industry. So many technology projects that you’ve been part of. Are there one or two that surprised you and you looked at them and you went, “Wow!” The first time you saw them, and they’ve stuck with you for all these years. Are there one or two that still tickle you today? I remember the first time I saw an HD television and watched a game on it and then went back home and looked at my regular television. And it was a baseball game. I said, “Gee, they must have some problem with the lights since I came home.” And then I realized this was HD versus SD.

Arenstein: It wasn’t quite like that experience of the first time seeing high-def. For me, the kind of experience I had was—we had launched video on demand, it had been rolled out everywhere but that was transactional. And so it was relatively predictive. There was a natural financial gate to that. So I knew what the behavior was going to be. We wanted to launch HBO on demand. That you could watch as much as you wanted. But there was a subscription rate for it. You had to pay for it initially. And so again there was a financial gate and the introduction of customers was relatively predictable. It was an even introduction.

This is kind of the early nascent days of on-demand.

They wanted to embed HBO on-demand. Embedding meant that if you bought an HBO subscription, a linear subscription, you got HBO on-demand for free. And I said, “Guys, you can't do that. If you want to do it for new HBO subscribers, OK. But you can't turn it on for everybody because it will break.” And they said, “What do you mean, it will break? I thought it was working.” I said, “It's working but trust me, when it scales to that big, it will break. I don’t know where it's going to break, but it's going to break. So we’re not ready for that yet.” “OK, we won't do it.” And they did it in Manhattan Fourth of July weekend. And naturally, it broke. And I’m actually up on my boat, Fourth of July weekend, and I'm on the phone, on a cell phone, talking all night long, trying to figure out what is going on, why is this thing breaking. And it kept falling down. Systems, the queues would get long and people couldn’t get their movies started and their set-top box would reboot. You know, cats and dogs living together. It was bedlam.

Waves and waves of set-top boxes started rebooting. The network controller is about ready to tip over. “Look, when the set-top boxes reboot, they have to go in a queue. Otherwise they're going to kill the controller” “All right fine, we’ll slow roll them.” I said, “Before we do that, we better call customer service and tell customer service we’re going to do that because if somebody goes and unplugs their box, it's not going to come on for six hours. They're not going to have TV.” “OK, all right. Good idea. We’ll call customer service.” So somebody runs off on the engineers and he comes back on the line: “I figured out why the set-top boxes are rebooting.” “Why?” “Well, customer service had a recording on telling everybody to reboot their box when they called in.” So they didn’t tell us that they were telling customers, ‘Reboot it.’” Then, about thirty minutes after that, we found out what the problem was. We actually found out that there was some issue in the code for checking to make sure that somebody had credit. There was a code in there to make sure they’d been paying their bill and they could actually do it. I said, “You know what, screw it. Tonight everybody’s got good credit. Just turn that piece of the code off.” But then the guy from Pioneer, it actually was, said, “Wait a minute. I think I know what's wrong.” And he went back and fixed it, then did a build. Introduced the new build and all of a sudden, everything settled out. It's those kinds of moment in the course of things when you get over the hump and you know you're past that “baby land legs” stuff in technology that have been really the most rewarding for me.

Arenstein: OK. I know there were a couple of other folks you wanted to mention in your oral history. People like Dick Green, Kevin Leddy, Brian Roberts and Jim Robbins, you wanted to talk about.

LaJoie: And Bob Miron.

Arenstein: And Bob Miron, right, at that dinner where they regaled you.

LaJoie: Actually that dinner was early on. It's interesting, a lot of the names you mentioned there. It was a dinner that Dick Green had pulled together at the Consumer Electronics Show. Probably 1993, 1994, something like that. Bill Gates was the speaker at this dinner. Here I am, this kid, you know, some software kid. I'm at this table and I'm between Jim Robbins and Bob Miron. If you don’t know these guys, Jim Robbins was 6’4” and the swept-back blond hair. What a nice guy.

Arenstein: He was a great guy.

LaJoie: And Bob Miron was not. Bob Miron was about 5’6” and no hair, but they were both brilliant guys and very early pioneers in the cable business. All night long the two of them regaled me, trying to outdo each other with, “Who invented cable? Who was the guy that first did all this stuff?” It was a wonderful experience. Bob Miron was always—even to this day I consider Bob a mentor.

You know, it's another thing too about the industry. It's such a welcoming industry. Everybody that I've encountered has been more than willing to give you a hand up, to say, “Come here. You're interested in this? Come look at this. Here, let’s look at this. Try that.” It's been such an open and diverse environment. You know, I come from nowhere. I mean, I come from nowhere really and met all these characters by happenstance. If you come into the cable business and you want to work hard, and you want to just be a worker among workers, boy, you can make a living and you can find a home. And I certainly did.

So Bob and Jim Robbins, really great guys. It was tragic that that happened with Jim. I remember one night it was Cable Center Hall of Fame dinner. And the time when our cable table was here, and the Cox table was here and Jim and I were sitting right next to each other. And we were kind of—one of the things he would always kind of do was talk out of the side of his mouth.

Jim at the time, this was close to his retirement, but he was a very senior guy but that was kind of the way it was. It's a very level industry. It really is, nobody stands on hierarchy or rank in the industry. And I always felt like doors were open anywhere. You know, Brian Roberts, I've known Brian for a long time and I've actually watched him—boy, what a job he's done building that company [Comcast]. Ralph, of course, gave him something to start with but Brian has done a fabulous job. And I can't help but recognize Ralph, the fact that he passed this year. Another one of the guys that just—

Arenstein: Very down to earth.

LaJoie: Down to earth, just as nice as can be and just went and took this risk. He was a haberdasher, for heaven’s sake.

Arenstein: He made belts, I think.

LaJoie: And he said, “You know, I'm going to build these cable plants.” That’s what he did. Phenomenal to me. It's such an honor to have been part of it. But Brian has always been—he’s somebody that’s willing to take a risk. He gets nervous about it, though. He does get nervous about that. And then all the guys at Comcast, because we worked very closely with them over the years. Mark Coblitz, who left the industry several years ago, Mark was very involved with CableLabs and he was involved with NCTA. Might be Mark pulling in now.

Arenstein: That was Mark, yes.

LaJoie: Anyway, Coblitz was involved with CableLabs and NCTA and so I spent a lot of time with Mark and with Steve Craddock and those guys from Comcast and Fellows. Now in the last several years, much more time with Tony Werner. Tony Werner and I have really collaborated well together over the last seven or eight years since he came back from Liberty and went to work for Comcast. He has just been a great partner.

You know you think about guys that I’ve also—like Chris Bower, just a solid technologist and he was at Cox. Great, great guy. Kevin Hart, who is somebody who’s relatively new to the industry and different. I think he came from Capgemini, is where he came from. And Kevin is not somebody who’s cut from the mold. He's not one of the old cable guys, he kind of came in from the outside, but true to form, the industry just said, “Who's this new guy?” He’s a little different, he’s a little quiet, he’s a little reserved but he really kind of came into his own and he's a great contributor, really wonderful guy to work with, and he was welcomed in. Jim Blackley is another one. He’s at Charter now. He was at Cablevision for many years. Another one I've done a lot of work with—

Arenstein: I know you wanted to mention Dick Green, too.

LaJoie: Dick is—the work he did at CableLabs, he knows everybody. He knows everybody. To herd these cats; as collegial as it is, and as open and diverse as it is, there's a lot of ego stomping around. To herd all those guys together, and to get them all to perform nicely with each other has been quite a task. And I think Dick’s contribution to the cable industry is really difficult to measure because he’s always been the guy that kind of pulled everyone together and been pushing things forward. But digital television wouldn’t have happened without Dick—high def probably wouldn’t have happened without Dick. Certainly DOCSIS. Huge contributor to DOCSIS. IP telephony. All of this stuff. You know, everything. Dick has been there and because we have had CableLabs and because of the patient guidance and tutelage of a guy like Dick Green, it moved things along in a way that allowed it to move much faster.

If we hadn’t had the DOCSIS specification—when we first bought cable modems, we paid $2,000 a copy. The first ones we bought: two grand. We pay $20 now and that’s because of CableLabs and because of things that Dick Green pushed for. That’s hard, tedious work. Most companies are measured by their financial success. Well, CableLabs doesn’t get that, they don’t get that. Dick labored and did all that stuff and let everybody else take credit for it. Everybody else reaped the benefits. To say Dick hasn’t done the ________, fine, but he’s been a huge contributor.

Arenstein: So Mike, as we wrap up here, I think I would be remiss if I didn’t ask you to look ahead. If we were to get together in another five years, what kind of technology projects, what kind of fun stuff would we be talking about?

LaJoie: Five years might be a little short. But I think some of the things that we’re going to see—advancement in health care, enabled by technology, in the next ten years, or fifteen years—are going to be mind-boggling. I've seen some stuff here recently where companies are working to build models of diseased cells that will take your cell, your particular manifestation of a disease in your cell and build a model of it. And then they will bombard it with models of therapeutic treatment in all different kinds of doses and combinations. There’s only about 150 different molecules that medicine uses to treat people therapeutically. The problem is today, medicine tries to do this stuff through these human trials, this convoluted long process, very difficult. But by building these models with the advent of huge computers, huge storage, massive connectivity, massive bandwidth, they now can come up with solutions that are tailor-made for you that they can prove at least in a model will cure your manifestation of a particular disease and yet not impact you negatively. That’s just the beginning of it. The kinds of things we are going to see in health care are phenomenal.

I think entertainment and information will continue to expand. But the technology in those arenas, in entertainment and information, is really today and has always been held back by the licensing act and the business models. It's always been the challenge. And I think the technology is generally there before the business models get worked out.

I mean, there was always video on the Internet. When the Internet first was there, there were Usenets. The biggest storage on Usenets was video clips. They weren’t high quality, they weren’t socially redeeming but the video was there. The technology was there. It didn’t really take off until the combination of the licensing and availability of the content and the appetite then demonstrated itself, but the consumers and technology was there.

Arenstein: You know, one thing that Glenn Britt said at his retirement was that—and you’ve kind of echoed it—was that so much of what we do today and so much of what we take for granted today technologically has its roots in the cable industry. And his comment was that we should tell the story a bit louder and a bit prouder, I guess...agree?

LaJoie: I absolutely agree that without the risks of guys like Glenn Britt and Carl Rossetti and Brian Roberts and Ralph [Roberts] and John Malone. I hate to give those guys more credit than the technologists but they deserve it because they're the ones that actually took the financial risk and actually stood up there and convinced people, hey, if I'm going to spend this money, this is going to work, right? It's easy when somebody else just kind of gives me the checkbook. That makes that job a lot easier. But Intel wouldn’t be what it is, Microsoft wouldn’t be what it is, Google wouldn’t exist, Facebook. People wouldn’t be pushing photos around to each other if you didn’t have broadband, right? Think about all that stuff. Medicine wouldn’t be what it is, radiology wouldn’t be what it is.

You know, yes, the cable industry and the risks that we have taken is the complete underpinning for the technological revolution that we see today. Largely the advancement in TCP/IP, the advancement in computing technology, the advancement in storage, the advancement in networking is the greatest American export. It happens here first. It does. It happens here first and then it gets exported. Cisco, for heaven’s sake; I was at Time Warner Cable for several years. I was John Chambers’ biggest customer. For several years we were spending $1.2 billion a year with Cisco. The willingness to take that kind of risk and to make that investment and to place that bet. So you look at what that funds and the other things that they could build. And then the fact that they’re buying the Broadcom chips to do all that stuff and the Intel chips and the funding that happens. And the jobs that are created. I mean, the cable industry has what, 300,000 jobs? But if you add up all the other industries that support this industry and all the jobs that we create, it's millions of jobs. Millions of jobs. It's a fabulous industry. We should crow about it a lot louder.

Arenstein: I agree. Mike, you’ve done a lot to do that today. So thank you so much. It was a pleasure. It was great.

LaJoie: It was fun. It was good to see you.

END OF INTERVIEW

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Phil Lind

Phil Lind

Interview Date: December 2, 2015
Interview Location: New York, NY
Interviewer: Seth Arenstein
Collection: Cable Center Oral History Program

Arenstein: Hi, I'm Seth Arenstein for the Hauser Oral History Project of the Cable Center. It's December 2, 2015. We’re here in New York City with Phil Lind, the Vice-Chairman of Rogers. Phil, welcome.

For you this has got to be easy because one of the things you did in your career, your illustrious career, you hosted a live call-in show that essentially as you described it was consumers talking about complaints about their cable service. You did that for thirty years live. I mean, let's start off with that. What was that like? What kind of questions did people throw at you? How did it come about and why did it…?

Lind: Ted Rogers thought that this would be a pretty good idea, because we pioneered community television together. So I started doing it with Colin Watson of Canadian Cable Systems and then of course then we bought Canadian Cable Systems, so Colin was then in our fold. We hooked up Toronto initially but then throughout Ontario, the last delivered site, a million-and-a-half, two million customers—live. We did it once a month. It got pretty hot and heavy sometimes.

Arenstein: So what kind of questions would be lobbed at you?

Lind: Mainly service questions, of course—that’s what we do and that’s what people can complain about. You know, they constantly call up and say, “You know, I was promised a service call at such-and-such a time. The guy hasn’t come; it's been a week.” And everything like that. But occasionally you'd have things like, for example, one person complained that once a cable installer was drilling up from the basement and drilled into his piano leg and he couldn’t understand why this was so thick. One guy complained he had painted his house white, brand-new basement, and the cable guy had strung cable wire across the front of his house. These things you can't imagine. We couldn’t imagine because there were our guys, these were our people. And they watched the show, too, because they knew that as soon as we got off the show…

Arenstein: They were going to get a call.

Lind: We’d be real mad. Occasionally we’d get compliments but I think the best part about it was that people thought that we cared enough and people gave us a little extra because we were brave enough to do this and I think it was good. It's great for customers to see this.

Arenstein: Absolutely. Pardon me for dwelling on this right at the beginning of your oral history, but today it seems to me at least that we hear the concept about companies and brands of transparency and “tell people what’s going on.” You guys were doing that years ago, it seems. How did the idea for this show come about and how were you picked to be the host? You just didn’t get out of the way fast enough, is that what happened? Or did you volunteer?

Lind: No, Ted Rogers was the instigator of this.

Arenstein: You used a good word there: instigator.

Lind: Ted and I did it for a while. Ted used to brag that he'd done it for years but he really didn’t do it for years. But he really didn’t do it for years. But he came up with the idea.

Arenstein: It was a great idea.

Lind: Once we had Colin, it was all right. That was perfect because Colin was an engineer, too. So Colin understood the technical side of the—and I didn’t and still don’t, but I understood the programming side and things like that. So it was a good mix.

Arenstein: And it went on for thirty years. What was the impetus to say, “You know we've had a thirty-year run, we should stop.”

Lind: Colin left the company and then there wasn’t much push afterwards. Then when Ted died, of course, that was the end of it for sure. And now people think it's kind of corny. You know, our executives think it's kind of corny to do that. But I stand by it.

Arenstein: Last question about that and then I’ll leave you alone on this. You did the show for thirty years, three decades, from the start of the show to the end of the show before you were going to get in the studio. What was your demeanor like at the beginning of the thirty years and then toward the end? In other words, it was a total curveball. I mean, you didn’t know what was coming at you; it was a live show.

Lind: That’s right.

Arenstein: How did you feel at the beginning and did it get better toward the end?

Lind: You never knew so we were always on our guard. I remember one guy called up and said, “Mr. Lind, what are you paid? And what are you paid, Mr. Watson? What’s your bonus?” And everything. This is all publicly disclosed, but it's different when it…so the guy said, “Well, I'm paid $35,000 a year.”

Arenstein: You mean the guy on the phone said that?

Lind: So he wanted to say, “Look, you guys are well paid, how come…?”

Arenstein: My cable doesn’t work as well as it should.

Lind: Exactly.

Arenstein: But even at the end, let's say, thirty years down the road when you were going into the studio. Was there still a little bit of…?

Lind: We never knew.

Arenstein: You never knew. Little bit of nervousness or…?

Lind: Always. I mean, we were relaxed about the program, but we knew that at any moment, something could happen that would be very memorable. One time a guy called up and you know occasionally our friends would call him and one guy was—I knew a guy who could imitate everything and he was making Indian voices and this and that and the other thing. But one time we started a little bit of a laugh because we knew this guy and we knew what was coming, only this was a real call and, oh, my God. And we had on at the time that a guy from the CTRC [Canadian Radio-television and Telecommunications Commission], so we were kind of smirking and he was going like this. It was real. Oh, my God, I just about died. So we had some embarrassing moments.

Arenstein: That’s live television. Other than sports, there’s not much live television left, is there?

I guess the debates, some of the political debates and some of the new shows but even some of those are taped and shown a half hour later or something like that. All right, so we’ve skipped ahead and I apologize but you know, the thirty years of a call-in show and it sounds to me like an idea that was so ahead of its time, I had to jump on that. I’m sorry. So let's go back to the beginning. Phil, you’re Canadian-born. Tell us where you were born.

Lind: I was born in Toronto. I went to school, university, I went two years…we lived in Toronto so two years in Montreal to get to know Montreal and then two years in Vancouver to get to know. So by the time I graduated B.A., I had a pretty good understanding of Canada. Then I went to school in the States, then I came back. And I worked for a political party for nine months for so. Then I was sort of interested in the media. I thought the media was where I should end up. Ted Rogers spoke to me and said, “Come to work for me.” I sort of knew him a little bit. He was ten years older, but I knew him a little bit and I knew him to be slightly nuts.

Arenstein: Slightly nuts, OK.

Lind: Most people thought that way. So he said to me, “Look, Phil, I’ll pay you a good salary. But friends don’t work for friends so we’ll try it a year at a time, a year at a time. And we’ll see how it goes.” Right till the end we were on a year-by-year-by-year basis, but we were incredibly close, incredibly close.

Arenstein: So a series of one-year contracts.

Lind: We didn’t really sign them; this is what we thought. It was a lifetime commitment on my part.

Arenstein: I'm going to throw in a baseball reference because I know you're a baseball fan and you have an interest and we'll get to that later, but the old manager of the Dodgers, Walter Alston, also used to assign a series of one-year contracts and he did it for twenty or thirty years. Anyway, we’ll get to the baseball part later.

You were at the University of Rochester here in the U.S. And U.S. and Canada relations has been a theme of your whole life. I have to ask you; I noticed recently that you gave a huge donation to the University of British Columbia for the Lind Initiative in U.S. Studies.

Lind: We'll, I’ve done two. I've done a Chair in U.S. Studies and then this latest thing, the Initiative. The Initiative is kind of interesting because we take a really big star, U.S. star, and we put them at the campus for one term. And this year was Joseph Stiglitz.

Arenstein: The economist.

Lind: You know, from Columbia.

Arenstein: Nobel Prize winner.

Lind: That’s right. Because Yale, Princeton, Harvard, they all get these guys all the time. They just root around. California not so much and the Pacific Northwest, not at all. So I felt we should have the best up there so the students could learn from them. He or she does one public lecture, but mainly it's the students.

Arenstein: That’s great. But I wanted to get back to U.S. and Canada. I recently saw a question, I don’t know, on a quiz show or something where they were saying that Americans know very, very little about Canada and I'm guessing Canadians know a lot more about America than Americans know about Canada. So the question was how many territories and provinces are there in Canada…

Lind: You wouldn’t know.

Arenstein: I don’t know.

Lind: No, no one knows.

Arenstein: But I bet if I asked Canadians how many states there are in the U.S., most of them would know.

Lind: Fifty. There’s a tremendous knowledge of and yearning for learning about the United States in Canada. But as we'll see as we discuss when we came down to the United States, there's not a hell of a lot of Canadians who make a success in the United States. There are Canadians who make individual successes all the time, but corporations, no. Not so much, almost none. You’ve got the TD here and certain companies do, but most fail because the Canadian landscape is different than the American landscape. It's easier in Canada, it's much tougher in the United States. And what we’re trying to do with the chair and I was motivated by my philosophy by being down here, we've got to know more about the United States than we think we know.

Arenstein: You said it's much harder in the U.S. to make a success. What makes it so difficult here? Is it regulation?

Lind: No, I don’t quite know. It's the psyche of the American—it's more competitive, it's more talkative, more argumentative, more forceful, that kind of thing. Canadians are much more modest, much more low-key, don’t like to brag, don’t like to talk about themselves. Even if they’ve done a great thing, they don’t really talk about it that much. Whereas Americans do. And so they just have to learn the difference between the two countries.

We can get to that or we can get to it now. We started off at Rogers very small.

Arenstein: When you walked in the door, there were fewer than 200 employees.

Lind: 180 employees.

Arenstein: Right.

Lind: For the first ten years or so we were trying to build up our company and we did that through technical innovation and through programming innovation. And then in 1978-79, we started getting real ambitious—Ted did. So we got Canadian Cable Systems with a hostile takeover, very, very tough. And then Premier Cablevision right after so very soon after that we had like over a million-and-a-half customers. That was it. The Canadian regulatory situation, you know the CRTC said to us, “That’s it, boys. You're not going to get any more cable in Canada.” So we had to go to the States. And so I led the charge. Colin Watson was the operations guy. I did getting the franchise, working with the officials and in the programming and marketing field, too, I was. We were a great combination.

But the interesting thing about the U.S. was it was tough as hell during the franchising era. I mean, tough as hell. Now Ted said, “170 people want cable franchises, apply for 170 and you’ll probably get a couple.” I said, “You won’t get any that way—none—because everyone is competitive, everyone is tough. So let's concentrate and we’ll concentrate on cities that do not have an anti-Canadian or an anti-British bias. For example, Staten Island, no. Boston, no. Omaha, no.” We concentrated on Minneapolis because Minneapolis is fair, it's nice, it's about as Canadian as you get in the United States. And then there’s Oregon. So Portland, the same. Then we went down to California and we got a lot of franchises in Orange County. There it was a question of, “I don’t care who the hell you are.”

Arenstein: Just give me my service.

Lind: Only when people, for example, if we won the franchise and somebody on the other side said, “Well, we’ll go to a plebiscite or a referendum.” We would lose sometimes because they would say we’re foreigners so, no. It was a very delicate balance. Franchising in the States was tough for two reasons. One because it's generally tough, and two, because we were Canadians, we were outsiders. We had advantages because we had community programming and we had big sign systems: disadvantaged Canadian, foreigner. It was really tough and my relations with the NCTA were such that I was a keen member of the NCTA, but they were actively campaigning in the first cable bill for foreign exclusion. It was only because a curious incident: we had talked to a guy I remember on the Watergate Commission, Fred Thompson, 28, 29-year-old guy, Republican. Great guy. I remembered him. I went down and this was a year or two before the Cable Act was really hot, and I said, “Come work for us. Be a lobbyist for us.” “OK.” So, fine. So then a year or two later, when it came to the crunch, Howard Baker, also from Tennessee, was now elected to the Senate majority so things were moving in the cable bill but then the NCTA said, “OK, we've got to get to Howard Baker. We’ve got to get to Howard Baker to get this thing through.” Some bright guy said, “Fred Thompson was a great pal of his.” So they went down to see Fred Thompson and Fred said, “I’d love to help you out, boys…”

Arenstein: In his big, deep voice.

Lind: “I’d like to help you out, boys. But I can’t. I've got a cable client.” A cable client in Tennessee? Knoxville? Who would that be? He said, “Actually it's a Canadian.” And I said, “Oh, God. Wouldn’t you know it?” So I said to them, “OK, well, you take this out of the bill, foreign exclusion out of the cable bill, and Fred Thompson is yours…”

Arenstein: That’s horse trading.

Lind: We had to. And our political consultants down here were best friends with Mondale and with Ronald Reagan. Stuart’s mentor was our consultant in Southern California; I mean, you couldn’t get any better than that. We tried to play the angles but so did everyone else. We had a tougher road because we were Canadian.

Arenstein: Speaking about playing the angles, as you alluded to, I believe you're the only Canadian who’s ever been on the NCTA Board.

Lind: Yes.

Arenstein: I guess at some point you must have felt as welcome as a skunk at a lawn party there because people are trying to get you out because you're a member of the club.

Lind: Except that once we had put that aside, once franchising was over, we were thick as thieves. I don’t whether thieves is a good…but we were certainly great friends. But Bill Bresnan, for example, Bill Bresnan was thrown out of Canada in Sault Ste Marie. The CRTC threw him out. And Sammons in the eastern townships. Threw him out of the country. They had a burning desire to remedy things and there I come down and say, “Be my friend.” But anyway we solved everything. As soon as franchising was over, man, we were all just like brothers.

Arenstein: And you became very friendly with people like John Malone and Brian Roberts, and Ralph Roberts. Talk about—I know you had a funny story one time about John Malone always sitting next to you at the board meetings…

Lind: Because we had this interactive, this two-way system that no one else had at the time. I mean, Hauser said he did but with this Warner thing, I never saw any results of it. And what we did with this two-way thing was we’d flash every house every second. So we could see everything they were doing. We saw things, for example, like HBO would be in second or third place at certain times of the day. And Black Entertainment Television, all these things which everyone thought were feeble, lousy things or were minority, minority, minority were really very popular. So John would look down this thing: “Very interesting. I guess I better get into the programming business.”

Arenstein: Yes.

Lind: Which he did, and God bless him for it. This is one of the few terrible frustrations we had in Canada. The cable companies were not allowed into the programming business like they were in the States.

Arenstein: That must have changed, right?

Lind: Ten years ago or something. But right from the get-go, down here they were all over the programming area as they should have been…but in Canada, no, just the broadcasters, just the Canadian Broadcasting Corporation, just CTV Broadcasting Corporation. We were just the cable underdogs; we were the…

Arenstein: Utility guys.

Lind: We were worse because we imported American programming into Canada which is—even though the Canadian broadcasters programmed it, as long as it was on their networks, fine. But if we brought it in from Seattle or Detroit or from Buffalo, not fine. Not fine at all.

Arenstein: It’s funny that you're saying all this because so many times you say, “Canada, our neighbor to the north.” And I guess sometimes it's not such a friendly relationship. I always think of it as a very friendly relationship.

Lind: Of course it is, but the governments tend not to respond in the same fashion sometimes. Canadians are very worried about Canadian programming. The simple fact is out of the twenty most popular programs in Canada—sports excluded for a second—they’re all American. So all the money that the Canadian government puts into programming, and supporting the CBC and everything like that, the fact is almost no one watches it. So they watch—Canadians watch Rich Little, you know, I mean, hundreds of comedians.

Arenstein: John Candy.

Lind: John Candy. All of these people are huge successes, but they don’t watch Canadian programming very much. So Americans—it's a two-edge sword. Everyone loves it but it hurts the Canadian programming industry. That’s the problem there. But it's one of those things: we’re bordered…unless, of course, Donald Trump gets in; then we have a big fence between…

Arenstein: Who is going to build that? Is Trump going to build that or you guys going to build it?

Lind: Oh, we are going to build it. And thank him for it.

Arenstein: OK. We’re talking about relationships and ethnicity. One thing I did really want to talk to you about was OMNI Television, which was launched in 2002. Tell our viewers about—oh, you acquired it…

Lind: We acquired it then but because we were allowed to at that point. We started multicultural television in Canada. Why? Because in Toronto, south of Bloor, where we were, there were ethnics. There were Greeks, Italians, and Portuguese in large, large numbers. Now getting programming from Greece or from Italy was almost impossible because they were state-run and they would not sell their programs. This is totally different now, but in those days they would not sell their programs. So we had to, by hook and by crook really, we sent one guy, a technician—Al Pace—down to Rio where he taped for like two or three days. He had a suitcase full of tapes, brought it up. When he got caught, it was a bit of embarrassing for me, but anyway, when he did get caught. But the point is we did television in Greek language, in Italian and in Portuguese because people wanted it. And a lot of people—it’s true to this day. The seniors especially. They're never going to learn English. Canada has a huge ethnic population as you know. Now it's Chinese, it's South Asian mainly. Europeans don’t anymore. Those people, fifty and up, don’t speak any English. So unless they’ve got TV telling them things, they don’t…

Arenstein: They're out in the middle of nowhere. So I guess the reason I wanted to talk about this is because of the pioneering role that you had in ethnic television. And tying back into modern day, I was doing some research and I see that somewhere on one of your systems you can listen or watch [Toronto] Blue Jays baseball in Mandarin Chinese.

Lind: And hockey, too.

Arenstein: Hockey in Punjabi.

Lind: Hockey in Punjabi. Yes. We have to do this. I mean, we’re responding to the needs of the people. They want it, we deliver it.

Arenstein: Have you listened to a Blue Jays game in Chinese? What does it sound like?

Lind: Of course. Different. Believe me.

But it's great. You have to respond to what’s going on in your community. We have 500,000 Chinese in Toronto. We have 500,000 Chinese in Vancouver. We have 400,000 Indians and South Asians in Vancouver. Vancouver, over 60% of the people that are walking on the streets weren’t born in Canada. So believe me, ethnicity is a big part of what we do.

Arenstein: Talk a little bit about OMNI and where it is today from when you acquired it. What is it doing today?

Lind: OMNI has changed the game because it was the only form of lifeline television in their language. But now, with choices, we bring over Indian TV, we’ve got the Great Wall package from China. I was over there two or three times, bowing and scraping to get this package. So we bring a lot of homeland television and so do our competitors. It's different. OMNI almost struggles now because now…

Arenstein: There’s so much competition.

Lind: There’s so much. It's changing, everything changes.

Arenstein: It kind of validates the idea that you had.

Lind: Well, it certainly does. It was, again, Ted’s idea. The salesmen would go out and promise these things and of course, they had no authority to promise because we couldn’t deliver it. But they—because of commission. So we had to deliver it in the end. And we did.

Programming has always been a very central thrust of Rogers. It was a central thrust in Canada, differentiated us between us and our competitors. In the States the same way. We had community programming, things like that that no one else did. And in the end, even when we set up our systems in the United States in San Antonio and places like that, we were number one in advertising, and number one in pay-per-view. So we put the first pay-per-view—we were the first NBA pay-per-view and the first NHL. NHL in Minneapolis with the Stars—what were they called?

Arenstein: The North Stars.

Lind: The North Stars. And then they moved to Dallas. Then in Portland with the Trail Blazers; we were the first NBA and the first NHL pay-per-view contracts in this country. And the leading advertiser. We had two or three dollars in those days—that was high. Two or three dollars per month. That was very high compared to any other system in the United States. So we were always pushing on the programming side.

Arenstein: Since we’re speaking a little bit about sports here, as you said, eventually things changed in Canada and operators were allowed to get into the programming…

Lind: We were always allowed to own a team. We just weren’t allowed to own a network, a sports network. So the team—Toronto Blue Jays—Ted had made an offensive into Québec and had bought Vidéotron, and I said to Ted, “I don’t know; the Québec government, it doesn’t allow anybody who’s non-Québecers to own this thing.” “Oh, yes, we’ll go down and see the ministry…” We saw them and I was still unconvinced. Eventually they wouldn’t sell, they sold Vidéotron to Québecor and we were given $150 million booby prize. That was the breakup fee.

So I said to Ted, “Let’s buy the Blue Jays.” So we bought the Blue Jays and that’s how that started. But then I said, “Well, there’s TSN.” Which is the sports network, the ESPN of Canada. “So why don’t we start something?” And Peter Barton and I concocted a Sportsnet for Canada. And that was very difficult because in Canada, unlike the United States, every service has to be licensed. In other words, you can't start a service and go on the air. You have to get permission from the Commission. Of course, the monopoly guys say, “Like TSN—they don’t need anything. We provide everything. How could they possibly want anything? There’s nothing there.” We had to try once or twice. We had to apply under the CTV network because Rogers could only own 20% and the Americans could own 20% so there's 40. And we had to have another 40, so there's CTV at 40 and then we got Molson’s, which was the rival to Labatt’s for the last 20%. So that’s how Sportsnet started because we started it. We started YTV, we started all of these things, but we had to be under 20%. It was just crazy. We would have been so much better served if we had—we would have been a lot wealthier too, of course.

Arenstein: Tell me about owning the Blue Jays. It's been about sixteen years now, is that right? 2000?

Lind: Yes.

Arenstein: You just had a very good season.

Lind: Yes, we did, we had a wonderful season. Marvelous season. Paul Beeston and Alex Anthopoulos. It was Cinderella; it was wonderful. We could have won that whole thing. We were ninth inning, Kansas City; we had two men on, one out. A man on third.

Arenstein: And [Josh] Donaldson was up, I believe, right? It was the guy you want up there, the MVP.

Lind: I know, I know.

Arenstein: Jeez, that was too bad.

Lind: So we lost that game. But if we’d won that game, we would have won the World Series, too, probably because both either team in the AL, the American League, was so much better.

Arenstein: Better than the Mets. Well, I'm a big Mets fan so you kind of—but I love the Blue Jays, too. In fact, I listen to the Blue Jays on Rogers Sportsnet on the radio on my phone because I have the MLB package…and I like R. A. Dickey because he was a Met so that’s why…

It’s fabulous. And you have a great radio announcing team, too.

Lind: But even in streaming, we were the first baseball team to stream baseball. Why? Because we own the team, we own the stadium and we own the network.

Arenstein: That’s right. The Rogers Center.

Lind: Down here, very few people own three. I mean, nobody. So it gets far more complicated.

Arenstein: Let's talk a little bit about making a bet on baseball in Canada. Montreal had a difficult time with it, hockey I would assume. Hockey and lacrosse, I think, are the two main…

Lind: Lacrosse, no.

Arenstein: Not anymore?

Lind: No one cares about lacrosse. Hockey is king but last year baseball was king. But the important thing about the sports is, when Rogers and I got into sports, it was simply because we realized that sports, outside of news, was probably the only thing that you had to watch live. So you had to have cable to watch sports when we started—you had to have cable. You couldn’t get anybody else. You couldn’t retrieve it. No PVR package, DVR in the States you call it. You couldn’t retrieve it; it was live. And that’s why we were involved in sports and in such a big way. Now, last year, we committed to an NHL package, which is unbelievable. Billions of dollars, over a billion a year. Because it's live. And of course because Canadians love hockey.

Arenstein: Exactly.

Lind: We love hockey.

Arenstein: But let me ask you this. We’re talking about hockey and television. I think hockey gets better on HD, but I'm sure you’ve been close to, down near the ice and watched a hockey game and then watched it on television. It is so much faster in person. I mean, doesn’t it lose a lot on television? On television you could sometimes see the speed but when you're there in person, you realize, “My goodness!”

Lind: I agree.

Arenstein: Is there anything that television can do?

Lind: Well, a lot of Canadians have seen NHL in one way or another. One game, three games. Canadians know hockey so they’re sort of used to—they don’t understand maybe the quickness of these athletes; when the pass comes, they get a deke and everything like that. But they understand the dynamics so I don’t think it's a problem. And we’re getting more, we’re going to be 4k now, broadcasting in 4k…when Fox had that puck thing…

Arenstein: With the orange thing around the puck?

Lind: You don’t need grade 1 or grade 2 in hockey in Canada. We’re born with it, we understand what it is. But American football, that’s beautiful, too. Beautiful.

Arenstein: Is there a big following of American football in Canada?

Lind: Yes, amazing following.

Arenstein: You have Canadian football.

Lind: We tried to buy the Buffalo Bills. We were very close to Ralph Wilson and it just didn’t quite work out because in the end, there was a guy from Buffalo who would pay any amount of money, but he was from Buffalo. And he promised to keep the team there. The league has finally learned you don’t move teams very readily. It's very, very awkward for them. We still want a team in Canada. And southern Ontario is a hotbed of NFL. Toronto is like three million basic and two million surrounding…we’ve got the third, fourth, fifth largest population base in North America. So of course we want an NFL team.

Arenstein: We mentioned Brian and Ralph Roberts, but you didn’t really talk about them. Tell me about them…

Lind: They're both tremendous, tremendous guys. We knew Comcast early on, in the Dan Aaron days. That’s a long time ago. But they didn’t really compete very much with us. They were not of the size that we were. But we got closer and closer to Comcast. Ralph was a great friend of Ted’s and mine. Young Edward, Ted’s son, worked for Comcast so there's very strong ties there between our two companies.

Arenstein: Let me interrupt. I think I read that you said that Brian could have been the head of Comcast even if his last name was Rogers. Didn’t you say that once?

Lind: That’s exactly right. And I have to be careful about what I say, but sometimes the second or third generation don’t have the same push that the first does. In Brian’s case, it was even better. So yes, that’s absolutely true. Brian could have been the president of Comcast even if his name had been Rogers.

Arenstein: You look back over your career, Phil, and we can't even do it justice in an hour. It's very difficult. What are some of the things that stand out for you when you look back? And I know you don’t look back—I know you're always looking forward. You're still active, you're doing all kinds of things, you're interested in all sorts of things but if you take a little bit of time to look back, what are some of the things you look back on fondly? You talked about a lot of the hurdles and how difficult things were, but there have been some great things, too. What are a few memories that you treasure?

Lind: The memories that I treasure are the victories that we won in the United States and in Canada. We applied to the Commission to get competition in long distance and they have a monopoly in Canada. A monopoly. They did here, too, with AT&T. We won the right to compete. Now we lost $500 million in trying so we didn’t know how to compete, but we won the right to compete. Then Ted said—because we made over a million dollars in the U.S., which in those days was a lot of money. So the other $500 million he put into Cantel, which is a wireless company and then eventually through a series of deals, we owned 100% of it. So now we’re Canada’s wireless provider, over ten million. We’re the largest provider of cellular services in Canada, but by quite a ways.

Think about it: a lowly little cable company with one franchise in Toronto and one in Brampton, Ontario, and all of a sudden, we’re the largest telecommunications company in Canada. It's an amazing story. Why? Because we had ambition and drive, and Ted had the guts to risk everything over and over again to make the company a great company. And he had a lieutenant or two who would say, “Yes, here we go.” It didn’t mean that Ted and I used to argue all the time. We used to fight all the time, but he listened, I listened and we compromised but it was mainly Ted’s ideas, mainly Ted’s relentless energy that made this company such a great company.

So what have we done? We've put Canada on the map in the States. That’s probably my number one accomplishment, I feel, anyway. Because no one else could. I mean, Maclean-Hunter a little bit and Cablecasting, I think, a little bit. But they bought the systems or were bankrupt or whatever. We really went out and competed and won. We were really, really good. No other Canadian company was anywhere near us. We did something that most Canadians could not do. We made a real stand in the States. Unfortunately, we sold. Ted and I disagreed on that. We would be a very large company in the States today had we not…but we wouldn’t have had the wireless company. Ted eventually, when we went down to Minneapolis, he said one time, “You know what? I'm not sure. I was right, I did this, I got this. We would have been a great company in the States, too.” And I said, “Absolutely.” Because Ted had the magic. Ted, he knew how to orchestrate deals as well as anybody in the States, including John Malone. And Malone is great and Roberts is great. And Tom Rutledge is great. There’s endless numbers of great guys and people in the United States. We’ve still got, for example, we’ve got Missy Garner still working for us. She’s from San Antonio. She comes up every two weeks, every other week to Toronto to—we’ve been out of San Antonio for twenty some-odd years. There's a great camaraderie between our country and yours.

Arenstein: I think I would be remiss if I didn’t ask you about—again this is kind of Canada 101 for Americans—to compare maybe the regulatory landscape in Canada for television and the regulatory landscape in the United States for television. What are the big differences? What do Americans not know about Canada and television and regulation in Canada?

Lind: I think we discussed it earlier: the protection of Canadian broadcasting, Canadian culture, Canadian content. That is essentially the difference. You had the FCC protecting NBC, CBS…that’s for sure. But they didn’t protect it for their American content ratings, they protected it because of economic interest. And Canada, it's just because of the political and sociological—that’s essentially the difference. CRTC has come up with some cockamamie ideas and so has the FCC. And they talk. That’s the fortunate or unfortunate…I'm not sure if it's good or bad. Anyway, I think that’s the essential difference between the two.

Arenstein: So let's end on the personal side. When you have a few minutes to spare, what sort of television, what kind of activities do you like to do? What do you like to watch? Any hobbies?

Lind: I'm very interested in contemporary art. I'm very involved in that. I'm on the board of the Art Galley of Ontario, the art museum in Ontario, the art museum in Vancouver, on the Canadian board of the Albright-Knox, the Buffalo art museum. I love that. I love art. I watch mainly sports. That’s mostly what I watch. I never watch anything else on TV. News, news and sports. That’s about all I have time for. I love my children. I have two kids. My former wife is dead, but I have a very active life. And I travel a lot and I've got lots of friends and I'm here and there and all over the place.

Arenstein: Sounds like it.

Let’s talk about legacy. What do you want people to say about Phil Lind? What did he do, what did he stand for?

Lind: Well, I think I stood for, in fairness, women in the industry. I was a tremendous promoter and always have been. Our latest roster of executives at Rogers is like all men and I think it's appalling frankly. It's appalling. And the winning in the States was a big deal for me. A big, big deal. I wanted to show that we could do it and we did.

Arenstein: Phil, you’ve talked about so much of your career. I know there's another big part of it that we really touched on but haven’t gone deep into and I want to correct that now. You’ve been on boards, you’ve been on associations, you're on the board of the people who are paying the bills for these lights here, the Cable Center in the United States. Talk about some of that.

Lind: I think associations are very, very important. And the cable association has been incredibly important because we have all stuck together. And we've accomplished a tremendous amount because we've stuck together. Anytime there are lone wolves going around, that hurts the industry. We’re the poster child for an industry that sticks together. In the Canadian Cable Association—because we were always under fire from broadcasters and everything else—we stuck together and I was chairman, Ted was chairman of the Cable Association in Canada. In the States I always really wanted to be on the NCTA board. I finally got on. I think I was a real contributor there to the NCTA. I really loved their focus in Washington and their interest in politics generally. Bob Packwood, because it was Oregon, was a good friend of mine. [Barry] Goldwater, because we had a system in Arizona…Henry Cisneros in San Antonio was hot eventually. All of these people were important not just to Rogers because we served the areas, but because I could then muster them for the NCTA. The cable association is just one continuation of that. We've got to think about what we do as a cable industry and work that way.

Arenstein: I know that having women in leadership roles is important to you. And this year, the 30th anniversary of the Cable Center, we finally have a woman running the Cable Center, Jana Henthorn.

Lind: Finally. That’s right. Formerly of A&E.

Arenstein: Yes, that’s right.

Lind: Cable: you know, we didn’t talk about that, but what has cable done for the States, good and bad? Good—it's provided so much, so much choice for Americans and Canadians. So much choice. We never had choice before. Cable is choice. And the bad thing is, these crazy shows are beyond belief. Some of them because, I guess, when you have too much choice—you can't have too much choice—but so that’s the legacy of cable for sure. We expanded people’s knowledge base and we did it in such style.

Arenstein: And with broadband as well.

Lind: Broadband is just a continuation of cable. And broadband will be the future. We used to say cable is the future, now broadband is the future. It's just as easy as that. Wireless and broadband put together, can't beat it. One thing I say to the cable industry, because I tell the captains all the time, get into the wireless business, guys, get into the wireless business like we are. Then you’ve got everything.

Arenstein: One thing we didn’t touch on, Phil, is that a number of people who are quoted and our researchers say one of your secrets, or maybe not the word secret, but one of your reasons for success is that you're such a good listener.

Lind: The chairman of the CRTC, the first chairman of the CRTC, Pierre Juneau, used to say, “Always understand the logic of the other person’s position. You may hate him, you may think it's ridiculous, etc., etc., but at least understand the logic where he or she is coming from. Then go out.” I think that’s a very important thing. Once you get to be a big shot in the industry, whatever industry it is, for some reason most people stop listening. I don’t know why that is, but they do. They think they know it all because they’ve come to the top, they think they know it all. It's not true and you should always listen and try and understand why this person thinks the way he does.

Arenstein: Phil, this has been a pleasure, this has been educational, it’s been entertaining, it's been fun. Thank you so much for doing it.

Lind: It’s been great. Thank you very much.

END OF INTERVIEW

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Kenneth Lowe

Ken Lowe

Interview Date: Friday February 04, 2005
Interviewer: Steve Nelson
Collection: Legacy Collection
Note: 2017 Cable Hall of Fame Honoree

NELSON: Ken, let's just start out back when you were a kid. What role did TV play in your life?

LOWE: Extremely important role. I was raised in a rural area of North Carolina and my dad happened to have one of the first television sets in the neighborhood. So my early memories were of neighbors showing up literally sitting throughout the house to watch this little small black and white box and then these pictures flying through the air and it was truly a miraculous experience for a lot of those folks, the first time in their lives they'd ever seen television. I don't recall some of the early shows that we really saw sitting around the television, but I do remember it was a focal point. It was the talk of the neighborhood and so immediately at my young age it became this magnet that just drew me and I got hooked on TV very early.

NELSON: And did you ever think at that point that this was something you'd get involved in? Obviously it's an entertainment and a social tool that there it was, but did you have any early ambitions to be in the TV business?

LOWE: You know, I really did – media business in general. I was drawn to TV because it was my window on the world. I grew near the fictitious town of Mayberry, North Carolina, which was actually Mount Airy, North Carolina, but because of living in a rural area, growing up on a tobacco farm, you read a lot, I listened to radio a lot, especially out-of-market radio stations from New York and Detroit and Cleveland and the television was my mind's eye. It was literally my window to the world, so I got to see things and experience things that my mom and dad's generation didn't. They would go to a movie theater to see news reels and there it was right in my living room. So it had a tremendous influence, so much so that when I was about seven or eight years old I built a radio station there in one of the back sheds of the farm and along with some neighborhood boys we were able to jack up the power where it would actually broadcast two or three miles out into the neighborhood. Our audience was primarily cows and chickens; there just wasn't a big population. But I was hooked on it early and I loved radio, I loved television, and I knew even at a young age this is what I was going to do.

NELSON: So the FCC didn't come after that station?

LOWE: No, you know, Westfield, North Carolina was not high on the FCC's list at that time but it was a great experience. One of the guys that helped me build the station was a 45 RPM – it dates me, I realize, but those were the small records with the big hole – he collected those and so as popular music really started to roll into the early '60s, when I was about ten years old, we're playing rock and roll music and we had a rock and roll radio station and it was a tremendous amount of fun, but I knew then, I knew in my heart this was a business I wanted to be a part of.

NELSON: So you were dee jaying at that point?

LOWE: I did. I ended up working my way through high school and then college doing commercial radio. My roommate in college was a guy named Rick Dees who went on to be a very successful radio personality. I tried to convince him early on there was no future in that. Fortunately he didn't listen to me. But I always enjoyed more the management side and also in college my real goal, even though I was working in radio, was to direct movies and I did about eight or nine what we call "college" movies. They were 16-mm, 12-15 minute black and white features that you really just kind of cut your teeth on. My goal was to transfer to University of Southern California and go to the film school.

NELSON: Where were you at the time?

LOWE: I was at the University of North Carolina Chapel Hill, but out of that it gave me a very good understanding of A) how truly difficult it is to do movies and B) maybe that was not where my talent truly lies, so it pointed me more back towards radio and television and I continued to work in those mediums once I graduated from school.

NELSON: So what was your first job? You got out of school; did you look for something right away in the radio business or...?

LOWE: No, you know, all through college I was a radio personality and making decent money, much better money sometimes than folks I was in college with who were graduating going into certain fields of endeavor and whatnot. So I had a pretty solid job and I became a program director for that radio station. It was in Raleigh, North Carolina.

NELSON: While you were still in school?

LOWE: While I was still in school. So when I graduated I had a career lined up, and at that time I thought it was going to be – for the foreseeable future it would be radio, but ultimately I wanted to get more onto the television side, the production side. I had a real desire probably because of my background and wanting to do movies to get into television production. So radio, you know, I was a young guy, it was a great way to meet women, it was a hot medium, we got to MC all the great concerts and I met a lot of great rock and roll acts, but it was really – and I knew it at the time – it was not where I was ultimately going to end up for my career, but it was a lot of fun at the time.

NELSON: So how long did you stick with that?

LOWE: I was in radio through my mid to late 20s and then in 1980 I joined the E.W. Scripps Company, at that time overseeing their group of radio stations.

NELSON: So had you had any radio station management experience at that point, because you talked about you seeing yourself more on the management side of the business?

LOWE: I did. I moved over to management. I was overseeing a couple of radio stations for a company called Southern Broadcasting, which was bought out by Harte-Hanks Broadcasting and then I went with Scripps Howard Broadcasting in 1980 to oversee their radio group and also with the understanding that they would allow me to move into their television side at some point, and that happened three or four years afterwards in the mid-80s. I moved over to programming and marketing for the Scripps Howard TV Group.

NELSON: What did that entail?

LOWE: At that time it was everything from...

NELSON: This was for their television stations?

LOWE: Yeah, this was their television group, which was one of the older TV groups in the country. The Scripps put the first television station on in Cleveland, Ohio, WEWS; Cincinnati, Ohio, WCPO. WEWS in Cleveland stood for E.W. Scripps, the founder of the company and CPO in Cincinnati, the Cincinnati Post, which is the newspaper. So it had a great heritage in the broadcasting history. Don Paris who ran the broadcast group was a true genius. He was the one who hired Dorothy Fuldheim, one of the really great TV interviewers of all time, a great journalist, and really he created what became Good Morning, America. He started in Cleveland with the Morning Exchange and ABC came and studied that and launched Good Morning, America out of it. So it was a great broadcast group, TV broadcast group, a great heritage, and it gave me a tremendous learning curve in getting into the television business. Scripps was a big believer in local programming and they really gave me an opportunity to start doing local programming beyond just news and public affairs where we did a lot of one-off specials. We'd go into any one of out markets and do some specials that heretofore you didn't see that much on television stations, so it really whetted my appetite to get into more programming and kind of opened my mind up to what opportunities might lie beyond just TV broadcasting.

NELSON: Now in terms of these local productions, were you involved with the production side – producer, executive producer – or were they just part of the business that somebody else did and that you aired?

LOWE: Well, you know how it is, you wear many hats and actually I enjoyed it. I played camera man sometimes, I'd play director, I'd play executive producer, but ultimately I ended up being exec producer of most of the specials. It seems the crew is always more talented than me so somebody else could do a better job with the camera, with the sound, with the lighting, but I knew what I wanted and it was maybe back to my roots of when I wanted to direct movies, it was easier for me to direct and it was easier for me to produce than it was to actually have hands-on experience. I just wasn't that talented in those areas and fortunately I recognized it.

NELSON: So where did the shift come from being at the television group? What happened next?

LOWE: As the '80s began to wind forward – and I was also in charge of buying all the programming for the television stations, all the syndicated programming. I'd be the guy that'd sit down with Roger King and cut the deal to get Oprah, or with any of the guys at any of the major studios when there'd be a syndicated show that we'd end up buying. When you're buying for nine or ten television stations you have some buying power, you have some leverage. So I got to know those guys in that end pretty well, but I also began to get quite frustrated with some of the programming that was being brought to our stations. I felt in some cases that they were going for, in many instances, the lowest common denominator. I don't want to sound like I'm on a soapbox, but about the time they were bringing me the Morton Downey, Jr. Show and the Jerry Springer Show, I felt we were starting to take a turn for even below the lowest common denominator and I always felt that there was an audience for quality programming that aimed a little higher, but because we were in the production business, we were at the mercy of buying these syndicated programs, it was very frustrating. The other thing that really struck me was when the syndicators would get a hit, as in the case of Roger King, Roger's a friend of mine, but as Oprah became more powerful you found negotiations when the show was up for renewal very much on his side of the table. He had all the leverage and if you didn't want to pay a 10, 15, 20% increase, there was a competitor across the street who would be glad to. It was a valuable lesson for me because I knew that to totally be in control of your destiny you had to own the content and I truly believed that content was going to become even more valuable beyond just airing on a local television station or a national television network.

NELSON: Why did you think that?

LOWE: Well, it was quite obvious that media was going to continue to fragment. You know, the old saying is "We always tend to overestimate technology on the short-term and underestimate it over the long-term". I really envisioned a very interactive future where viewers would have more control over the programming, and part of that was just, I think, growing up in the era that I grew up in. Technology was forever changing. For anyone else that thought, boy, the 8-track tape is where it's going to stop, along came cassettes, along came CDs. You knew that it was just going to naturally happen on the video side. Scripps also owned some cable systems. We had about 700,000 cable households. While the cable guys were down the hall from me I picked up quite a bit from them just about cable systems and the technology. As a company we were constantly upgrading, building bigger pipes to the households, and if you sat and talked to some of the technology people and let them dream a little bit, the far-fetched world of interactivity and hundreds of cable channels in my mind was very much a reality. So while I'm sitting there programming our television stations, I said, "I've seen this movie before and it's called FM radio." I'm old enough to have been a guy that was on AM radio when FM came along and most people scoffed at FM. For one thing, it was formats that were narrowly targeted to just one category, be it all classical music or all jazz music or all country music, while on AM we were playing Top 40, we were playing a little bit of everything.

NELSON: Which was a lot broader in those days.

LOWE: Yeah, it was very broad. It was broad and FM was not. FM was targeted, it was niche and it was a valuable lesson. I remember thinking, okay, this is going to be competition but it will never, ever have any huge impact on AM radio. Well, the rest of the story is obviously it did and I saw the same situation with cable networks and how they were going to impact and fragment broadcast television. A lot of folks in the broadcast business at that time – I'm talking about the '80s, even into the early '90s – didn't foresee that, in some cases because they didn't want to. They were in denial, but if you go back and look at some of the early success in the cable network business it was a lot of ex-radio guys. Bob Pittman and Lee Masters, also known as Yarrow Mawn, his real name, had really made their mark in cable with MTV and VH1 and some of the early targeted, what people were referring to as niche networks. I thought these are very broad mass appeal networks. In those days, people didn't consider them that.

NELSON: Yeah, they were the narrow-band of the day.

LOWE: Yeah, yeah. In some cases it was just moving broadcast television over to cable, right? But really the future of cable in my mind all along was targeted, well-defined, 24/7 you get the same programming around the clock. The broader appeal, back to the old AM radio analogy, had no defined genre, it had no defined brand and if you look back and you look at the truly successful networks, cable networks, now sitting here as we do this interview, it has tended to be the ones that were news, sports, information. The viewer knew what they were going to get 24/7. So with all of that background, and then a little bit of a frustrated architect thrown in in having built some houses in different parts of the country as a moved around, avocation was clashing with vocation.

NELSON: Talk about that because I know I've read some interviews you've done and you and your wife would buy a house, fix it up – you'd be the architect, I think she was the designer/decorator. Talk about that experience and part of your frustration was the lack of information that was available.

LOWE: Well, it was quite obvious to me, it probably was to a lot of people, there was just nothing earth shattering, I think, about the fact that the MTV generation was growing up and as they did they were getting married, they were starting families, they were either buying their first house, they were buying a house to be remodeled, and it was just so obvious that those dots were going to get connected and as I built houses and moved around the country – and part of it was I loved the whole process, I'd worked with my uncle in high school who was a contractor, and it one point I actually thought about becoming an architect. I still love the whole process, but it's a very complicated process. I always tell people who have never built a house, "Get ready" because it's like taking a final exam with nothing to study and you're going to have all these questions and you're not going to have answers, or they're not going to be readily available, so the building process can be extremely frustrating. I remember I used to get a cup of coffee and walk down the aisles of a Lowe's Home Improvement Warehouse or a Home Depot and just talk to people. To me that's still the best research you can ever do, just ask people questions. I would ask them if there was a television program – I didn't even say a cable channel because that gets a little beyond people's imaginations – if there was a television program that was about this and about that, and people would say, "Oh, I would love to see that. I would love to have a resource beyond magazines, beyond books," because it was a television generation. So it didn't take a rocket scientist to understand that the MTV generation was going to be wanting something beyond their MTV and in my mind it was just obvious that the next iteration was a channel aimed at that category, at shelter.

NELSON: Well, you know, you say that it's not rocket science, yet a lot of people – I'm sure you heard this phrase before when you were launching – would say, "Who wants to watch paint dry and grass grow?"

LOWE: There was a lot of resistance.

NELSON: Yeah, because a lot of even the niche networks like MTV aimed more music videos at younger people or CNN with news, aside from the news stations everything else was just pretty much entertainment. You're looking at something that is informational and perhaps somewhat entertaining at the same time – this is in the early days, I know you're a lot more entertaining now – but maybe it wasn't such an obvious leap. People would say, "What kind of a network is that? We want to have a network with fun programming on it. Who wants to sit around and watch somebody drive nails into a 2x4?"

LOWE: That's a great question because I think a lot of people missed the fact that informational programming does not necessarily have to be non-entertaining and not fun. I remember an example I gave an early cable operator who asked me that very question. I said, "Have you ever been walking down the street and there's a massive constructions project going on and they're building a building and the crane is lifting the steel up and people stop and just look up and watch?"

NELSON: They build little windows in the fence!

LOWE: Yeah, almost with childlike wonder, and I said, "You know, as a population we are entertained by people who can do great things with their hands whether it's sculpting or building. Who of us doesn't enjoy watching a master carpenter actually create something just out of nothing?" Norm Abrams in the New Yankee Workshop, people just sit and stare almost like you're looking at an aquarium just to watch a guy with a tabletop saw. So I never really felt that the information we were going to be putting on to HGTV or into these programs was not entertaining. It was both informative, it could be entertaining, it was all your perspective, but remember, in my mind we weren't going for a mass audience. I think the one thing about HGTV that still surprises me to this day is how big an idea it's become. People ask me, "When you came up with the idea for the network, did you truly think it would become this mass appeal, this big a brand?" and the answer is no. It's not because I didn't think it was a big idea, it was because I think that anybody who creates something is more focused in the target and the delivery of it. If it works... if it's Starbucks it works, right? But I bet if you asked Howard Schultz early on did he ever think Starbucks would become the brand it's become, I think he'd probably say "No, I expected it to really super serve people who were really into coffee." I expected HGTV to really tap into the passionate people that were interested in this category. Now, as it turns out we made the network a little bit broader and early on that was one of the difficult tasks putting all of these under one brand, but it really was five networks in one. It was home repair and remodeling, design and decorating, hobbies and crafts, there was another category, and I think gardening and landscaping if I didn't mention that already, but basically five categories that we put under, if you'll pardon the pun, one roof because people have different interests in a home and people who are necessarily really fixated on home repair and remodeling, the 2x4s and sawing and nailing maybe are not as interested in design and decorating. So putting it all under one brand was a bit challenging, but I really felt at some time in the future you could almost break it apart and as fragmentation continued and depending on the technology, that one network could possibly become five different networks that are even more super-targeted. So in my mind it was a narrow, fairly defined, focused delivery method that hit a bull's eye.

NELSON: It was based upon the growth of technology and continued fragmentation, which is really what your vision was. So you're harboring this idea, you're wandering around the aisles of Lowe's, you're sipping on your coffee, you're asking people questions. When did you get up the nerve to broach this notion to Scripps? It's one thing to talk to some guy in the aisle at Lowe's – and by the way, I should say that when we talk about Lowe's we should make it clear that there is no connection.

LOWE: I'm still trying to hopefully find a connection, to go to North Wilkesboro and claim my rightful place in the Lowe's family, but no.

NELSON: But you haven't discovered it yet?

LOWE: No, no, no. My dad keeps saying "You're the Lowe's of the tobacco field dynasty, not the home improvement."

NELSON: I just wanted to get that on the record that there was no connection.

LOWE: No, no relationship, unfortunately.

NELSON: Okay, so as I was saying, you're harboring this idea, at some point you decide, "Okay, I have to make a pitch."

LOWE: Well, during the '80s it was a hobby. I'd get an idea for a show on my network, which existed in a cardboard box in my basement and it was a real outlet for me – "Oh man, this would make a great show on the network" and I'd write it and toss it in the box, somewhat therapeutic. I never really envisioned that box becoming reality.

NELSON: This was a hobby.

LOWE: It was a hobby, but I kept saying to my wife and anyone who would listen, "Boy, you know, I don't understand why somebody hasn't launched this already." It was just so obvious. My wife, at one point, said, "Will you just please stop talking about this? Enough already." But a funny thing happened on my way to my television career. There was a change in management at Scripps. My boss was dismissed and basically I was to be let go and it was one of those life changing moments that I had not expected. You rationalize and say, "Why me?" and just the wrong place at the wrong time, but it truly gave me the opportunity to say, "You know, maybe now's the time to try to take that cardboard box to reality." So it really was about getting fired.

NELSON: Were you still on the job at this point?

LOWE: I was still on the job.

NELSON: But you knew it was tenuous.

LOWE: It was tenuous and as a matter of fact, my boss at the time, Frank Gardner, who came in to take over the television group from the gentleman who was fired that I'd worked for, he and I sat down, we'd been friends for a long time, and he said, "I'm not sure there's going to be a position here in the reorganization," and I said, "You know what? I'm not sure there should be. I think we agree and let's make it easy on each other. I've got other things I want to do. Work out a nice settlement and I'll be on my way." I think Frank was somewhat shocked by that.

NELSON: It's too easy, right.

LOWE: Yeah, this is too easy. What's wrong? Over the course of the next several weeks while we worked out the separation package, if you will, I asked him, I said, "Would it be possible that the company could send me to a cable convention, the NCTA?" and he said, "Why would you want to go to that?" I said, "I just always wanted to walk around that floor." He said, "Sure, no problem. That can be part of your package." One thing led to another and we started talking. Frank was a long-time friend...

NELSON: How did you know him?

LOWE: He'd worked at Scripps; he'd been a general manager of our Cincinnati television station and more or less reported up to me on that side. So he'd reported to me at one point, I was now reporting to him, and a great human being. Frank finally one night, I think he'd gotten enough wine in me, I'm not sure, convinced me to tell him what I was up to. I'd been very quiet about it because I didn't want to ever have in anybody's mind it was a conflict of interest just because I'd kind of worked on this idea. I never worked on it on the job, always at home. So to make a long story short, when I told Frank what I was planning to do, to go out and try to raise some money to start this cable network he said, "You know, you can't imagine, but Scripps, I think, would really be interested in bankrolling this. Why don't you stay here and I'll help you," which he did. Were it not for Frank Gardner there would be no HGTV.

NELSON: And you weren't expecting this? You weren't gearing up to make the big pitch to Scripps?

LOWE: No, Steve, probably one of the last companies I would've pitched would've been Scripps and part of it was it just wasn't in the culture at the time. We were a company that had been accustomed to acquiring assets. You buy a newspaper and you get a printing press and you get a building. You buy a television station and you get a license, you get a tower. To actually invest in something that A) didn't exist, was in one guy's head, you didn't need a license, you didn't need a franchise, you just leased satellite space and then went out and sold it, it was so in my mind...

NELSON: No physical assets.

LOWE: Yeah. It was something that would be very, very hard to explain to that board. As a matter of fact, when Frank told me he said, "Do you have a presentation?" I said, "Well, I'm working on it," I completely changed the presentation to gear it to the board. I took a newspaper and took sections of the newspaper and on the front section I put a big label that said CNN, the sports section CNN, and the comics were the Cartoon Channel, and I went through the whole paper with the board and I said, "Okay, think of a newspaper as cable networks and the sections of the paper." I pulled out the home and garden section and I said, "For example, here's one that nobody's done a cable network on," and I built two magazine racks and went out and bought tons of magazines in this category, in the shelter category, in the home category, from long time publishers like Meredith, Conde Nast, Hearst, and I put all these magazines on two big racks, we rolled it into the board room ahead of time and I covered it with some sheets and at the appropriate time in the presentation I pulled the sheets off and said, "This is over five billion dollars in advertising revenue." I really had to display to the board that there was something to go after and they understood, okay, this is all in print and there's nothing on the television side.

NELSON: And this is a very defined and heavily exploited marketplace. They understood that.

LOWE: Exactly, exactly. They understood that. They understood that it really wasn't being targeted from a video standpoint. There were a few shows in those days – This Old House and New Yankee Workshop and others rumored to be starting, but as syndicated shows, but not a cable network dedicated to it. Much to my surprise, the board okayed it. We asked for 25 million dollars to start this network. The board approved and I remember Frank and I walked out of the board room...

NELSON: They approved it right there?

LOWE: Right there!

NELSON: That must have been a shock.

LOWE: It was a shock.

NELSON: You expect the "Well, we'll take this under advisement and we'll get back to you."

LOWE: Yeah, "We'll get back to you, kid. Don't call us." Frank and I walked out of the boardroom and there's a movie The Candidate with Robert Redford and Peter Boyle where Peter Boyle as the campaign manager says, after he gets elected, turns to him and says, "Okay, now what the hell do we do?" Well, Gardner turned to me after we walked out of the boardroom and he said, "Oh my God, now what the hell do we do?" I said, "We launch a cable network."

NELSON: So the board says, "We're going to give you 25 million bucks." Do you have a business plan? Do you know what you're going to do with this money?

LOWE: We had a business plan; we'd actually been fortunate enough to be introduced to a young man, Brian Owens, who was one of the guys that really developed the E! Entertainment Channel. Brian had since left the business and I think was teaching at the University of Texas at Austin, but this wonderful renaissance type guy who for some reason took a liking to Frank and to me and probably just out of pity and mercy said, "Let me help you guys," and really helped us develop a business plan. We really didn't have any experience in the cable network business. Our experience and my knowledge base was greatly driven by what I was able to garner from the guys that ran our cable systems down the hallway and trying to pick up as much information as I could from them. I talked to a lot of people. I tried to become a sponge about the business. I had a pretty good handle on production, production costs and amortization and putting together a cable network. I had absolutely no knowledge base on how to get it launched and how to get it distributed. So we put a business plan together. In hindsight, it's the old cliché, Steve, probably had I known how difficult it truly was I would never have done it, but naïveté is a wonderful motivator.

NELSON: Entrepreneurs have to be naïve, I think, to some degree.

LOWE: Oh, absolutely, and you have to have this just unbelievable faith. In hindsight, I don't think at the time I realized it, but a lot of doors were closed in my face, a lot of people scoffed at the idea. One of the big turnoffs was the fact that the channel was targeted to women. Up to that point in the cable network business many of the channels were male driven, for different reasons, but let's be honest, early on it was pretty much a male dominated business, both on the distribution side and on the content side because many of the distribution partners ended up driving content. John Malone was probably the best example. I'm not saying that there was necessarily this point of view that programming has to be male dominant, but female programming – and by that I mean dominated by programming towards female on a network – was not found very often. One of the things I saw as a huge opportunity was to go after the female audience and I even used to pitch to cable operators "I know you guys think that the man is making the decisions in the house, but guess who's writing the check most of the time and guess who's suggesting what should be viewed." So HGTV, early on when operators said, "You know, Ken, I'm not real big on this channel because it's going to be a chick channel," and I couldn't resist, I said, "No, no, we're not going to have any agricultural, there's not going to be any chickens," and he said, "No, no, you know, chicks, women." It was just so out of his frame of cable networks that he'd launched. You launch a sports channel – bingo! You launch a news channel...

NELSON: They had Lifetime at the time. So I guess that's it. We've got our channel for women, we're done with that.

LOWE: They had Lifetime, but you know, even in those days as I recall, I don't think Lifetime, while it was targeted to women, a lot of health programming on in the mid-day, I don't think it was even branded as a network for women. It delivered more women but it wasn't a clearly defined women's channel. It eventually became that. In '93, '94, a women's channel, if you will, or a channel that was obviously going to deliver more women was a bit unusual so that in and of itself was a bit of a challenge, but the category was a challenge. I can't tell you how many offices I walked into pitching the idea to distribution partners and there were not television sets.

NELSON: In their office?

LOWE: No. There was not a lot, at that point, and I'll just use Scripps for example, I'll use our guys, it wasn't so much about the quality of the channel or what was on it as much as it was the deal points and what are you charging for it and how many minutes an hour do I get? And again, Steve, that was like a foreign world. I was on another planet. Fortunately fate played such a role in the success of HGTV, I was introduced to Susan Packard and Susan with just an incredible leap of faith believed in the concept, believed in the idea and was the first person that I hired because she came in and quickly put the house in order and started the whole distribution process which was totally lacking at that point. I had a pretty good idea of what the channel should be, the programming should be, the promos, the interstitial, but was totally out to lunch on the distribution side.

NELSON: Now I've heard that you're a pretty persuasive guy, you do a good presentation, and I asked Susan this, but I'm trying to imagine the situation where she's got a very good job, she's working for CNBC which is growing rapidly, it's an exciting area, finance – this guy comes along from the middle of nowhere with a network with nobody working for it. It's just him. Okay, maybe at this point you've got the money but that's all. What is it that you said to her that got her, or was it that she just got it because she obviously jumped on board into a ship with no sails and no oars practically.

LOWE: Well, Susan's a very bright lady, she's very perceptive and you're right, she had a great job, a great reputation. She was highly regarded in the industry, she was loved at NBC. She was working there with David and the folks at CNBC and they were launching America's Talking, which became MSNBC. I'm sure Susan is the best person to answer that. From my standpoint...

NELSON: Yeah, from yours.

LOWE: She got it. She really got the category. She understood that this was a hole, that this was an area that could be served. But the other thing that Susan and I truly clicked on was the fact that it was not about creating a cable network. It was about actually creating a culture and a business and a place that we wanted to put our imprint, if you will, on the people that we hired, the way we grew the organization. I really think at the end of the day that's why Susan and I hooked up. We saw eye to eye in that one very critical area because we were at the point in our careers – I'm a little older than Susan but she's wiser – she knew and I knew – and I remember her saying, because she'd worked for HBO and she'd worked for NBC, she said, "I don't know how many start-ups I have in me. Ken, you don't understand, these things are extremely difficult and they're very draining. The rewards are incredible but starting up a cable network from scratch is a really daunting task and I've done it a few times." She now had a young child; she now had a very successful career.

NELSON: And she was working and living in her hometown.

LOWE: Yeah, in Detroit. CNBC allowed her to work there. The whole question of having to move and her family was there, but when I think back about the leap of faith she took, I probably didn't completely appreciate it at the time. Now just talking about it I get chill bumps because I don't know that I would have done that and I'm a pretty persuasive guy. But she did get it. She really, really, passionately believed that we could create a culture and we could create an environment and we could grow a company within a company that would matter and make a difference, and I think that's why Susan joined. It was a big reason why I wanted to do it. So we hooked up on that. We've since become extremely close friends. She's like a family member and when we look back and talk about it now there's a lot we're proud of, but the people, the culture, is right at the top.

NELSON: How about other people that you brought in early? I've been talking to some of them today, but again from your point of view, Ed Spray?

LOWE: Well, you know, a good entrepreneur and anyone who wants to start a business, if you're going to succeed you hopefully have to be smart enough to understand that you're going to have a lot of great people. Each and every one of them should be better than you and in that area, Steve, I hit the mother lode. Ed was someone who I really didn't know; I knew his reputation. Ed had a similar job to mine at CBS where he was over the CBS O&O stations in programming and marketing and when the syndication salesman would call on me it would usually be, well, you know, I've got to charge you more because I just called on Ed Spray and he beat me down on prices.

NELSON: He had leverage.

LOWE: He had leverage. But I always had heard great things about Ed; I respected his abilities, but Ed had left the business. He was actually teaching at the University of Syracuse and Frank Gardner, who I mentioned earlier, and Ed had worked together at KCBS in Los Angeles and early on my desire was basically to have Ed's job. I did not want to be president of the network. I wanted to program it. I wanted to let somebody else worry about the headaches and fool with the distribution and put together ad sales. If this was going to be my network let me just do what I want to do, programming. Frank walked in one day and we'd interviewed a lot of people, mostly because nobody really wanted to take the leap of faith and go with this network and run it without some guarantees, Frank came in one day and said, "Well, it's settled, you've go to be the president." That was really not what I wanted to do. I wanted Ed's job. I said, "Okay, I'll do that but we've got to have somebody that's like my right hand to do this because this is what I want to do," and he said, "There's one guy I know in the industry that's hands down and that's Ed Spray, but he's at the University of Syracuse, he's teaching, he's very happy." So I went about convincing Ed to give up, as Ed always reminds me, tenure and join a start-up network. It's a great story because Ed came down to Cincinnati, I gave him the presentation and he was hooked.

NELSON: Well, he told me about the sheets coming off the magazines again. I guess you kept those sheets handy.

LOWE: Well, you know, anything to do a little song and dance. The presentation was important because it was about an hour presentation. It was very deep. I planned the network out for at least ten years including spin-out networks and call centers. I had a lot of time to think about it. There had been a lot of ideas that had gone into that cardboard box. Until, Steve, I started digging into the box and looking through I didn't realize how rich and deep it was, but because it was accumulated over a period of time and I'd had time to think and re-think, I really had unknowingly put together a pretty broad, deep plan. It wasn't just a cable network. It was actually a category buster, if you will. It was aimed at moving beyond just being a cable network and that's why early on it was essential that we own the content. I knew we'd probably move it to other platforms. Just because you're in FM or television broadcast or cable networks, somebody else is going to come along, there's going to be another technology, so don't limit yourself to just that one platform. That was our mantra. And the other thing that was no question was interactivity was going to become more of an important piece of the puzzle. I didn't know at what time. We actually were way ahead in some areas in thinking that. Technology, as we sit here ten, eleven years later, is just starting to catch up with some of the ideas we had on paper there, but Ed got that. The great thing, I think, about Ed going back and teaching and getting out of the business is all of the sudden he's back with 19, 20-year-old kids who are of a different mind, a different mindset, and it just completely opened Ed's mind to new ideas and ways of thinking. So Ed had actually, unbeknownst to me or Frank, been teaching a course on cable networks in the future, so I was preaching to the saved somewhat. Ed played hard to get, told me there was just no way he thought he'd be interested in this job, and as fate would have it one weekend I called him at home in Syracuse and I got his wife, Donna, on the phone and I introduced myself and Donna said, "Oh, yeah, I know Ed's been talking to you about this job and I think this is great. I can't wait to get out of here. We've got 22 inches of snow on the ground. We're ready to move!" So when I got Spray back on the phone I said, "Hey, I got you! Donna's giving me the inside."

NELSON: You found your closer there, right?

LOWE: Yeah, I did, I did. Ed came onboard, and again, back to Frank Gardner – as I said, without Frank there would be no HGTV. Frank had also had a young man who worked for him before Frank came back to Scripps at Fox News in Los Angeles, this bright young man out of Harvard who just was, as Frank said, setting the newsroom on fire with his creativity and his genius, by the name of Burton Jablin. We brought Burton in at that time and Burton was kind of on sabbatical. He was off climbing mountains and having a good time. As a young man that's what he should have been doing, but we were able to convince him to come on board and join the programming team, and even though Ed an d Burton had never met until after they were both hired, boy, what a team they became, like a hand in glove.

NELSON: Now, in terms of – if you'll excuse the term – luring Burton in, you said he was off climbing mountains somewhere, what did you have to do to persuade him to join up or did he just take the leap quickly?

LOWE: I don't think Burton could have been convinced, and by that I mean I think Burton either had to really get it and be passionate about it and want to do it or he was going to move on to something bigger and better, but fortunately for us he did. One of the brightest guys I've ever had the pleasure of working with, a true genius, and he was intrigued by the challenge. He'd worked in television news, he actually was the editor of The Crimson when he was at Harvard, he had a journalism background, but he had this curiosity about him like a lot of great journalists do and he was curious about this whole cable network industry and I think that brought him in and wow! What a marriage made in heaven. All these people were the right people, right place, right time, but I think Burton especially. He's just blossomed and today as we sit here he's not only president of HGTV, but oversees all of our cable networks.

NELSON: Now it's interesting that other than Susan these other names you've mentioned, yourself and Burton and Ed, really didn't come from a cable background.

LOWE: No. One very important person that did was Mark Hale. Mark we met when we were touring E! one time with Brian Owens. He got us a tour. I knew we wanted a facility that in my mind we could at least shoot some studio programming just to keep costs down. A lot of this programming could and should be done in studio, demonstration type stuff, and we were very fortunate in luring Mark Hale out of E! in Los Angeles to build the facility that we're sitting in today, which is state of the art in every way. But Mark had cable background experience and that was very crucial because Susan needed someone on the operations side that understood delivery, understood the satellite business, understood quote unquote, if you will, the vernacular. So we had in the right places the cable experience that we needed, but really on the programming side I think we had great minds in Ed and Burton and Kristen Jordan and people that came on early to really create the right content. They weren't wed to necessarily a cable system per se or a company that was trying to launch a channel because we had distribution systems.

NELSON: Now you mentioned the facility that we're sitting in which actually at least part of it was here. You did a deal very early on for a production company here in Knoxville which became key to your growth. Talk about that a bit, the Cinetel.

LOWE: Well, it was important to me early on when I realized the board was going to give us the money that the network be in a location where the employees could actually experience the category. They could own a home, they could have a backyard, and I wanted it to have four seasons. I wanted the network to live in a place that actually reflected most of America. I also didn't want it to be in New York or LA and that's not a knock on either city but I knew there would be a certain amount of distraction. I also knew we had limited funds. So in my mind all along I thought, my true prejudice showing, well, let's go back to North Carolina.

NELSON: I was going to say, you didn't fall very far from the apple tree.

LOWE: We actually looked at... Dino De Laurentiis had a studio at that time in Wilmington, North Carolina where Dawson's Creek was shooting. We actually went down and took a look at that. As it turned out things didn't work out, but as fate would have it this particular facility in Knoxville, the owner, the guy who had built it, a guy named Ross Bagwell, a true, true, genius, was approaching the point in his life where he thought it might be time to look at exiting and actually had a deal with Multimedia to sell it and fortunately that deal fell apart in the eleventh hour, we came in, bought the facility. The facility at that time was just a small factory cranking out cable shows. They were doing America's Castles for A&E, they were doing several home and garden shows for Discovery, for The Learning Channel, they were doing a lot of programming for the Nashville network, and they'd done programming for Nickelodeon. I was fascinated. They had a music publishing department; they were actually shooting on film. It was fascinating that you could have this kind of facility sitting in of all places Knoxville, Tennessee, and then I started to think about, well, wait a minute, we, at that time, owned the cable system in Knoxville. We had 100,000 households; we owned the newspaper in Knoxville, Tennessee. There was a lot of interesting technology research going on just over the hill in Oak Ridge, Tennessee, IPIX, the 360 degree internet video streaming and digital search pictures was created just down the road, and other things, and all of the sudden it started making sense that this might be a good place to place the network and certainly people could own homes. The University of Tennessee provided a rich educational environment as a great funnel, and then Whittle Communications, at that time – folks who remember back when Chris Whittle, who'd been extremely instrumental in creating a cutting edge content technology company – unfortunately was going out of business in Knoxville. Knoxville had happened to be his hometown, and we benefited a great deal by picking up a lot of those people. So again, fate just kind of pointed its finger at Knoxville and we ended up here and thank goodness we did. It's turned out to be one of the better moves we made overall.

NELSON: I assume during this period that there's some kind of reporting back that you have to do to the Scripps board? You've got their 25 million bucks; you've got to tell them something once in awhile.

LOWE: Well, you know, now the truth can be told, years later and with the network being a success, but Frank used to say to me, he said, "Do what you have to do. Get this network up and get it launched. I'll take care of the corporate guys here. I'll run interference," because the last thing we wanted, and there's no real knock here, but we didn't want corporate meddling, if you will, which is true in a lot of companies where "we'd like to take a look at this programming, we'd like to do this, we'd like to do that", all good intentions and hey, if you're the parent company and you've got 25 million dollars on the line, why shouldn't you?

NELSON: With a guy that's never run a network before much less started one!

LOWE: Yeah, right! Never mind that, never mind. But Frank was wonderful. He knew that we had the vision, we had the people, this thing was going to fly, but leave him alone. So Frank ran interference and did a masterful job of that, and believe me, we were very, very disciplined, both fiscally and also strategically, but we did have to go back pretty quickly and ask for another 50 million. It eventually became 75 million, but that...

NELSON: By the time you went on the air?

LOWE: Yeah, but that became actually easier to ask for because we'd really gone in, Steve, back to the business plan and our naïveté, we really hadn't built a model out to the degree it needed to be in the business plan and once we realized that we were on to something we went back to the company and said, "Look, it would be better if we could do this. We need more shows in this area." And then after we launched we were just blown away by the feedback, the viewership, and it was apparent that the programming we had was going to burn out very quickly. We'd had a high repeat pattern on, like a lot of cable networks do when they launch, and we quickly realized, you know, we've got something here so let's not burn it out, let's funnel some more programming in. So the company eventually told us we could spend up to 75 million. The good news is we never reached that amount. We turned black before we spent the entire 75 million. We actually turned black, profitable, in about 3 ½ years. The business plan called for 5, so all high-quality problems.

NELSON: That's actually fantastic when you look at start-ups. Can you remember the day you went on the air? You'd been having this dream now for years, driven people crazy with it including your wife, so what was your reaction when you're on the air? What were you thinking? You can actually see it on the TV screen.

LOWE: That's my most memorable day, point, mile marker in the past x number of years from the creation of this network, and it's interesting, I remember there were cameras there that morning, television stations were covering it, although not that many because "there's a cable network being launched this morning towards home and garden – oh, who cares".

NELSON: And besides, it's cable and we're broadcasters.

LOWE: Yeah, we're broadcasters. But we did have some local coverage and our paper covered it, but I remember one television station, and it was 7:00 in the morning and we were exhausted. Anybody that knows when you've got that start/finish line drawn and you're going to launch that network, and we had to get it launched before the end of 1994 because at that time cable operators had been allowed to pass through an extra $1.25 in additional programming expenses to consumers, however to be included in that $1.25 as one of the cable networks, you had to be on the air in 1994. We bought this facility; we closed on it on April 1, 1994. We launched the network in December with, I would say at that time, Steve, 80% original programming. So it was a freight train right to the launch, so we were all exhausted, but you know, you're on an adrenaline high. But somebody stuck a microphone into my face that morning and they said, "What does it feel like? What's it feel like to have your dream come alive, to have this network launched?" And I remember my answer, I said, "You know, I'm a bit melancholy because today it went from being a dream to a business. It'll never be a dream again; it will always be a business." And there was a bit of sadness. There was never going to be a time when I'd throw another idea in the cardboard box. There was never going to be a time when everything was leading up to that moment. Now on the other hand, I was exhilarated. I mean, how could you not be?

NELSON: Of course!

LOWE: But it was a strange feeling and I'll never forget it.

NELSON: These two competing feelings.

LOWE: Yeah, and really it's that old line about the creator, the originator, the entrepreneur, sometimes they can never stop creating because they don't want it to become a business. You almost don't want it to become a reality because the dream ends and the business begins, and believe me, I welcomed that because I thought it could be a great business, but in my heart of hearts it was a more emotional difficult day than I thought it would be.

NELSON: You just thought it would be congratulations, break out the champagne.

LOWE: Yeah, yeah, and I remember Frank and many of us were very emotional about it, as you would expect, and maybe it was just because we were all exhausted but it was an interesting day and certainly one, boy, when they finally devote my life to one paragraph that would be the one thing I'd have to say that the highlight was the launch day.

NELSON: You talk about the dream being over and the business beginning, but this business has also generated subsequent dreams that became additional businesses with more networks, an incredibly successful website and you've got the vision of VOD and of course you've always been interested in this new technology. So in fact, the dream isn't over. You're still motivated by the new things to be done. It's not just a going through the paces and cranking it out.

LOWE: No, it's a good point and if there's anything that I think I've contributed it's the fact that I have this restless pursuit of not allowing it just to stop here. I can remember, it was a week or two before launch and Ed Spray shows up in my office one night at midnight and he's really angry at me because I'd come up with two or three more ideas about some things we could do, some other businesses, and I remember Ed stomped into my office and said, "Would you just please stop creating long enough for us to get this network launched?" But gosh, there are so many ideas. As we sit today, it's interesting that while we're taping this just yesterday we had a business development meeting and just a couple of weeks ago we launched HGTVPro.com, which is really an offshoot of HGTV that's aimed at contractors, plumbers, landscapers. It's the business to business side of the shelter industry. It's a broadband, internet delivered streaming video business that's really geared for the next generation in the building industry, but that's something, HGTVPro, that we announced in 1995.

NELSON: I thought I'd heard that before.

LOWE: But the point being, it's taken this long for technology to get to the level of where the idea can become reality. So there were a lot of things in the hopper, Steve, ideas that were there in the original plan for HGTV because as I said, it wasn't to be just a cable network, it never was. My dreams and aspirations were far beyond that. HGTV was merely the entry point into the shelter business that if successful and had brand credibility, which was why it was so extremely important that we didn't do product placement – Scripps was a company that I'd worked for for a long time and had really been burned into my head that there's a separation between church and state, that this is a journalism company. You never mix editorial with advertorial. There was to be a line drawn, and I strongly and passionately believed that when people turn to this brand they needed to trust it, they needed to say "that's information I can count on", it's not being prejudiced or biased because some sponsor has to have their products in there. Early on, I've got to tell you, we walked away from a lot of business. When I did the first deal with Lowe's, and I did the first deal with Lowe's Home Improvement Warehouse because I didn't have a head of sales at that time, they basically said, "Look, if we can't put our products in the shows you don't have a deal," and believe me, this was a big deal. Lowe's was really very visionary led by a gentleman named Dale Pond who understood that truly this network was probably going to work and he wanted to be the first in, but they were using leverage to do product placement and we wouldn't do it, we walked away. We eventually did a deal because they agreed to come to the table without product placement, but it was essential that people could trust this brand. They knew that we couldn't be, if you will, bought off. I'm not sitting here suggesting that product placement is not a good idea and doesn't work in certain places. It's much easier in entertainment, it's much easier in movies, but when your network is based on credibility and information and take-away information where there's the cable network, the internet, mobile phone, whatever it might be, PDA, that information has to pass the sniff test. It has to be credible information. What we did is we created a call center because we knew people would have questions about it when you don't necessarily give a brand name or you have a product name that almost begs people to say well, what is that? So we set up a call center so people could call in and get the information. We wanted to be viewer friendly, and believe it or not, in 1994 that was unusual. Cable networks by and large didn't really encourage interaction with customers.

NELSON: It was one-way. You sit back and watch our shows.

LOWE: I wanted interaction from day one. We were an interactive network. I wanted it to be two-way. I really did believe... and I cannot tell you I was visionary enough to understand the impact the internet would have because in those days we did 1-800 numbers and postcards. The internet was not distributed deeply and widely enough where we could rely on just emails. It eventually happened a few years later. But it had to be interactive. It had to be a network that viewers felt that they not only could sit back and watch but they could talk to and we'd listen, and early on we put promos on the air showing real people. We'd go out and go to these home shows and let people talk in their language what the network meant to them. We had instances where people would call us and say, "My sister lives in Seattle; they don't have the network up there yet. I'm taping shows and sending them to her so she can see." The word that we got early on, constantly, from Florida to California to New England was "I'm addicted to this network". I knew we were onto something, Steve, right out of the box because the feedback that we were getting unsolicited was "Finally, finally, somebody's got a network for me." It was primarily from women but there were a lot of men, too, and a lot of that was built around what we also were very adamant about and that was this was going to be a network that didn't get too cute. We weren't going to allow profanity, we weren't going to rely on sexual innuendo or some of the early easy tricks to pull in some viewership. We wanted to raise the bar, we wanted to have a higher standard of programming. I don't mean to sound like I'm standing on a soapbox, but it was very important to us and that also resonated with viewers. Early on we'd get calls that said, "Thank you, finally a network that's not attacking my sensibilities, that I can allow my children to walk in the room and not have to flip the channel." You can't even always say that about the 6:00 o'clock news because of some of the images that come through.

NELSON: Not these days.

LOWE: So, believe it or not, it was a point of differentiation. I don't think a lot of people thought about it in those terms, but we did and we were conscious about it. So, credible information, you can trust us, we're never going to surprise you, and I think those are some of the big reasons that the network immediately connected with people and became a very passionate brand for a lot of people. In the marketing world, and in the creative world you can't ask for better than that.

NELSON: Passion around a brand.

LOWE: Passion, yeah.

NELSON: How about from the operators' standpoint? I know that you went on the air – we're just getting back to that moment in time – 6 ½ million subs, something like that, 6 million. Where did those come from since you seem to have run into a lot of resistance out there, at least initially? I know there was very rapid growth after that, but where did those first 6 million subs come from?

LOWE: Well, we used our retransmission consent of our ten television stations at that time, and at that time, the television industry, I think, was really of the opinion in general that we were going to quote unquote get paid for our television signals. Being a company that also owned cable systems and hearing from the guys that ran our systems I was pretty well convinced that was not going to happen.

NELSON: They weren't going to pay anything. You, who knew the cable business, knew that was not going to happen.

LOWE: Exactly. "So we've been getting these signals free for 25 years and all of the sudden you want us to pay you?" It just wasn't going to happen, and the broadcasters, in hindsight, while I think CBS led the charge, were not really united in that, and by that I mean ABC broke early, Cap Cities broke early and ABC said, "Okay, we're going to launch ESPN2 through retransmission consent."

NELSON: Give us carriage instead of bucks.

LOWE: Yeah. No money, but it'll just be a barter deal. Well, that left all the ABC affiliate stations, and we had six at the time, or five at the time, really kind of on their own. The O&Os have cut this deal, the network has cut this deal, and shortly after that Fox did FX. Of course NBC announced America's Talking and that became MSNBC and really CBS didn't have an idea. A great untold story is we were this close to partnering with CBS. CBS was going to own HGTV.

NELSON: Was this before you went on the air?

LOWE: This is before we went on the air. We were going to do a retransmission consent deal with CBS. Peter Lund was the president of CBS at the time, a good friend. We came very, very close and the deal fell apart in the eleventh hour, thank goodness, but retransmission consent was a wedge, it was a tool, and it was at least one that got us into some MSO offices and signed some deals. There were some operators early on that really did get it. They believed in the concept. Rob Stengel with Continental Cable at the time was one of those guys who stepped up, and actually Amos Hostetter and Rob really helped us. Continental Cable was, I think, the first distribution deal we signed. Once you broke through, once you got in the club, once you had a deal – Fred Dressler, shortly thereafter, at Time Warner. But again, it was built around retransmission consent and that leverage, but we were the only independent broadcast group that was able to pull that off. We were fortunate to have a viable cable network idea, and that was another thing, Steve, that probably prompted me to really think seriously about staying with Scripps because I knew, having run the broadcast group that we really didn't have a plan for retransmission consent. It was driven by Frank, so that tool helped get us in the door, get us some early distribution deals. They were not easy and our rate card was embarrassingly low, but in my mind it was not about trying to get a lot of sub fees, it was really about getting this network out there. I really felt once we got it out there and people saw it, it would drive its own distribution, and that's to take nothing away from Susan and her incredible team, but when you do have a product people want...

NELSON: Big difference.

LOWE: Big difference. The other thing that helped – and if you go back and look at the history of the industry – was when Direct TV and USSB came along and there was an alternative, and we were fortunate enough to get a deal done early on with Direct TV. Then it started appearing in marketplaces and we got some buzz and that got some cable operator's attention and then the network just kind of took off and it made it a much easier sale to the MSO community.

NELSON: And when you say "took off", give us a sense of what your growth was in the few years after you got launched.

LOWE: I think to the best of my memory, I think within four years we were up to 40 million.

NELSON: Which is phenomenal.

LOWE: Which is phenomenal. I think Home and Garden and History, as I recall, we were kind of neck and neck in growing together. History had the luxury of A&E as a big brother, if you will, to help push it along. We were a stand alone. We were on our own. But one of my favorite lines is one day somebody came up to me and said, "You know, I was one of those people that used to say I want my MTV, and now it's I want my HGTV." So that generation, I think, really helped drive it. We did a lot of promotions with advertisers. Lowe's, for example, partnered with us and they actually would go into cable operators and spend local advertising dollars on our two minutes if the operator would launch. We had some very innovative grassroots promotions. Hancock Fabrics had petitions in their stores where people could come in and sign petitions that would be taken to local MSOs to get HGTV launched. We really did a lot of things that other cable networks didn't. We had to. We were a stand alone, we weren't all that respected, we weren't known, but we were quietly building this reputation. Like Butch Cassidy in the Sundance movie, "Who are those guys?"

NELSON: Knoxville where?

LOWE: Yeah, then people would always say is this Nashville? No, it's Knoxville. But we quickly built a reputation of quality original programming. Customers, viewers, liked this thing. They're giving great feedback and we used that to our advantage and then Susan Packard just built a phenomenal distribution team, she really did, and those people went out and did their job. They got this network launched, and where it got launched it was immediately viewed as a quality network and the operators would tell us that. After awhile, it was most interesting how the tables turned. The operators would say, "We're pulling for you. You're not one of the big guys; you're not one of the big groups. We like you guys and we like your content and the viewers like it." So things started breaking our way, and back to your line, Steve, about passion – when you have people passionate about a brand then it makes your job a lot easier.

NELSON: Given the fact that at least initially there were some struggles getting it off the ground, getting it on the air, getting advertisers on, was there a moment in time that you can recall thinking, okay, we're really starting to hit it now. We're really going to succeed. Or was it just a big blur?

LOWE: Listen, I'm a paranoid entrepreneur, I'm not sure we've still made it.

NELSON: Well, I think you've got to accept that. Let's take that as a premise, you've probably made it at this point.

LOWE: No, seriously, the first few years I was still constantly looking over my shoulder. Who's going to launch against us? As I recall, just before we launched Discovery announced that they were actually going to do a home channel in their digital launching of networks when they were launching Wings, and actually did end up launching a home channel, but early on they were more focused, I felt, in coming right after us, and again, as fate would have it those plans got delayed. You know, it's a great question. There was no one point where the light bulb came on and said, "Whew! We're here," because I was constantly in my mind wanting to improve it, make it look better. You know, the promos are not good enough, the shows – this could be better. And I still feel that way today. Fortunately I've learned to sit on my hands a little more and we have great people, but I'm just never completely satisfied that we're there. So while I guess at some point along the way I thought, well, okay, this thing is working, it's going to be successful, it's going to make money, I never envisioned it would be this big, this deep. I never really thought you'd look up at a chart and see the most respected brands and HGTV would be sitting there along beside Discovery and CNN and ESPN and those kinds of brands. That just wasn't in my thought plan early on. It wasn't that I didn't believe in it. You still have to pinch yourself from time to time because there are a few folks in the industry that have been as fortunate as me and you can name them – John Hendricks, he had a vision, he had an idea and it became reality, but I don't know what John would say, I don't know what some of the other entrepreneurs would say, but when you start one you just want it to succeed. You want it to get out there and people to see it. It's not about making money and it's not about fame and it's not about anything other than getting that idea out there. What do people think of it? How will they react to it?

NELSON: You mention John Hendricks. Were there people like John that you looked at as a possible role model or inspiration for "he did it, I can do it?" and who would they be? Obviously John, I would think.

LOWE: Well, John would be at the top of the list because what I would read and see and hear about John, he was not a guy from the industry. He was just a guy with an idea, a vision.

NELSON: He was a school teacher!

LOWE: I've since gotten to know him and he's a good friend, just a fantastic human being, but so many other folks that had ideas – Bob Johnson, of course, with BET. So there were a lot of folks I looked to as real role models of people I was encouraged by and saw their dream come true and happen. So, yeah, I thought, boy, maybe I could do this too, but I never quite envisioned it would be this successful to be honest with you.

NELSON: And you think one of the attributes of succeeding is – in fact, you talked about this a little while ago – sort of never resting on your laurels, never accepting, okay, we're here, we can kind of let out our breath and coast along. There's always that need to continue to be driven, to continue to push, to continue to look over your shoulder, to let a little paranoia creep in there?

LOWE: Absolutely, because somewhere right now there's a Ken Lowe in a garage that is creating something that's going to be a competitor to HGTV. It may not be a cable channel; it might be a broadband channel, it might be delivered on cell phones. That, and the fact that I just see so many additional opportunities beyond HGTV. Of course we were fortunate enough to acquire the Food Network in '97 and then when we realized that Home and Garden was starting to move into more lifestyle and in some ways abandoning a little bit of the do it yourself category, we launched Do It Yourself in 1999. Fine Living, to me had always been an idea somewhat aimed at a different audience, a bit more upscale, higher income. We launched Fine Living a couple years ago. Broadband networks that we're creating now, all the work that's going on in VOD, our internet sites are robust. The Food website is the number one website in the world in the business as it can spring and go forth from that. Then being fortunate enough, now, to oversee the entire company, we're spreading those ideas into our newspapers, into our television stations. So the great thing about my job is I just get to get up every morning and dream more about more ideas and more things that can grow out of that cardboard box.

NELSON: I knew those dreams didn't go away.

LOWE: No, no, and it's also a curse, by the way.

NELSON: Well, yeah, but one you'll take. You mentioned the newspapers because going back to your presentation to the board where you take out the newspaper and say, "Look, we've got this, this, and this, we don't have this." It's a little ironic now that the newspapers are now being influenced by what you're doing on the TV from what you're saying, in terms of lessons you've learned from that in terms of reaching the market, and newspapers really have changed a lot in the last 10-15 years.

LOWE: Oh, certainly, and they've changed because two things – competition, fragmentation, if you will, and the third being technology. The internet has had a tremendous impact on newspapers, but yet I think there's a lot of life left in newspapers. Newspapers have to understand that they still are the most widely distributed media in any local market. On any given weekend a newspaper in a market like Knoxville, Tennessee will reach 50-60% of the population. You can combine all local media and you can't come close to that, but what can you do from that? You can't just continue to ride that because newspaper readership over the long haul will probably continue to decline. Younger folks now are more driven to the internet. They're getting their information from different places, so what can we do to take, if you will, that franchise and move it into different platforms, and the newspapers that succeed over the coming years will be the ones that do that, that reinvent their business. If you just stay in that particular business, you'll allow the future to be predicted for you. People ask me all the time, how in the world is it that Scripps was able to launch a cable network into the shelter category against the likes of Meredith and Conde Nast and Hearst, companies that had been producing shelter magazines for over a hundred years? I don't really know, except I think they were in the magazine business, not the shelter business, and by that I mean, your viewers, your consumers, your users are not yours, they're going to go to the next level, they're going to move to where technology gives them different, interesting things. I remember when I used to plan on houses and building houses, I'd just rip pages out of magazines to show a builder or a designer. Well, now you can walk in with your PDA, your cell phone, and say, "By the way, I just took this picture of my home and also downloaded these shots from HGTV and here's some video." Things change. Nothing is static. All glory is fleeting in the media industry. So where you are on the life cycle curve is critically important for you to know and for the consumer to know. If you think you're here and the consumer thinks you're here, then you're already disconnected. So what we want to do is continue to ride with HGTV but understand that people can use HGTV in different ways and will use it in different ways. The world of TiVos and DVRs will not go away. We're going to have to learn to compete in that world. Linear networks are going to become very modular, they're going to be broken apart and we have to learn how to not only compete there but to serve the end user. So every day's a challenge. I like to say you get up in the morning, they've moved the goal posts, they've widened the field, we're not playing on the same field we did yesterday, but that's what makes the business exciting.

NELSON: Let's have a new game plan. Now one of the ways in which things are changing, you mentioned TiVo and DVR, the whole concept of programming on-demand and particularly various flavors of VOD – I know you've been active in that. I'd just like to get your sense of where you think that's going. Obviously the industry is feeling its way, trying different things – free subscription, pay-per-view, etc., etc. What are you doing there and how do you see that stemming off of what you've done to date?

LOWE: We're not fearful of VOD. I think there will always be an HGTV, there will always be a linear program channel, but let's face it, Steve, if you're interested in remodeling your kitchen and you know you can actually go to a video library, and right now you can download and watch this episode and this episode of remodeling your kitchen – if that's available to you are you going to wait until Thursday at 8:00 for it to come up on the network? No, you're going to pull it down and watch it now. That's just reality and therefore we have to learn to live in that world. It probably has to be programming re-shot, re-edited. We can't very well tell our operator we're going to put it over here and put it over here too, so we're partnering and we've been one of the more aggressive network groups in getting out and partnering with MSOs in VOD. We want to learn viewing habits. All of our VOD is advertiser sponsored. If you're watching that half-hour show, let's say, on remodeling your kitchen, you don't necessarily view a two-minute Kohler sink spot as a negative, a commercial, if you will. It's information. "Gee, I'd like to learn more about sinks. Heck, I'll even tap into their website," and maybe we get paid for a click through there. They're new forms of advertising. I'm speaking just for us. I think movies, sporting events, live events in the whole VOD area, it gets a little more difficult when you get into first-run television. If you're Fox and you're running the 24 show you can't really put it on VOD if it hasn't already premiered on the network. So one size does not fit all here. I think we're working our way through it as content providers and as distribution partners, but VOD is going to continue to be a very vibrant piece of our business. It's looking like the model will be advertiser supported when it comes to networks like us, and we're okay with that as long as we can participate in it. We've always been good partners with our MSOs and our DSS partners and I think as long as we can continue to partner, learn together, work together, we can have our cake and eat it too.

NELSON: Do you think that the growth, and the growth is going to be very strong over time in VOD, does this mean that the opportunities of starting linear networks are declining because there is another way, really, to deliver stuff at this point?

LOWE: Oh, absolutely, absolutely. It's hard to envision why anybody would need another 24/7 network. First off, you take any network out there right now, even when they're on 24/7 there are repeat patterns, maybe there are x number of hours a week of really good content that you'd really want from that network. I think it's absolutely going to happen where we'll see networks created in a VOD type format. When you really think about it, Oprah Winfrey is a brand, a very popular brand, a very powerful brand. It makes a lot of money. It's one hour a day. That's a brand. Do you need an all-Oprah network? No, especially in a VOD world. For us, we see opportunities back to what I said early in the interview about under the roofline, if you will, of HGTV there are a lot of different networks. What we're doing now, for example Steve, is on any given month we will email to people who opt in up to 15 million per month electronic newsletters to homes, but they're segmented into design and decorating newsletters. In the case of the Food Network, different types of cooking, maybe just an Emeril Lagasse electronic newsletter. Those eventually can become video networks. You can stream video right to the home. They can become video magazines, subscription video magazines. That, in a way, is VOD taken to another level. So I think we have to take blinders off. If we sit here and say, gee, we just want to be this linear cable network, we don't want to get into the whole VOD thing, we're going to lose some tremendous business opportunities. There are going to be a lot of bumps along the way. There are going to be some surprises. There are going to be, as there always is in any content and technology business, there's going to be some things happening that make you say, wow, why didn't somebody foresee that? You have to be able to play in this arena and understand the business is going to move forward with or without us.

NELSON: So you'd rather it move forward with you?

LOWE: Absolutely, and you know, by and large we've had our squabbles, we have our disagreements, but at the end of the day content providers and MSOs, we've always had a good partnership. We'll continue to figure out how to work it out. It's a great business and it's going to continue to be a great business.

NELSON: I know it's an odd question to ask you since you're still so actively involved and still dreaming and moving forward, but to date, HGTV has been on now over ten years, what is the legacy that you think you've left to the industry? What's the mark that you've made? What would you like people to think is the mark you've made?

LOWE: What I really hope when people look at HGTV and look beyond the brand and the network is that, you know, Ken Lowe hired some awfully good people, motivated them, kept them together, and together as a team they built a pretty remarkable business. No one individual can take credit for this network, especially me, so HGTV is the legacy of a lot of very talented, incredible, dedicated people. So if I have a legacy I hope that's it, I really do. I think it's all about the people.

NELSON: And the channel itself? What has been its impact on the cable business? Its legacy, so to speak?

LOWE: I think a continuation of what has made this industry what it is, and that is entrepreneurs, self-starters can succeed. If you go back to the MSO side, if you look at the content side, there were a lot of folks who really were just dreamers. They were some of the first guys to string wire on poles to cities and people laughed at them. "Cable? Why would I want to pay for something when I can put an antenna up?" Some people who had visions on the content side, be it a Jerry Levin or a John Hendricks or a Bob Johnson and saw their dream through, I'm just a continuation of that. I'm not the first guy to come along with an idea and make it happen, but HGTV itself I hope will be always remembered as one of the networks that truly set about owning the content, creating original programming almost 100% of the time – that was a huge undertaking – and then did reach out to the audience and say "We want this to be two-ways. We want it to be interactive. We want to set up a relationship in which technology will allow you to interact with this network and grow us and take us into areas in ways that we probably even haven't thought of." That's a pretty tall order for just one network, but I think we did a pretty good job.

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Richard Loftus

Richard Loftus

Interview Date: Thursday January 13, 2000
Interview Location: Rutherfordton, NC
Interviewer: Marlowe Froke
Collection: Hauser Collection

MARLOWE FROKE: Richard Loftus is one of the most widely known people in the cable television industry. Part of that is because he has been with the industry since the very, very early years.  Another part of it is that he has covered almost aspect of the industry itself from the engineering and the technology side to operations to public policy to regulatory to legal to marketing, programming.  You name it, and Dick, at some point or another, has been involved in that aspect of the cable industry.  So he brings, then, to his perspectives on cable, a wealth of experience that has given him a reputation that is sought by people throughout the world.  

We’re with Dick at his new venture which is West Point Farm, just outside of Rutherfordton, North Carolina. West Point Farm is in North Carolina, the beautiful western part of the state, not too far from Ashland. Dick has one of the most spectacularly beautiful resort areas that he is developing on his own, now that he has retired, at least partially from the cable industry.

Can you tell us just a little bit about how you got into West Point Farm, Dick?

LOFTUS: Well, I’m a city boy, city born and bred, so I always wanted to have land – a farm.  I loved the western part of North Carolina.  I loved the climate here.  I loved the people.  So when I settled here, I started looking.  Serendipitously, I found this farm—90 acres, 1,800 feet on the Broad River – that goes from the river bottom all the way up to about 1,000 feet in elevation.  The vegetation is farm.  It’s an old farm, was a cotton farm.  I’ve now got pasture areas sowed in corn and soybeans.  There’s a lot of wood, pine – white pine, jack pine – and a lot of hardwoods – maple, hickory, some birch, oak of course.  I’ve developed a facility here that is eclectic.  I found two old cabins in Virginia.  In what is almost like the ultimate recycling process, took them down, dismantled them, brought them down here to North Carolina and reconstructed them here on the site.  

FROKE: So what you have is a very unique – well it is a unique …

LOFTUS: It’s a ‘uniquity.’”

FROKE: Yes.   That does a bit for the history of the country as well as an opportunity to move away from one’s regular life routine and find something that is very, very relaxing and very, very enjoyable.

LOFTUS: It’s a real place to get away to—rustic, bucolic, peaceful, enjoyable.  There’s recreation available.  It’s just truly an enjoyable place.  

FROKE: Dick is seated in a swing on the porch of one of two of the houses that he assembled.  If you look carefully off to the background, you will notice the timbers that were brought from Virginia and were assembled, timber by timber, here in West Point Farm.  One of the houses dates back to 1746, and another house dates back to 1858.

Dick, what we’re going to do is interrupt you now for just maybe five minutes and give you and Lori, your wife, an opportunity to give us a tour of West Point Farm.

LOFTUS: Great.  I’d love to.

FROKE: Back now for the history of Richard W. Loftus, a project that is conducted by the National Cable Television Center and Museum through the generosity of Gustav M. Hauser, the Hauser Foundation.

Dick, you were born in Washington, D.C.  Is that right?

LOFTUS: I was born in a taxi cab in Washington, D.C. at 18th and Pennsylvania Avenue on December 23, 7:00 in the morning, 1938 and my father was driving it.

FROKE: And you haven’t stopped since.

LOFTUS: I haven’t stopped since.  The only thing I think that could have been different, I could have been born in a revolving door.  

FROKE: What was the profession or occupation of your father?

LOFTUS: He was a cab driver.

FROKE: He was a cab driver in Washington?

LOFTUS: Yes.  I was told that story by my mother when I was eleven years old.  I had had an argument with my father and I said, “Why is he mad at me?”  I used to have a lot of arguments with my father.  She told me the story about being born in the cab.  She said, “You know, Richard, I don’t think he’s ever forgiven either one of us for the mess we made.”  So that’s where I learned the story.  She tells me that she got to the hospital – Columbia Hospital – which she was heading to.  It’s at 24th and Pennsylvania Avenue.  My mother was a nurse, and she said, “Bring me a sterile towel and a wheelchair.  This one’s here already.”

FROKE: Do you have any brothers or sisters?

LOFTUS: I have one older brother.  He’s three years older than I am.  He is an attorney, as I am.  He practices law in Warrington, Virginia.

FROKE: Were your father and mother natives of the United States, born in the United States?

LOFTUS: My mother and father were born in the United States in the area around Scranton, Pennsylvania – my father in Scranton and my mother in a town called Old Forge which is right outside of Scranton.  Both of their parents, however, were Irish immigrants.

FROKE: And they came in the early 1800’s?

LOFTUS: They came in the late 1800s.  My parents were born here in the early 1900s – my father in 1905 and my mother in 1909.  Their parents had emigrated here from Ireland in the 1890s.

FROKE: And that was during one of the food crises in Ireland?

LOFTUS: Yes, the European food crisis, a period of time when there was famine in Ireland.  Originally they came to Canada, and then they came down from Canada separately.  My mother was a Keough, and my father Loftus, of course.  Both of their families migrated at the same time, but not on the same boat or not on the same train.  My grandfather (my father’s father) went to work for the Lackawanna Railroad, and my mother’s father was a pharmacist in Old Forge, Pennsylvania.

FROKE: Religion has been a very significant part of your lie.  Did that obviously begin with your mother and father, then?

LOFTUS: Yes.  I was born Catholic, as they say.  They were Irish Catholic, and I was raised Catholic, educated Catholic. I went to a Catholic grade school, Catholic high school, Catholic college, and Catholic law school.  So I’ve had a very Catholic education.  I have a very deep understanding of the Catholic faith and the Christian faith as a result of that.

FROKE: When I say that religion is a strong part of your life in the way that you conduct yourself, I believe that I’m being factual because it goes beyond a strong sense of ethics, which you have.  

LOFTUS: Well, thank you.  I think that we have an absolute moral responsibility to do what’s right and to seek out the opportunity to do what’s right and do it.  I don’t think you can just sit back and not go and do things.

FROKE: You went to St. Bonaventure University in upstate New York.  There would have been other Catholic universities, so to speak, that you could have gone to.  Why did you choose St. Bonaventure?

LOFTUS: That’s a curious thing.  I went to a wonderful high school called Gonzaga High School in Washington, D.C.  It’s the best high school in the country.  I say that, and I’m going to make an anecdote out of it.  My oldest daughter, in her freshman year at Loyola College in New Orleans, when she was there they had a freshman orientation and started talking about where they went to high school.  One boy spoke up and said, “I went to the best high school in the country.”  And she said, “That’s what my father always says.”  And the kids said, “Well, I don’t know where your father went, but I went to Gonzaga High School in Washington, D.C.”  My daughter said, “That’s where he went!”  That was a Jesuit school and tough, a tough regimen and a good school.  Four years of Latin, two years of Greek, etc., and a lot of discipline and athletic competition.  A guy who was in my class a lot of people know – Pat Buchanan.  He was a classmate of mine.  Another guy was a couple of years behind me was pretty well-known too – Ed Bennett, the author and former Education Secretary.  

I went to work for a couple of years after high school.  My family was poor, relatively, and I saved my money.  I was looking around for a place where I would go to college because that’s what I aspired to do.  A friend of mine touted me on St. Bonaventure.  He said that it would be a very different experience and that I ought to go, look the place over, and think about it.  So I did.  I bought a train ticket and took the train to Olean, New York, and went to visit the college, and I fell in love with the place, the spirit that was there, the concept of education that was there and the sincerity of it.  St. Bonaventure was one of those schools that you have to want to go to.  You just don’t walk into it.  You just don’t walk by it.  It’s in a place that is a place that you have to go to.  I felt called there.  I felt like I really would go there and could really devote myself to getting a good education at a place that had a lot of good spirit and had a fine academic reputation and a fine athletic reputation.  It had a very good basketball school, at the time.  The weather was not too congenial with harsh winters in the snow belt of Western New York State.  But from the moment that I got off the train in Olean, I remember going out Route 17 and seeing the school come up, and I said, “This is the place for me to go to college” and I never regretted it.  It was a great school.

FROKE: You majored in literature.

LOFTUS: Majored in English literature, minored in philosophy and history with math and some physics.

FROKE: What do you regard as the most significant parts of your education from St. Bonaventure?

LOFTUS: There was a constant sense of learning, a constant sense of turning the page.  You move on.  You move from step to step to step.  If it’s literature, English literature, you start with “Beowulf” and you go all the way to that book that was published yesterday.  Words, thoughts, impressions in a relatively tight environment, not a big campus, not a lot of students.  There were students from all walks, from other countries and things like that.  But there was always this sense that this is a place where you can learn.  Really, the process of learning is teaching yourself.  We had professors or other teachers who lead you, but they lead you to learn.  So the place really impressed me with that, and I pursued learning.

FROKE: So it was an education that deliberately related the past to the present and also, then, gave you a sense of independence.

LOFTUS: You said it better than I did, yes.

FROKE: I didn’t say it as well as you did, but I summarized with a few pragmatic words.  

LOFTUS: I have a certain reputation for verbosity.

FROKE: From St. Bonaventure—and I’ll just mention this in passing and then we’ll go into it in more detail at a later time—you had your first encounter with cable in Olean.

LOFTUS: I had to work.  

FROKE: So those two years that you worked before you went to St. Bonaventure were not adequate to cover you financially.

LOFTUS: No.  No.  I worked my way through high school.  But no, I worked.  I needed to work, and I did work.  One of the jobs I had was tending bar in a little hotel, the Burton Hotel, in Allegheny, New York, which was not much of a hotel but it was a hell of a bar.  

FROKE: And I should say that he makes the best Manhattans, and I consume them.

LOFTUS: Once you’re taught how to concoct, you concoct.  So I was working in this bar.  Most of it was a shot and beer type of bar, a college bar mostly.  It was a March day.  As is not unusual in that part of the world, a snowstorm came up - a snow squall – in March.  All of a sudden, into the bar come walking these guys.  They’ve got all this rig on them, and they’re clinking and clanking and clinking and clanking and clinking and clanking.  They came in and were cussing because they couldn’t work in the snowstorm.  They sat down and commenced to drink a few beers and order hamburgers and stuff like that.  I started talking with them and jawing with them.  What they were doing is they were expanding the cable television system from Olean into Allegheny, New York, and upgrading it from five channels to seven channels.

FROKE: Did you have any awareness of cable at that time before they came into the bar?

LOFTUS: Other than the fact that I’d heard about it, but I had never seen it.  I had never seen a cable television picture.  This was 1960.  Television was big, but it wasn’t as ubiquitous as it is today, and I was raised in the age of radio and I never spent much time watching television.

FROKE: So it was your natural curiosity with these two people that came into the bar, to learn more about cable and what their business was.

LOFTUS: Well, not only that, but Ray Muldy, who owned the bar, was paying me $.80 an hour.  They told me I could earn $1.80 working with them on the poles.  Well, no contest!  I took off the apron and said “I’ll see you around, Muldy.”  What they were doing was when you build a cable system, you’re on the utility company poles.  There’s a thing called “framing the poles,” making them ready.  The cable was put on the poles by an attachment that’s a hook.  Then there’s a piece of strand, a metal strand, that’s put into that hook, and then the cable is latched onto that piece of strand, that piece of metal.  That’s how it hangs out there.  So my job was to climb the pole and drill the hole and put the bolt in while the other guys were following behind me to put up the strand.  I didn’t get paid the $1.80 an hour.  I got paid per pole.  

FROKE: Okay.

LOFTUS: So I thought that was a little bit of a thing.  But I wound up climbing an awfully lot of poles very fast.  I learned something the very first day.  A guy named Greg Tobin, from Hazleton, Pennsylvania, took me out and taught me how to climb a pole with a belt in cold, icy weather.  You don’t climb the dry side of the pole.  You put your belt up against the dry side of the pole and you kick off the ice with your hooks because that belt is what’s going to save your life and keep you up there and keep you holding you straight.  If you go around and you put it on the icy side of the pole, you’ll lose your thing.

FROKE: You’re going to slide down.

LOFTUS: There’s an awfully lot of guys with an awful lot of scars who climbed the wrong side of the pole.  That was the first lesson that Greg Tobin taught me was not only how to climb, but how to climb safely.

FROKE: And how to make the installation safely.

LOFTUS: And again, this was a hand bit that you drilled in with.  You didn’t have a nice, easy battery operated drill.  The power that was up there when you would work on poles that had cable on them, was AC.  There were tubes and these huge amplifiers, and it was a totally different experience.  Here I was – I came from Washington, D.C. where I would go back to Washington where we had the rabbit ears with the aluminum foil hanging off from them.  We’d get two or three or four channels of ghosts in the apartment house we lived in in Washington.  And there are these people in Allegheny, New York – they’re getting seven channels of television:  New York City, Pittsburgh, Buffalo, color, and …

FROKE: And it was clear.

LOFTUS: It’s a beautiful television picture.  I’m sitting there saying, “Something’s going to happen.”  This cable TV system in 1960 was owned by a man by the name of Bill Daniels, was run by a guy, managed by a guy by the name of Alan Harmon.  Bill Daniels is, of course, known as the “father of cable,” is one of my great heroes.  I love him dearly and he is a wonderful human being.  He didn’t even know it, but he got me started and introduced me to cable TV.  I earned a good living.  I then started traveling around and doing installations for other cable TV people in other places around upstate New York, and drops and things like that.  I kept a good interest in the business.

FROKE: Did you ever convert the unit-cost pole to an hourly wage?  Did it turn out to be about $1.80 an hour?

LOFTUS: It turned out to be about $4.20 an hour because I climbed fast!!  I’ll tell you, I was one upset boy the day that I ran out of poles.  I’m out there saying, “I’ve never made so much money in my life.  Look at this stuff.”  And they’re paying me for poles, and I’m up the poles.  They’re happy.  They don’t have to climb.  They didn’t like to climb.  Get this scrawny little college kid climb up the pole for us.  No, I was making money.  Then all of a sudden, okay, yeah, I show up.  I got the belt on and the hooks and they go, “That’s it.”  

FROKE: In your first encounter then with the cable industry, you demonstrated entrepreneurship which is one of the characteristics that the cable folks talk about as being a part of their industry, a part of their unique business relationship to the country.  

LOFTUS: I also had a great experience at the same time.  A cable TV engineer by the name of Fred Coryell came to St. Bonaventure.  He came to a physics class, and he held in his hand a little thing, and he said, “This is going to change mankind more than moveable type.”  The philosopher in me said, “Come on now.  Are you Mr. Guttenberg or something?”  He was holding a transistor.

FROKE: Okay, okay, okay.

LOFTUS: He went on to explain the nature of solid state technology and what that could do and how it could do it.  To a 19 year-old young man at the time, the quantum physics nature of that just blew me away.  It was hard enough understanding radio frequency and the transmission of electronic, magnetic spectrum and the power factors of amplifiers and how you could take electricity and modify electricity and modulate and create pictures and sound and send it somewhere.  You could broadcast it.  And then also you could take it and you could put it onto a cable and a wire and you could transport it.  Today it’s so de rigeur.

FROKE: You left that presentation believing him, then?

LOFTUS: I left that presentation overwhelmed.  I said, “This is really an extraordinarily exciting thing.”  The man was right.  He was talking about the fact that, for example, the cable TV amplifier itself used, in 1960 dollars, per amplifier, about $7 a month in electric costs.  He said that cost could be reduced to $.07 just by deploying solid state technology as opposed to the powered amplification process.  And it has!  Look at this TV camera that we’re looking at here.  It’s not even the size of a half a cigar box.  It has been within that last 40 -year period of time that this extraordinary explosion in technology has taken place since the invention of that transistor.

FROKE: In the early 1960s then, he was foreseeing digital communications.

LOFTUS: I don’t know if he had digital, but he certainly …  Solid state came from digital.  He certainly saw solid state analog.

FROKE: But whether he went farther …

LOFTUS: You were still in the days of the UNIVAC computer and everything else.  I think there were still tubes.  The real world that you were living in was high-powered electricity.  It was exciter tubes and things like that.

FROKE: With the enthusiasm that you generated then from that presentation and then also from your economic status where you did not have money, how did you take your next step, which was a law degree, in your education?  How did you put that together?

LOFTUS: I graduated from St. Bonaventure.

FROKE: How did you put it together now to go on to law?

LOFTUS: I always wanted to be a lawyer.

FROKE: Okay, okay.

LOFTUS: I’ll tell you the reason.  I had an uncle, my Uncle Mike Keogh, who was a lawyer.  He had a Cadillac car.  He had a nice house on Garfield Street.  He had a cottage in Rehoboth, Delaware.  His daughters were debutantes.  He had parties.  My brother and I, with my mother and father, grew up in a little two-room apartment in northwest Washington.  So I had an economic incentive.

FROKE: You were introduced to class structures very early.

LOFTUS: I was introduced to that, and he was like a W. C. Fields type of uncle, you know.  “I love you as much as any man can love a nephew.”  He gave me occasional encouragement, but he said, “I’m teaching you, Richard.  I’m teaching you by example.”  He was the first man who ever really confronted me with that and said to me directly.  It’s like the idea that if you give a person a fish, he’ll eat the fish, but if you teach him how to bait the hook, he’ll be able to feed himself all his life.  And he said that to me.  He said, “You know, I can give you money.  But that’s not going to help you.”  You’ve got to accept the fact that he was born as an immigrant and he made it.  “It’s out there for you to make it.  It’s the United States of America, the world is yours.  Go out there and get after it.  It’s the greatest country in the world.  It’s free.  You can do it.  You’ve got a good mind.  You’ve got a good body.  You’ve got your health.  Go get it.”  And he encouraged me to do that.  And he said, “By the way, what I’ve got, I’m keeping.”  I’m making him out to be a lot worse than he was, but he did encourage me that way.  He did not indulge in largesse, but a lot of encouragement and positive reinforcement – to ‘yeah, go get it, kid.’

So I did what he did.  I went to Georgetown Law School at night, which is what he did.  I worked.  I sold printing equipment and supplies and machinery.  Then I went and took a job in the court system.  I was a bailiff in the Court of General Sessions.  I clerked to judges.  Then I got a position in the United States Attorney’s office.  David Acheson, Dean Acheson’s son, was my D.A.  When I was at St. Bonaventure, I had worked on John F. Kennedy’s primary campaign.  So when Bobby Kennedy became Attorney General, I was able to parlay a certain amount of those connections into an appointment as special assistant to the United States Attorney for the District of Columbia.  I served in that capacity for a little bit more than a year.  When the president was shot, when President Kennedy was shot, David Acheson was my D.A., and I was his special assistant.  He left to go to Secret Service – to the Treasury Department – to reorganize Secret Service.  I could have gone with him and been a T-man, but I had had a run-in with the new D.A. who came in, and he invited me to leave.  Curiously enough, at that same point in time, I had written an article for the law journal, called “Cable and Copyright – the Coming Crisis.”  If you would take that article today and change portions of it, you could make it “Cable and Copyright – the Continuing Crisis.”  The issue had been joined, at that point in time, and cable had come into the purview, if you will, of the legal community because of the controversy over copyright.  So I had that published.  I took it to the National Cable Television Association that was on the 5th floor of 15th and H Street in the National Press Headquarters Building.  A man by the name of Bob LaRue was general counsel.  A man named Edward Whitney was president.

FROKE: He was the first president.

LOFTUS: He was the first paid president.

FROKE: All right.

LOFTUS: Bill Daniels recruited him from Western Airlines in Denver.  Marty Malarkey, I think, was the first president, but he was not paid.  He was pro bono.  Ed Whitney was the first paid president of the NCTA.  They had a mimeograph machine, which is a printing process, in the hallway.  A girl by the name of Beverly Murphy was the secretary.  So that was the NCTA . The National Cable Television Association was Ed Whitney, Bob LaRue, and Beverly Murphy.  I walked in and had this article, “Cable and Copyright – the Coming Crisis” and they put out a bulletin on a monthly basis or weekly basis or whatever.  I wanted to get it published.  Bob LaRue read it and immediately co-authored it by making changes.  Then he assigned it to Beverly Murphy and told her to type it up and put it out.  She said, “I can’t do that because the mimeograph machine is broken.”  

One of the jobs I had between high school and college was a printer.  So I said, “I can take a multilith machine apart in my sleep.  It’s like an M-1 rifle.  I’ll fix it.”  So I went out in the hall, and I took the mimeograph machine apart,  …


FROKE: Got all purple ink over you.

LOFTUS: Ink all over me and everything else, but I fixed it.  Then Beverly Murphy typed up the article.  I stood there with her, ka-ching, ka-ching.  It was a hand crank machine.  Through that curious beginning and then through my brother who had met a man named Robert McGehan. In law school we had an investment group.  We were night school guys.  There were guys in the patent office, guys who were accountants, all college graduates.  We were all in night school.  We all put a couple of bucks together and we had an investment club.  I told these guys, “One of the things we ought to look into is this cable TV thing because it’s…”  So one of my study group guys, Jimmy Proctor, was an accountant.  He was working for Cooper Brothers, Lybrand, Lawson, Montgomery.  He said that they were auditing the books of a company called Entron, that there was an investment looking to be made into the company by the Boston Herald Traveler Company.

FROKE: It was one of the early manufacturing …

LOFTUS: It was the company that I had climbed the poles for in …

FROKE: Okay, okay.

LOFTUS: … in Olean/Allegheny, New York.

FROKE: All right.

LOFTUS: They were up there putting in this cable system, and they had the general contractor.  Then there was a subcontractor, but it was Entron equipment that I had worked with.  I had changed tubes in it and done all sorts of stuff, hauled it up.  So I said, “I know that company – Entron.  They had the equipment up in Allegheny, New York.”  So long story short, we invested about $200 which was a lot of money to us at that time.  It was probably about half of our entire investment club funds – Delta Theta Phi – legal fraternity.  So we invested.  I convinced them.  I said, “This is good income.”  So we did which, Entron, when we bought it was 1 7/8 - $1.78 per share.  Of course one of the guys was a broker…so we bought the stock.  Well, the deal with Boston Herald Traveler went through, next thing you know, the stock’s up to $8.00 a share.  Everybody said, “Let’s sell this stuff!”  I said, “I don’t want to sell out my piece of it.”  They said, “Okay.”  I got ten shares and they sold off most of the other stuff and had a beer party.  

My brother invites me to go over to this guy’s house one day.  I go over to this man’s house and the new D.A. has invited me to leave – “Please leave.  I want you to go.”  And I went over to Mr. McGehan’s house.  We get talking, and Mr. McGehan asked me what I’m doing.  I said, “I’m special assistant to the U.S. Attorney, District of Columbia.”  I said, “What do you do?”  He says, “Well, I run an electronics company.”  I said, “Oh, what kind of electronics?”  He says, “Well, you’ve probably never heard of it.  It’s something people don’t have around Washington here – it’s called cable TV.”  I said, “I heard of cable television.  I know what cable TV is.”  He says, “You do?”  I said, “Yes.  What’s the name of your company?”  He says, “Entron.”  I said, “Entron?  Not only do I know your company, number one, I used to work for you – in a manner of speaking – through one of your subcontractors climbing poles up in Allegheny, New York putting in your LHR 1 amplifiers.”  He looked at me.  I said, “Not only that, if you go back and check the books, the records of your company, I’m one of your shareholders.  So what are you going to do for me today?”  That was about 4:00-4:30 p.m. Sunday afternoon.  11:00 that night, in the Entron plant in Silver Spring, Maryland, I became assistant to the president of Entron.

FROKE: Was this after you had earned your law degree?  Very close?

LOFTUS: I had earned my law degree.  I had the privilege of arguing cases because of my position in the U.S. Attorney’s office, but I had not passed the bar.  I passed the bar a few months later.

FROKE: In Maryland.

LOFTUS: In Maryland.

FROKE: Getting back to Entron at a later point in our conversation, did you practice general law?

LOFTUS: One of the first things …

FROKE: In the Attorney General’s office it was criminal law.

LOFTUS: I prosecuted.  I put people in jail, including Gus Hall of the Communist Party.  I generally associated with cases …  but also did civil.  I did a lot of civil pleadings.  But most of my efforts were criminal.

FROKE: And then even though you did get licensed in Maryland, you really did not practice law in a general sense?  Your cable career was moving ahead so fast that—

LOFTUS: Other than the fact that, well as …

FROKE: You applied it.

LOFTUS: I applied it every day.  It’s interesting that law is really … The study of law is a study in the procedure and analysis.  It’s amazing it produces so few analytical thinkers.  It really is a study in analysis, and it was taught to me that way.  Georgetown was a case study program law school.  You studied by case.  You were taught by case.  The question was always asked, “How would you do it differently?”  And you were graded in a competitive way.  We started in my freshman class at Georgetown Law School with 400.  We graduated 92.  Look to your right, look to your left, look to the guy in front of you, look to the guy in back of you – because only one of you is going to make it.  Only one of you is going to graduate.  You had competitive grading and you had to argue against each other in class.  When you get guys who are really up on it, and you’ve got a contest with them…but it was a good experience and something I used from the first day I walked into Entron.  Here was Bobby Readen who was in charge of construction.  Bobby Readen from Bilton, Alabama, who was a boot-kicking engineer, a technical guy, in charge of construction.  He knew how to construct a cable system.  There was a guy named John Leonard who was the lay-out guy, laid out the system and mapped out the system.  They were writing a contract to build a cable TV system in Huntsville, Alabama.  I said, “What are you guys doing?”  They said, “We have to write out this here contract to get job down in Huntsville.”  I said, “Give me that!”  I go up to McGehan and said, “Do you know what these guys are doing?”  He said, “Yeah, why do you think I hired you?”  And I did everything.  McGehan had me do everything.  I ran the production line.  A guy came up to him and asked him—he needed a raise because his wife wanted to move into a bigger house.  McGehan said, “What do you mean?  I just gave you a raise.  I can’t give you any more raise.”  This guy ran the production line.  The guy said, “If you don’t give me a raise I’m going to quit.”  McGehan says, “You can’t quit.”  I was there, sitting in his office.  The guy says, “What do you mean, I can’t quit?  Are you going to give me the raise?”  He says, “No, I’m not going to give you the raise, but you can’t quit because I just fired you.  Get out of my office.”  And the guy did.  And McGehan looked at me and says, “Don’t ever let anybody intimidate you.  Don’t ever do that.  It’s not his company.  It’s not my company.  It belongs to the shareholders.  You can’t make demands upon me.  I don’t make improper demands on him.”

I looked at McGehan and I said, “What are you going to do now?”  He says, “What do you mean, what am I going to do now?”  I said, “You just fired him.  We’ve got production going on.”  McGehan says, “Yeah, go take care of it.”  So I went down, and until he hired another production manager, I’m down there with the guys on the line and the women on the line with the soldering guns and everything else and looking for schedules…

FROKE: I’m going to get back to that in the questioning in a little while.  Right now, I’d like to go back to the personal side of your life again.  At what point were you married in your career?

LOFTUS: I married a college sweetheart.

FROKE: From St. Bonaventure?

LOFTUS: From St. Bonaventure.  We met at St. Bonaventure.

FROKE: And this was Sylvia.

LOFTUS: Her name was Sylvia, Sylvia Mariani.  We married while I was still in law school in 1964.

FROKE: And you had three children.

LOFTUS: Three children.  We were married for 26 years.  We had three children, our daughter Marie, my son Jerome Peter, and my daughter Genevieve.

FROKE: And what is Marie doing now?

LOFTUS: Marie is a teacher in a magnet school in New York City teaching English literature.  She got her undergraduate degree from University of Massachusetts and her graduate degree from Boston University.  She’s a doctoral candidate as well at Columbia.

FROKE: And Peter?
 

LOFTUS: Peter is working in the entertainment business.  He is currently producing a record with Christine Andreas who most recently was the star of the musical “The Scarlet Pimpernel.”  Christine is a wonderful person.  She was the female lead.  She was originally started out in Broadway.  She replaced Julie Andrews in “Pygmalion”—[“My Fair Lady.”]  Then she married and had a child and took care of the child who unfortunately is autistic.  So she took off eight years to help raise this boy and get him old enough.  Then she went back to Broadway shows and was in “The Scarlet Pimpernel”.  She’s done one album, and she is now doing another one with my son, Peter producing it.

FROKE: You have a great deal of pride in Peter’s musical abilities.

LOFTUS: I’m not a musician.  I don’t have any musical competence whatsoever.  I can’t hold a note, I can’t read music.  I love music.  I love music!  Peter is a natural, and he’s also a very good entertainer.  He’s a juggler and a good wit.  He’ll do stand-up comedy.  He now has a role playing the piano in a movie with Robert DeNiro.  So he’s still aspiring to …

FROKE: … break into the entertainment.

LOFTUS: … break into that entertainment business where you have to get the break.  But he’s been at it resolutely since he was at the University of North Carolina in Asheville.  He’s studying under Bob Moog who invented the synthesizer.  He’s very adept in the keyboard.

FROKE: And Genevieve?

LOFTUS: Genevieve is here.  She’s living here in Lake Lure, North Carolina.  She and her husband, Mark, are working in various enterprises that I’m involved in too, as well as running West Point Farms.  Also I have an interest in a fish business in Washington, D.C. and they’re in charge of the Internet side of that business which you can do from anywhere.  So they’re doing that and living here and we’re very, very happy that they’re here in our community.

FROKE: When Genevieve was married, West Point Farm was the site of the wedding.

LOFTUS: Genevieve was the inaugural event.  We first turned on the lights and everything worked.  We had 150 people here, she was married in the grotto and her reception took place in the pavilion.  She spent her first night here with Mark in the cabin.  We had a grand old time.  It was a great party.  Also I’d go on to say that I divorced my …  Sylvia and I are divorced and then I remarried my current wife, name is Laurie.  I’m very lucky to have her in my life.  

FROKE: And Laurie, then, is very much a part of the West Point Farm also.

LOFTUS: Oh yes.  She’s the Girl Friday.  She does … You name it, she’ll do it.  It’s her garden.

FROKE: She has a strong interest in equestrian.

(Rain and wind interferes with some of the dialogue from this point forward)

LOFTUS: Yes.  She’s a good rider.  Genevieve was – I brought her down to the grotto on her horse.  Her horse is named Miracle.  Laurie’s horse is named Silko.  Miracle is a great story as a horse, why she’s named Miracle.  She was born stillbirth.  The veterinarian and the man who owned her—she was a colt.  She had come out, and her mother died in giving birth to the colt.  The colt was stillborn.  This veterinarian and the owner grabbed a hold of the legs and slammed the horse against the side of the barn to start its activity.  They did that.  Then the horse got up.  Of course, the first thing a horse does is stand.  So the horse stood.  They had removed its mother.  So this man who owned the horse walked outside and sat down on a well, on the side of the well, and the horse came walking over to him and started licking him and tried to sit down next to him, actually tried to sit down!  The veterinarian said, “This is bad.  This little horse is trying to act like a human.  He thinks you are its mother or something.”  So they went in to Rutherford to Walmart and they bought jars of Vaseline.  They rubbed the horse all down with the Vaseline.  Then they had a mare who had had a foal that died.  They took the mare and they took this colt, all rubbed down with Vaseline, to the mare whose foal had died, and put it with her.  She started licking it and adopted this horse and they named it Miracle.  She’s a wonderful horse.

FROKE: That’s an amazing animal story.

LOFTUS: True story, true story, and a great one.

FROKE: In addition to West Point Farm that you’re developing as an enterprise for the recreation and resort field, you mentioned the fish, as you characterized it, business in Washington.  The name of the company is Ocean Pro.  We have talked earlier about what the rationale for the founding of that company was.  Could you talk just a little bit about that?

LOFTUS: There was no real rationale.  I had a small interest in a restaurant.  A young man who worked for me in the cable TV business by the name Gregory Kasten, started working for me when he was 13 years old.  He was running this restaurant.  He had graduated from college, went to Bentley College in Massachusetts, graduated from college, went to Washington, D.C., went to work in this restaurant of which his uncle is the principal owner.  I was a small limited partner.  He couldn’t get good fish, couldn’t get consistently good quality fish, and it’s a seafood restaurant.  It’s called Tony & Joe’s.  It’s on the waterfront in Washington.  It’s a great restaurant.  If you’re ever in Washington, go to Tony & Joe’s.  So he came to me and he says, “We can’t get good fish.  Washington, D.C. doesn’t have a good company that puts out good quality fish.  I want to start cutting our own fish.  I want to start a fish company.”  So I said, “Fish.  You want to be a fishmonger?”  But long story short, I said, “Okay.”  So I lent him $10,000.  The company is now doing about $22 million a year gross volume in fish in restaurants in Washington, D.C…Baltimore, Richmond, Annapolis, greater Washington, D.C. metropolitan area.  If you get a piece of fish at the White House, you got it from us.  It’s a very high quality cutting house.

FROKE: And what it was was an emphasis on customer service, emphasizing fresh fish.

LOFTUS: We were the first, and still are, the only company …

FROKE: … that guarantees freshness.

LOFTUS: Not only do we guarantee it, but 24 hours a day, 7 days a week, we’ll deliver a fish.  What happens in the restaurant business is that you can get these …  all of a sudden here all these people show up.  They all started ordering from the seafood restaurant.  If it’s a Sunday and a crowd just shows up and you start to run out of salmon, you don’t want to have people say, “I’ll have the salmon” and you have to say, “Sorry, we’re out of it.”  You call Pro Fish, Ocean Pro, and we’ll deliver it to you.  We’re always available.  We’re not the cheapest to the restaurant owner, but we’re consistent, high quality, dependable.  We’re now expanding the business going off on the internet, and we’re selling prepared foods, smoked.  We have a line of fish.  We have jerky - we have fish jerky.  We have trout burgers.  We have shrimp burgers and tuna burgers and salmon burgers and crab cakes.

FROKE: I would imagine, as you go on to Internet with your marketing, some of the international experience that you’ve picked up in cable is playing a part in your role in the fish business as well.  

LOFTUS: It’s not a hobby.

FROKE: You’re serious about it.

LOFTUS: I’m serious about it.  I’m an investor.  I’m a director of the company.  I’m a shareholder.  I’m not the principal shareholder.

FROKE: And you’re serious about it in a broader way, too, which is environmental.

LOFTUS: Right.  I think that fish, as a source of food, is the last source of food that human beings have depended upon the hunt to obtain.  We’ve hunted it out.  The hunting grounds for fish are depleted.  Georgia’s bank is depleted.  There’s no fish there.  There’s no cod.  There’s no haddock.  It’s not there.  And it’s not just that we’ve polluted things – and we’ve done that.  But we’ve fished it out.  The technology came to the point where these huge boats with huge netting capacities and the electronic technology to spot one single fish 600’ down and go get it.  So the fish didn’t have a chance.  We plundered and squandered our fishing resources.  Alaska and Georgia’s Bank, the Atlantic coast, the New Bedford fishing fleet is now fishing off of Florida because there’s no fish off the shores of New Bedford, and there’s plenty of boats for sale in places like Gloucester and what have you.  People who used to make their money from the sea cannot make their money from the sea anymore because the sea has been plundered.  So what is now happening is the technology is evolving and fish are starting to be farmed – not starting – it’s being farmed.  For example, probably about 80% of all salmon consumed today is farmed, either in Norway or Scotland or Ireland or Canada or Chile where the environmental characteristics of the area support that type of activity.  They’re difficult to farm.  Salmon are born in fresh water.  They swim upstream.  They’re born in fresh water and then they grow in salt water.  Trout are born in salt water and then grow in fresh water – that’s sea trout.  Mountain trout which are raised here, there’s only a handful of places in the United States of America where you can raise trout.

FROKE: It’s significant.

LOFTUS: Significant – and cost effective –I mean you can raise them in a bathtub.  In a cost effective way, you need a lot of water.  The water cannot be below 52 degrees.  It cannot be above 72 degrees.  It has to be constantly running, and you have to feed them, control them, contain them, and all the rest of that.  Also, every single trout, rainbow trout, you go to a grocery store, a restaurant and you order trout, trout on the menu – it has to be farm raised because all the laws in the states now prohibit restaurants or retail stores, grocery stores, from selling wild caught fish.  So fish has to be farm raised.  That trout, when it’s about 6” long has to be inoculated with an antibiotic because otherwise the attrition factor for a disease that affects them can wipe out the entire colony.  So when you eat a piece of trout, fresh water trout, you’re eating a fish that has been vaccinated.  It has received an antibiotic.  I’m learning all these things about this part of the chain.  We have our own sources of supply down in Chile for salmon.  I’ve found that the salmon are being fed by certain salmon farmers a diet which is high in protein but it’s vegetable.  It’s soy, soybeans.  And the fish love it.  And they chomp it right down and they get all fat and beautiful.  The problem is that you may get three oils in the fish which is the healthy part of the fish are going like that.  That’s because their diet, which is supposed to be sardines and smelts and other marine product that they used to eat, has been doctored and they’re being fed vegetable protein.  So they’re high in protein, but the real benefit of fish, the Omega-3…

FROKE: …fight cholesterol.

LOFTUS: …fight cholesterol, they fight heart attack, etc. etc., all those things – the brain food side is going like this.  Not our fish.  Our fish are fed marine based feed so it’s a natural process for them.  But it’s part of the things I’m learning in terms of the quality of the business, in terms of how you are able to provide this product into a marketplace.  It’s been a real education.

FROKE: Dick, when we began visiting today, and the date is January 13th and the place is West Point Farm in western North Carolina, the temperature was up to about 70 degrees.

LOFTUS: It’s now down to about 50.  

FROKE: And I do notice …

LOFTUS: I’m sitting here thinking “why did we ever come outside here?”

FROKE: I do notice that you have a sweater over your shoulders so if you’d like to take that sweater off and put it on, …

LOFTUS: I’m not uncomfortable.

FROKE: You’re not?

LOFTUS: No.

FROKE: Are you sure?

LOFTUS: The 70 was … I went to St. Bonaventure, you know!  Are you kidding? I used to do a radio show at WHDL AM radio for Pam Edsel.  I used to come out of the dorms and be in snowdrifts up to here, walking a mile.

FROKE: If you don’t stop that, I’ll start talking about South Dakota which was my home.

LOFTUS: That’s worse.  I know.  I’ve been there too, you know – cable TV – I’ve been in every single state.  You travel around, you meet people and they say, “Where are you from?”  And I say, “Horseheads, New York, or Oshkosh or Wichita, Kansas.”  They’ll say, “Wichita, Kansas?  Yeah, you know Ted Hornel?  Judge Hornel?”  I said, “Yeah, I know him.  We chased a cable TV franchise there about 20 years ago.”

FROKE: You got to know a lot of those then as you began in what I would identify as the first major cable job that you had as special assistant to the president at Entron Corporation.  Entron, then, was one of the manufacturers of early cable equipment.

LOFTUS: Manufacturer and system operator.  They owned systems too.

FROKE: They had systems too?

LOFTUS: It was common for … Jerrold owned systems …

FROKE: Okay, yes surely.  Entron got into it too.

LOFTUS: SKL owned systems (Spencer Kennedy Laboratories).  It was common for the early manufacturers to also own cable systems.

FROKE: Was Jerrold the first manufacturer of equipment that was specialized for cable purposes?

LOFTUS: There’s some controversy over that, and I can’t really speak to it because I wasn’t there at that time.  There are other pioneers who were who could speak more accurately than I can.  I do know, for example, Spencer Kennedy Laboratories I’m pretty sure was the first company that had the front end equipment that they manufactured.

FROKE: So it depends on what specifically you’re talking about in the cable line.

LOFTUS: Very much like the computer industry today where it grew like topsy - this product would come from this and this product would come from this and this product would come from this manufacturer and they put it together.  It’s like cable…75 Ohm cable because of what was available in war surplus.  So the entire industry comes up around the fact that they said, “Hey, this is great.  You want to get television from the mountaintop, down here.  How do we do it?  We do it with cable.  Where do we get cable?”  You just didn’t walk into a—Radio Shack didn’t exist.  You didn’t walk into Radio Shack and say, “Give me some cable.”  You went home and said, “Where do they have cable?”  Cable that was lying around was the cable that had been manufactured for military purposes during the war.  It was field cable…and it was 75 Ohm cable.  That’s what guys used.  And the next thing you know, you’ve got a $75 million industry – analog.

FROKE: Okay.

LOFTUS: Digital is different.

FROKE: What was the unique position that Entron tried to establish for itself in the competition for cable equipment?

LOFTUS: One of the founders of the company was a man named Hank Diambra, a pioneer.  He invented the coupler, the multi-tap.  Television signals flow best through air.  When you put them on cable, you have to have a way to get them into the house.  The way that they originally did that was by drilling a hole into the cable, literally drilling a hole into the cable.  They put a device on top of that and they put a little pin on the cable and that gave you the connection.  Then they ran that cable into your home.  So you had an actual physical connection from the cable going from the back end of the TV set to the cable on the pole, and it was physically connected.  Needless to say, that created problems.  One of the problems that existed was the fact that the cable, more often than not, had electricity on it.  So you had that problem.  Then also, the cable was in an open environment so there’s all this twisting and turning and twisting and turning and what have you, etc., so the thing could work loose and you’d have—

FROKE: … the connection

LOFTUS: … deteriorated signals and all the rest of that stuff.  So there were a lot of problems.  That was called the fast t-tap because there was a little “t” that went in there.  Hank Diambra conceived of an ability to take the signal into a larger device that was a tap off device and put it in a circuit so that you could then plug in and change values and things like that.  So Entron had this multi-tap, and I won’t say anything about whether or not any other company stole the product or copied it and other things like that.  Entron also had front end, high powered modulators, and they were a very good, high end technology company.  But they had a tube philosophy in their engineering, and they were in the hunt.  We built a lot of cable TV systems, put a lot of amplifiers out there.  Some of them are probably still out there, still working, in its day.  

But it then ran in to two problems.  One, it was behind the curve on the solid state approach.  It also got hit with a very curious problem in that it designed an entire amplifier series, and the company put all of its resources, financial resources, into going solid state, going transistorized.  They bought transistors from RCA, and the transistor spec, the specification sheet on the transistor, speced at 8 watts mono and they put it into the circuit at 8 watts.  

It turns out that the specification sheet was misprinted.  The 8 watts was maximum.  Entron put out this series of amplifiers.  They would go out and the amplifiers would be installed in the field and they’d work fine for several hours and then they would fail.  So they were modular, and they were pulled out of the modular housing and sent back to the plant.  People got them back to the plant, put them into their test rigs, turned them on, and they were fine.  Said there’s no problem, sent them back out in the field, worked for a couple of hours, it failed.  What was happening was the wafers in the transistors were opening up so the conductivity of the signals failing.  But as soon as they cooled down, they’d come back together again.  

So the company went through this horrendous period of time when its electronics, on which it had based its reputation, were failing, and nobody knew why until there was a visiting engineer from RCA.  We brought in everybody to look at this problem.  The visiting engineer from RCA said, “Oh, you’re running these things at max, wide open.”  The engineer sat there—this was all the first step with this technology.  These engineers were sitting there going, “What do you mean?”  They pulled out the spec sheet and said, “It’s nominal.  Oh, no.  We changed that.  That’s a misprint.  It’s max.  It’s 5 watts nominal.  8 watts are max.”  So they were gunning these things up with too much power.  But the transistor didn’t blow like a tube.  It just failed and then healed and failed and healed.

FROKE: Did the correction get in in time to save Entron at that time?

LOFTUS: What happened at that same time is the company went through a management upheaval, Bob McGehan was forced out. Boston Herald Traveler had bought the company, the company had good cash flow, the Boston Herald Traveler got in big trouble.  They had lost channel 5, they’d lost their newspaper.  They had channel 5 in Boston, Massachusetts.  They lost their license.  So that television station was a cash cow for the newspaper, and the newspaper wasn’t producing positive income, so they stuck a straw in Entron and sucked out all the cash.  So the cash that was being generated from the cable TV systems, that was being used to support the manufacturing, was taken and siphoned off for the newspaper business.  There were management fights over that, management upheaval, and the company failed.  A big lesson.  You could see it happening.  I saw it happening all around me.  I said, “This is crazy.”  But I literally watched the company be destroyed.

FROKE: At what point did you leave Entron to go with International Telemeter?

LOFTUS: 1967.  Entron was obviously an accident waiting for a place to most conveniently happen.  That was very obvious to me.  Also, when the management changed, I was tainted.  It happens, the politics of the situation is such.  So it was time for Richard Loftus to move on.  I received an offer from Gulf and Western, Paramount International Telemeter in California to go and be their director of marketing, marketing vice president.  And I took it – moved to L.A., wife great with child, one little baby, another one on the way.  I went to work for International Telemeter, Gulf and Western Industries, Paramount Motion Pictures – a big conglomerate thing, global enterprises.  Again I had a lot of duties across the spread of a whole phalanx of Gulf and Western subsidiary operations , although my major focus was at International Telemeter, which the original pay TV company.  They were the first company that developed a cable television converter.  I sold the first cable converter in the cable industry, a set-top box, which is now universal, ubiquitous.  We were the first company to manufacturer these, we had the patent.  George Brownstein, Bill Rubenstein, Pat Court had the patent on the original device.  I was with them only a year.

FROKE: They merged with Prime Cable?  Is that right?

LOFTUS: No.

FROKE: No?

LOFTUS: No, they came to me and said were shutting down the manufacturing division, just shutting it down.  I was given that task.  I had to go fire my boss, Bill Rubenstein.  They shut down the whole plant.  So I had to go from Los Angeles to New York City every single Monday just about.  They just wanted to go get franchises.  So I was chasing franchises.  But also they shut down them.  I says, “Remember being given the order,” and they said, “Shut it down.”  “You mean all the manufacturing?”  “Yes.”  “What about these converters?”  “Sell them.  Find somebody else.”  Chuck Dolan stepped in, and he bought the rights to a conversion head – Oak Manufacturing.  It was the first time I ever had an experience with Chuck Dolan and realized what a genius he is, sharp too by taking advantage of opportunity.  

I was out there, and I had reached a stage where I said, “Wait a minute.  If I’m going out there and getting all these franchises for Gulf & Western (which later got acquired by TCI), but if I’m going out there and getting all these franchises, I think it’s time for me to go into the business…on my own.”

FROKE: And that’s when you founded Am Video then?

LOFTUS: That’s when I founded Am Video.

FROKE: That would put it about 1968, 1969?

LOFTUS: Yes, December 23, 1968, my 30th birthday.

FROKE: A good way to remember – a very significant event.

LOFTUS: I was 29 when I started, but it was incorporated on my 30th birthday.

FROKE: You incorporated in Maryland?

LOFTUS: Delaware.  It was a Delaware corporation.  But I had moved to Massachusetts.  I left Gulf & Western.  Sylvia, my wife, said she wanted to live in New England.  I said that I was going to go off on my own, I saved money, had low cushion, and had gotten some commissions from the sale of the converters and stuff like that.  I said, “I’m going to go off on my own.  Where do you want to live?”  So she said New England.  A guy named Bob Brooks had made me an offer to join him at SKL and go out and run a whole division of cable TV systems operations and have a piece of that.  So I moved to Boston.  Unfortunately, within a matter of months, Spencer Kennedy failed.  That’s when I just decided to go off on my own.  I made some contacts with some people, raised some money, and started a cable TV company.

FROKE: You started it at a time when cable was not moving that fast.

LOFTUS: No.  There were worse times prior to that.

FROKE: Than the early 70s.

LOFTUS: There were bad times when the FCC first came out with their First Report and Order.  I had a great teacher in law school.  His name was Harold McManus.  He said anytime a government agency is created to regulate an industry, it’s only a short matter of time before that industry ends up running the regulatory agency.  And that’s what happened in the Federal Communications Commission.  (Wind blurred dialogue).

The broadcasting industry controlled the FCC in one way and another.  The FCC saw its responsibility as being this protectionist, regulatory agency to the technical broadcasting industry.  Not that broadcasting is wrong or bad – it’s not.  It’s good.

FROKE: But the underlying operation was scarcity.

LOFTUS: The underlying operation was scarcity and a refusal to the opportunities for diversity and choice that cable presented because the broadcasters were in fear, and the movie theater operators were in fear.  “Stop cable TV” was on the marquee of all these motion picture theaters – everywhere.  It was like cable TV was this great demon.  So when the FCC came out with its First Report and Order, it literally struck down the industry.  That was the final straw at Entron.  It just…

FROKE: And SKL too?

LOFTUS: And SKL.  All these companies just could not recover from the fact that they were literally put out of business by the government.  There are other things that could have happened as well and did happen.  Jerrold survived.  It’s now General Instruments.  Magnavox and a few other companies that were out there did survive.  

FROKE: From a broader base.

LOFTUS: From a broader base.  They had more cable TV systems and other things and what have you – bigger, richer parents and things like that.  So there are some survivors, but there are an awfully lot of dead companies out there, engineering companies and electronics companies, that literally are government …

FROKE: … victims.

LOFTUS: … killed by government policies.  So I became very suspect and continually suspect of government policies vis-a-vis electronics or any other type of industry like the government thing about Microsoft.  Microsoft could go broke in a minute.  It literally could.  You could have all sorts of breakthroughs in software and they’re happening.  There’s the government who wants to come in and say that they’re going to say, “Here’s how we’re going to regulate this thing.  And here’s how they’re going to regulate this Internet,” and all the rest of that.  

We have to be very cautious.  Every night when I was in law school—I lived over in an area in southwest Washington.  From Georgetown, I went to law school at night, and I would walk past the Robert Taft carillon.  There is an inscription in the base of that carillon.  It says, “If we would keep democracy permanent in this country, let us abide by the fundamental principles that are set down in the Constitution.  Let us make sure that the government remains to serve the people, and the people do not become the servants of the state.”  That, believe me, is important and great words.  We have to be very careful.  So this industry, the cable industry, had, not only competition, but it had enemies.  Those enemies were the broadcasters.

FROKE: And the government had a tendency, then, to back up the competition which made it that much more difficult for the industry.

LOFTUS: Henry Geller was the General Counsel of the FCC.  We were in a debate, and he said to me (there was a debate going on), “If we wanted the people in Annapolis, Maryland, (where I had built a cable TV system) to get the television pictures from Philadelphia, then we’ll just have the television broadcasters in Philadelphia put more hype on their tower and more power on their transmission.”

FROKE: Which suggests that he didn’t know a great deal about physics.

LOFTUS:  One of my favorite guys, I don’t think  he knows much about law…

FROKE: Initially, Am Video did very, very well to the spread from Maryland, Virginia, to Delaware.

LOFTUS: Well, we were saved by HBO because what had happened is that the FCC again had come in with another set of rules, all sorts of gerrymandered things as to what signals you could bring, what signals you couldn’t bring, grade A contours, grade B contours, 35 mile rules, everybody was out with protractors drawing circles and everything else and trying to patchwork up to  ... and what have you.  Literally, the cable depression set in in 1974.  But something else also happened – that was the gas crisis.  So people stopped going to the movies.  Hollywood started taking the clothes off the women, and they came out with R-rated movies.  R-rated movies could not be shown on broadcast television.  So a brilliant man by the name of Jerry Levin, who had been taught at Chuck Dolan’s knee, and something called Home Box Office, said, “Here’s a real opportunity.”  So he went out and bought the movies.  With Dick Munroe and a handful of supporting people at Time-Life, started HBO.  It had been founded by Chuck Dolan but it gave a lift to it and came out with the movies.  

I had a cable TV system in Hoboken, New Jersey, and North Bergen, New Jersey.  They were languishing.  They were cash flow break-even.  And Annapolis was languishing, cash flow break-even.  Little system down in Lexington Park, Maryland was making money.  A system in West Virginia was making money.  The others were languishing and the company was literally stopped.  One of the things that we had in New Jersey was the home games of the Knicks and Rangers on Madison Square Garden network.  So we had the Madison Square Garden games so if you wanted to watch the home games of the Knicks and Rangers on television, it had to be on cable.  Time Life-HBO took that over.  Then I met with Jerry Levin.  We had these converters, and so with a company called A. J. Wood Marketing Company, they went down to (originally it was going to be at Allentown, Pennsylvania) Wilkes-Barre, Pennsylvania.  They interlinked the junk from One Columbus Circle on a telephone line that came across to my headend in North Bergen, New Jersey.  From North Bergen, New Jersey we went to Bob Rosencrans’ headend in Wayne, New Jersey.  From Wayne, New Jersey we went to a tower that John Walsonovich had in Sparta, New Jersey, from Sparta down into Allentown and from Allentown on over to Wilkes-Barre on the microwave.  A guy named Bob Stice and a woman named Minnie Harker and myself were on the streets in Wilkes-Barre, Pennsylvania, knocking on doors and installing the converters so people could watch a movie (“Sometimes a Great Notion”) and a New York Rangers hockey game for $6 a month – you got two movies a night that would cone on at 6 o’clock and the sports games.  We were getting 18-25% of the people taking that at $6 a head.  So I called up Bob Rosencrans and told him, told John Goddard who had a system out in Long Island that was languishing too.  I said, “This thing’s going to work!”

FROKE: The response is that good.

LOFTUS: It was that good.  20% …All of a sudden, “Hey, guess what guys – cash flow!”  The two nicest words in the world are “cash flow.”  So suddenly we get cash flow.

FROKE: You then began moving it into your systems?

LOFTUS: Yes.  I put one right away.

FROKE: What took you to Wilkes-Barre to participate in the marketing?

LOFTUS: They needed converters.  They needed my converters so I was the one who supplied them.

FROKE: Okay, okay.  All right.

LOFTUS: I lent them my converters.  I had a big receivable, a big payable to HBO for the Knicks and Rangers games.  My systems were not generating enough money to pay the bills.

FROKE: All right.  Okay.

LOFTUS: So I was willing to do anything.  If I lost the Knicks and Rangers games, I’d have to shut down the system.  So they carried me.  Jerry Levin carried me.  I was on his arm.

FROKE: There was a lot of that going on in the early days of cable.

LOFTUS: If you didn’t do it…

FROKE: Scratch the other person’s back in order to keep the industry going.

LOFTUS: Right.  I remember building cable systems.  I borrowed money from Jerrold’s Cy Pomeranz.  I remember him coming up to me, wrapping his arm around me saying, “Can you give me something, give me something.  You owe me $286,000.”  I said, “I can give you $18,000.”  “That’s a good boy, that’s a good boy.”  It was that type of stuff.  We were begging from Peter to pay Paul.  You have to remember that when we built this stuff – we put in a cable system – you had to put all your money out there.  You had to get the franchise; you had to get the license; you had to go get the contracts from the telephone company and the power company to get up on the poles; you had to get the link ready all done and you had to pay for that up-front to the telephone and the power companies; you had to have insurance; you had to have bonds and all the rest of that stuff.  Then you had to go out there and get the equipment.  You had to design the system, have the engineering done.  You had to go out, climb those poles, hang the cable, put in the amplifiers, and knock on the door before you had one sale.  Then you got all that stuff done, and you’re out there doing it and then the federal government came along and went, “You can’t have that and you can’t have that.  You can’t do this, and you can’t do that.”  They even had a ruling that said that Home Box Office couldn’t show a movie –it was a private company—Home Box Office couldn’t show a movie that had been produced within the last 5 years or that was older than 20 years.  

FROKE: Again protecting the broadcasting industry and the motion picture industry.

LOFTUS: I said, “What kind of horse nonsense is this?  Who do you guys think you are?  This is a private company.  We have a right to go out and buy a movie and show the movie.  We have the copyright rights.”  They stepped in and said, “No.  We’re the Federal Communications Commission, and we’re going to tell you that we don’t care what the copyright holders say, you’re not going to be able to show it.  Only broadcast television stations can have a movie that’s younger than 5 years old or older than 20. So they’re going to determine who got the product. The federal government, right? And every time they do it, see, and they did it and they said it and we took them to the Supreme Court, we take them to court, take them to court—we beat their pants off them every single time. All the way up to the Supreme Court. I can remember Mr. Justice Brennan with Louis Nizer making a statement in front of him. And Mr. Justice Brennan said, “Now wait a minute. If I put an antenna on top of my roof and I get a signal through Philadelphia, can I watch it?” And Louis Nizer said, “Yes.” He said, “What’s the difference from that or some company coming in and putting up an antenna, getting a signal from Philadelphia and bringing it to my house?” And Louis Nizer started talking about how all the people who depend upon copyright and the little guys—the actors and actresses and grip men and everything—and Mr. Justice Brennan just turned back in his chair—my God, what is this? And I just sit down and I’ll never forget—I was sitting next to Bill Holdensteen, the president of  … we won. We won. And they’re right…

FROKE:  Then satellite communications came along and microwave, which end the telephone lines, which were expensive and probably were not feasible for national networking of Home Box Office. With satellite, Home Box Office expanded, exploded; programming expanded, exploded; and suddenly cable television was something more than it had been.

LOFTUS:  Right, because an extraordinary phenomenon took place and it’s like water seeking its own level.  The true programming: intelligence, education, learning—it’s going to find its own level.  You can’t stop it—you can try.  You can try.  The Soviet Union tried.  Chinese Communists tried.  Castro’s trying, right?

FROKE:  The FCC tried.

LOFTUS:  The FCC tried. Even in this country, they try. They tried to stop  it. And you can’t; you see, you’re not going to do it.  People are entitled to it.  It’s their entitlement. You can’t protect the cable television industry or you can’t protect the telephone industry and you can’t protect any industry.  You don’t do that.  You have to let the energy flow because it’s going to and that’s human nature.  The glorious thing about this country is we have a Bill of Rights.  We have that right of free speech, freedom of expression. And the right to not only speak and the right to say it …

FROKE:  And those rights have a tendency to support the economic system.

LOFTUS:  They absolutely do because it could grow.  One thing I’m really proud of—two or three things in cable.  One of them is I really created a lot of jobs.  I mean there’s people out there working today feeding their family, what have you, in our economic situations that didn’t exist, you know, on the day I was born, the day I started in the business, they didn’t.  And other people have done that, too. The thing I’m really the proudest of is C-SPAN.  Gavel-to-gavel coverage of Congress to open to people’s homes … of course I then remembered seeing Teddy Kennedy walk out of the dressing room, dusty around his collar after he had all his makeup done. I’m sitting there saying, oh my God, what have we done?

FROKE:  What are we coming to now?

LOFTUS:  At any rate …

FROKE:  Your Am Video grew.  The last figure that I saw in reading about your background was 7200 subscribers in about 7 or 8 states.  What was the maximum subscriber count with the stimulus of HBO?  In other words, before you sold Am Video, how big did you get as a  multisystem operator?

LOFTUS:  37,000 subscribers.  Something like that.  We were one of the largest independent operators.

FROKE:  What would you say characterized your company’s—what personality traits, what business practices did you bring to Am Video that were unique?

LOFTUS:  The ability to talk other people into giving me money. [Laughter]   And franchises—yes, we can do that when the … alone can do this …

FROKE:  Consumer service: that’s what I was leaning toward.  Was there anything unusual with the service that you gave your subscribers?  You promised a certain product and you delivered that product.  Did it go beyond that?

LOFTUS:  I’ll give you one example.  I was president of the company and at one point in time I think we had 64 employees or something.  I was in North Bergen and all of the service personnel were out. A phone call came in from a customer who said his cable wasn’t working. And we said, well, we can’t get somebody there until like 8:00.  He was an Orthodox Jew and he said, “I’m going to go into the religion at sundown on Friday.” It was a Friday evening around this time. Four something.  And he said, “You can’t come into my house after sundown. You know, I’m Orthodox …”  Of course, I’m sitting there saying to myself, so he’s going to watch television?” At any rate, I said, “OK, where’s he live?”  I got in my car and drove to his house.  I went into his house and he had the TV tuner tuned to a different channel.  This happened a lot in the early days when we first started using converters because we had to have converters there.  The TV channel had to be set to channel 3 or 4 or something like that … you did all your tuning with the converter.  So they hire a babysitter or something else and they had came in and wouldn’t know they had cable and weren’t familiar with it and you spin the dial.  So I go walking into his house, 4:30 or something in the afternoon, Friday afternoon. He was there with the yarmulke and he’s getting ready to light the candles and I walk in to look at the TV.  I turned it to channel 3 with the home converter and I said, “There you are.”  I was in a business suit and he looked at me and he said, “What are you? You’re a service fellow or an engineer?”  I said, “No, I’m president of the company.  And there’s nothing more important to me than the customer.”  I said, “Leave that TV set tuned to channel 3.  Don’t turn the dial around. That’s all you had to do to fix this thing …worse than that.”  He said, “Wow.”  He took the time to write a letter to me, a personal thank you telling me how impressed he was the president of the company went out on a service call so he would have television on Sunday when he wanted to watch a football game after the holy day, the Sabbath was over.

FROKE:  We’re going to stop at this point and then pick up our conversation tomorrow. I mentioned earlier in the conversation if you were getting cold you could put the sweater on. You said you could survive. But my dog, who we brought down here to Lake Lure, is beginning to whine in the background and I think my dog is getting chilly.

LOFTUS:  Now my worker is coming in here with his hours…

END OF VIDEOTAPE

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Greg Liptak

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Interview Date: Friday November 12, 1999
Interview Location: Denver, CO
Interviewer: Gerry Yutkin
Collection: Hauser Collection

YUTKIN: This interview is being funded by the oral video history project of The Cable Television Center and Museum in Denver, Colorado and it's funded by the Hauser Foundation. My name is Gerry Yutkin and we're here talking with Greg Liptak today. Greg has been one of the pioneers; one of the leaders in the industry. Probably one of the most respected people in the industry I might say, and it's a pleasure to have you here and thank you very much for taking the time out of your schedule.

LIPTAK: Thank you, Gerry, and it's a pleasure to be here and thanks for those nice words.

YUTKIN: You've been in the business for a long time and one of the things I think about you is that you have moved from television production to cable to programming to marketing and now you're into a new field, so let's hear about that first and then we can go back and do some reminiscing.

LIPTAK: Okay, very good. Yes, Gerry, I am the chief executive officer of a start-up company here in Denver called Across Media Networks. About five or six years ago, the founder of Across Media Networks approached us at my previous gig at the Jones companies. I spent 15 years with Glenn Jones as President of Jones Intercable and then as President of Jones International. He wanted to know if the Jones companies would make a financial investment in Across Media Networks. I headed the due diligence team that investigated AMN, recommended to Mr. Jones that we make the investment. He decided he didn't want to but I became excited about what I saw five years ago and proceeded then about six months ago to make an investment in AMN. Some folks say I bought my way in and became CEO. So let me tell you what AMN does.

YUTKIN: Please.

LIPTAK: In the history of cable, dating back probably twelve to fifteen years ago, when we started selling local advertising on cable systems, when the national networks – Turner and CNN and MTV and Discovery – gave the cable operators two minutes per hour for local advertising sale, cable industry ginned up and developed local advertising sales teams in nearly every market. Well, a group of people found that by the creation of what were called photo advertising channels, a whole new revenue stream could be tapped at the local cable systems. It was generally realtors and automobile dealers principally, but also other kinds of retailers in a local community, and a channel would be created that would often have a static picture of a home and it would list the price and have a picture of the real estate agent and a phone number and there'd be sort of one picture after another. Well, it took a lot of money to create the artwork at the local cable system to do that. I mean, you had to have creative artists that prepared these frames and often by the time that you spent the money to get the artists you could not make a profit in this kind of activity. So a fellow here in Denver, who was with a small multiple system operator called Triax Communications Corporation, a fellow who is now my partner, Dave Downey, came up with the idea of centralizing that creative function. Having a group of artists at one central location that would prepare all of these frames and then they would be transmitted down to a computer at the cable system head end and then displayed on the cable system, thereby centralizing that function, you could make money at the local cable system. So that was Dave's original idea. Of course this started five or six years ago with some experimentation at Triax at a time when there were indeed computers, but the computer technology of course has exploded so that today these computers can do animated graphics, audio files and music can be presented as well as full motion video. So the whole thing changed. I became excited about that possibility, and then two other things happened to me in my experience that caused me to make this move to this start-up company. At the Jones companies, I was in charge of the Jones Radio Network and one of my responsibilities, and we built a terrific, the nation's third largest radio network operation, and we started to get a lot of advertising from the .com companies. Amazon.com, Ebay, Priceline, Barnes & Noble, etc... and for us this became a very big new revenue source and this was a year and a half ago. So I called a number of them and said, "Well, thanks for supporting us, but why are you doing that?" They all said, without exception, that you can build internet websites, but if you don't have a media engine, and that was the term several of them used, if you don't have a media engine to promote viewership of those websites, nobody looks.

YUTKIN: Sure.

LIPTAK: So, I got thinking about what Dave Downey was doing at Across Media Networks, and as strong as radio is, how much stronger would it be with television, that if in a local community you had a television opportunity to promote viewership of a website. And then I got thinking, why shouldn't the cable operator develop a community internet website. I mean, where is it written in stone coming down from the mountain that only the local newspaper shall do it or only city search shall do it. Why shouldn't a cable operator develop a website and use all of our skills to bring people to that website with local information. So those are the things that caused me to say, wow! This little developmental company here in Denver with about 110 employees, very creative computer technologists and graphic artists might be able to develop a new interesting niche for the cable operator. So I'm sorry, that's kind of longwinded but that's why I'm here and we've just started. It's going to take a lot of money to build this company over time and so we looked for an investor and I'm proud to say that some of my long time, very respected colleagues in cable now own us. Adelphia Communications Corporation of Coudersport, Pennsylvania, John Rigas, Timothy, Michael and James Rigas bought control of our company and we're rocking and rolling.

YUTKIN: So the cable operator would come to you and say, this is my town, let's make a website.

LIPTAK: Yes, exactly. They would say, "Come in. Let's build a photo advertising channel on cable and build for me a community website simultaneously." Because we have local salespeople in the community, then, we can sell local merchants participation both on television and on the website. And we've discovered two other things, Gerry, that I want to mention that are very exciting. We have software that we have exclusively licensed here in the United States called Billboard, which enables anyone who has access to the internet to go to a certain website, create a message and send that message then both to our television channel and to the internet website. So think of those possibilities in classified advertising, for example. We put the power of the internet and the power of communication at the fingertips of people and it's going to have an impact as we launch this in communities. It's going to have a major impact, I think, on the daily newspaper as we're able to bring a lot of this classified advertising material to the web and to cable.

YUTKIN: That's incredible. That's, in some ways, an extension of the local origination programming that was so very much a part of the franchising process in terms of awarding cable franchises in the '80's.

LIPTAK: Yes, you've hit it. In fact, one Saturday morning about four months ago, when I was pitching this idea to John Rigas, and you know John, in his home in Coudersport, Pennsylvania, when we pitched this Billboard idea, John said, "That is the culmination of the promises we made to communities twenty years ago." He immediately saw that putting this power in the hand of the people would open it up. So we have communities now where it's not uncommon to get four hundred community messages a month from organizations. My dream is that every single organization in a community will have a category on the website. In Denver, the Junior Symphony Guild will have its own category and members will be able to go in and see the latest information; not having to rely on a monthly newsletter.

YUTKIN: That's come a long way.

LIPTAK: It has.

YUTKIN: Let me go back now to the fact that I know that you started in TV production. You're a graduate of the University of Illinois, one of the better schools I think in the country, sometimes the football team is not as good as it should be...

LIPTAK: Most times. (Laughter)

YUTKIN: (Laughter) Well, we're going through a period now. I know you studied marketing and business and your first job was in what?

LIPTAK: My first job was in radio with a small radio group broadcaster in my hometown of Streator, Illinois, and then I went to work for them in a place called Decatur, Illinois where they owned a radio station.

YUTKIN: That's where, who's the big company in Decatur? Archer, Daniels...?

LIPTAK: Archer, Daniels, Midland. ADM.

YUTKIN: What did you do in radio?

LIPTAK: Well, you know, in a local radio station you do everything. So I was doing news, I was on the air as a disc jockey now and again, I was out talking to clients, I was writing copy.

YUTKIN: Sweeping the floors?

LIPTAK: Of course, turning on the transmitter. (Laughter)

YUTKIN: Got to remember to do that, right? How long did you do that before you went to...

LIPTAK: Well, actually I sort of did a little of that in high school and through college and worked at the college radio station at the University of Illinois and then got a commission in the U.S. Army Signal Corps and went to work for a few months at this radio station in Decatur before getting called up to the military. And then after that serving, I came back and got a master's degree at the University of Illinois and then went back to work for this local radio station for awhile.

YUTKIN: Okay, and then when did you go into television?

LIPTAK: I went into TV, I think, in about 1966.

YUTKIN: So that was about the time of Vietnam.

LIPTAK: A little bit after Vietnam.

YUTKIN: Well it was starting up.

LIPTAK: I'm sorry, that's right.

YUTKIN: And you were out.

LIPTAK: I was out of the military before the conflict really escalated, right.

YUTKIN: And then you went into TV production.

LIPTAK: Actually, I went to television news. I was looking for a job in sales but couldn't find a job in sales so I went into television news and worked for a number of months at WAND TV in Decatur, Illinois, the Champaign, Decatur, Springfield market.

YUTKIN: And where did you go from there?

LIPTAK: Well from there, it was interesting how personal life coincided. My wife, who is here at our taping, we were married and literally right after our marriage, I went to work for the Cox Broadcasting Corporation in Lakewood, Ohio through a contact at graduate school at the University of Illinois. A fellow I went to school with was a Georgian and went back to Atlanta and the Cox company was going to get into cable at that point and he was serving as a consultant to them and he said, "I know this guy, he's working for a UHF television station," which was a real strike against you at that point in those days, "it's an ABC affiliate," another strike against you because ABC was at the bottom of the heap, "so he ought to be a guy who knows something about the competitive market and cable's entering a competitive market, you ought to call him." So they did and I went to Lakewood, which was one of the first cable systems ever constructed in a big urban market.

YUTKIN: Did you sense the possibilities of cable at that time?

LIPTAK: No, I don't think so. This was before Pay Television, it was long before...

YUKTIN Early '70's? About 1971 or '72?

LIPTAK: No, Gerry, it was '68. This was '68. So the best cable could hope for at that point was that the government would open up the door and permit the importation of distant independent signals into a market and that was the premise upon which the Lakewood cable system was built. Lakewood is a suburb of Cleveland, so full national network service that we defined at that time as ABC, CBS, NBC and PBS – this was before Fox and UPN and all those guys.

YUTKIN: WGN was around though.

LIPTAK: Not on the satellite. So we were hoping that the government would permit this importation and we would bring into Cleveland signals from Canada and perhaps from Pittsburgh and that would bring the sports teams, principally from Pittsburgh and those markets and we'd have a product to sell. That was the hope.

YUTKIN: And?

LIPTAK: Well, then in 1968, the government decided we're not going to do that. So the whole premise upon which this cable system was built, the importation of distant signals, suddenly evaporated. In fact, that's constant theme of cable in the early days. We didn't know if cable was going to continue to exist. We had a lot of threats from the government that, well this cable is just a temporary phenomenon and when we get full transmitters licensed across America, there'll be no need for cable. It was that kind of thinking.

YUTKIN: So the thinking was contrary to a wired world, a wired country.

LIPTAK: Oh, indeed! Oh yeah, cable in those days was considered a parasite. Why was cable needed? All it did was take broadcast signals and retransmit them for a fee – a parasite on the communications landscape of America.

YUTKIN: Well, that was the broadcasters' thinking.

LIPTAK: Yes, exactly.

YUTKIN: But it still got them into areas that would not normally be able to receive their signals.

LIPTAK: Well, yes. That was the golden days of cable, the first growth of the industry. Bringing television signals into those communities separated by distance or terrain from television transmitters. And then, phase two was building in the markets where full network service was available off the air.

YUTKIN: So you got into cable maybe at the wrong time without any incredible insight?

LIPTAK: (Laughter) Or at the best time.

YUTKIN: Well, at the best time, because you stayed. But you didn't know then.

LIPTAK: I view it as the best time. I didn't know then. In fact, my wife has often mentioned we've had a lot of valleys in cable that often you don't recognize when you're in them. Sometimes you do recognize them.

YUTKIN: Well, if you're lucky. In hindsight, anyway. So the first job was in Ohio, and how long were you there?

LIPTAK: I was there about two years, or a little less than two years.

YUTKIN: And then what happened?

LIPTAK: Then, through industry contacts because we were doing some pretty creative things in Ohio, I was approached by the principals of a company that later became United Cable Television Corporation. It was then known as GenCoe, General Communications and Entertainment Company and the principals were Gene Schneider from Casper, Wyoming and his brother, Richard Schneider. The senior cable operating officer was a fellow from Moab, Utah, previously from Tulsa, Oklahoma, by the name of Ed Drake and then also at that time, partners in the company were Jack Crosby and Fred Lieberman and Ben Conroy. The two groups actually split up at one point and split the company and Crosby and Lieberman and Conroy took their cable systems and Gene Schneider kept his and I went to work for Gene in Tulsa, Oklahoma.

YUTKIN: That was quite a shift from Cleveland to Tulsa.

LIPTAK: It was, but the principals of the company were totally committed to the growth of the cable industry. Gene Schneider, then and today, although he's not particularly well known here in the U.S. now, but he is, I think, perhaps one of if not the largest cable television operators outside the United States. He's in Europe and the Far East and so forth. United Globe Com, or I can't remember the exact name, they just changed the name.

YUTKIN: UIP, or it was UIP and now it's – but it's the old United that merged with Phillips and back and now I know that they're very big in Europe.

LIPTAK: Very big in Europe. Well, back in 1968, Gene was an engineer, an aeronautical engineer that got into cable up in Casper, Wyoming through a contact that his uncle had with a local insurance man in Casper, Bill Daniels, and that's how that all occurred.

YUTKIN: When was this?

LIPTAK: This was in the very, very early days of cable. In the late '50's perhaps. Casper was one of the first communities in cable where signals were brought in by microwave to a cable community and Gene and his brother Richard built that cable system, and their mother. Their mother worked there. So anyway, Gene was just totally committed to the growth of the cable industry and he had a vision about what cable could be and that's why it was a very exciting time in Tulsa as we marched across America and gained a lot of really terrific franchises.

YUTKIN: I'd like to get to the franchising in a minute, but tell me what you did in Tulsa. What were you doing there?

LIPTAK: Well, I was involved in marketing, and for a number of years the development of marketing campaigns for all of the cable systems that the company owned and then a little bit later I was the senior operations officer in the construction and initial launching and building of all these cable systems.

YUTKIN: So that takes you up to about the mid-'70's?

LIPTAK: Yes, '75 actually, that's right.

YUTKIN: And that's when you went to Times Mirror?

LIPTAK: That's correct. I actually in 1975 joined the company called Communications Properties, Inc., which later became Times Mirror Cable Television. Communications Properties, Inc. was the split off company from GenCoe. It was Ben Conroy, Fred Lieberman and Jack Crosby. I'd maintained contact with them through the years and they invited me to come to Austin and so I did.

YUTKIN: So you moved from Tulsa to Austin.

LIPTAK: Tulsa to Austin.

YUTKIN: And then when did Times Mirror become involved?

LIPTAK: Times Mirror became involved, perhaps in 1979, I think. The Times Mirror Company was the first major newspaper company to make a big investment in cable and they were fairly rapidly followed by some of their buddies: The Chicago Tribune Company, Knight-Ridder, the New York Times Company, and so forth, but Times Mirror was first and the reason I'm told they got into cable, and Gerry this is fascinating, is that even then they were worried that some electronic delivery system would somehow take away some of their classified advertising revenue. Isn't it ironic? Back in the early days of Times Mirror, I heard all that discussion, cable is going to hurt our classified revenue stream and here I am at Across Media Networks and we're poised to start doing it. So it takes a little longer then you think.

YUTKIN: Yes, and I guess a lot of people have predicted the demise of newspapers for many years.

LIPTAK: Yes, newspapers will be around but you know, the newspaper game is a very tough game. The readership continues to decline and the whole trend with young people today, they are simply not reading newspapers.

YUTKIN: I think that my kids probably get more of the news from the internet and television then they do from reading the papers.

LIPTAK: Right, well you know, the newspaper has a basic disadvantage and that is the cost and the time of getting information on a piece of a very scarce commodity print, coming from wood and trees and getting it to your home. I mean that, when you think about it, that's a very cumbersome process compared now to what we can do electronically.

YUTKIN: How was it being involved with a newspaper company in terms of, you say it was almost a defensive position that they were taking, but did they leave you alone?

LIPTAK: No, at that point in their corporate life and up until when I left, they were in it for defensive purposes. I remember, there were fourteen of us that moved from Austin, Texas to Southern California and I was the last to leave. I remember the first budgeting process that we went through with Times Mirror and we developed plans to upgrade these systems and build line extensions and the senior executive that was in charge of us was just astounded because their experience was that you'd spend millions for a new printing plant but that printing plant you didn't have to put any more money into it for 25 years if you maintained it properly. And here were these crazy cable guys who wanted to build these line extensions to serve sparse areas that wouldn't pay out for three years. I mean, they just couldn't fathom that. So they made, in my judgment, a lot of mistakes in their corporate strategy. They blew cable, finally got out of it, sold a group of great cable properties to Cox, merged with Cox. They sort of fouled up their involvement in broadcast television and in print, broadcast print and so forth. Wonderful people, nice people, great American communications company, but was not committed to cable. Like, by the way, a lot of these newspaper companies that have gotten in and have now gotten out. Have you observed that?

YUTKIN: Yes, I remember the story with the Tribune Company. At one point they had cable properties and they wanted to get out and then I think they kept them for awhile and then ultimately they sold them to us, to Jones, when we were together in the mid-'80's and now they're out.

LIPTAK: A senior executive of the Tribune Company told me a couple of years later, it was the single biggest strategic mistake they every made selling the cable systems.

YUTKIN: Well they made a lot of money though.

LIPTAK: They made a lot of money, yes. For then, Gerry, but today they would have...

YUTKIN: Yes, well that's right. So that takes you up to the late '70's and the early '80's, which brings us to the days of the franchising. There are a lot of funny stories, there are some sad stories, almost tragic stories, but it was certainly one of the most exciting times I think that I could have gone through during that time, and I'm sure that you must have some much better war stories then I have.

LIPTAK: Well, I had a lot of fun. It was a fun time. Let me just try and put a couple of those things in perspective that everybody knows about. My new owner, John Rigas, was telling me the story that John owned this theater in Coudersport, Pennsylvania, that was his basic business and this travelling theatrical salesman came in and said, "John, you ought to get a cable franchise in this town. You've got lousy television of the air." And John though about it and finally a few months later he did and he got the franchise by going in and giving a check for $100 to the city. That was the cost of the franchise and that was the case in the early days. Ben Conroy told me the story, great story, Ben, who later became the chairman of the NCTA, he's actually the person who came up with the idea for The Cable Center and Museum, that was his idea. Ben was a senior operations officer at Communications Properties. Ben was a naval officer, a graduate of the United States Naval Academy and he knew he didn't want to have a career in the U.S. Navy, he was a Brooklyn boy. As I understand the story, and of course these stories get better every time they're told, but I believe this is the case: Ben was on leave at his home in New York. He was from Brooklyn, and he and his wife and a couple of kids were at the beach and he knew he wanted to get out of the Navy, didn't know what he was going to do. And so the story goes, he picked up a magazine and he read this story about this industry called CATV. He asked his father, who was a banker, what his father thought about that and his father said, "Well, you know, I read something about that, there's this guy over in Pennsylvania that's building equipment. His name is Shapp. Let's go talk to him." So supposedly Ben and his father went to see Milton Shapp, founder of the Jerrold Corporation, and later Governor Milton Shapp of Pennsylvania, about Ben's involvement and the Governor at that point at his desk said, "Yeah, I'd be thrilled. I've got all these towns that want to build cable systems." He opened his drawer of his desk and here were all these letters from these towns that wanted cable and he said, "Go through those, pick any one you want, you can have it as long as you'll build the cable system with my equipment you can have any of those towns." So Ben shuffled through the paper and picked up a letter from the city of Uvalde, Texas, which was just north of the Corpus Christi, Texas air station where Ben either knew about or had been stationed, and Ben said, "I'll take that one." So he piled, Ben has five kids – seven kids – pardon me. I don't know how many he had at that time, piled them all in the station wagon with his wife Toni and resigned from the Navy and off he went to Uvalde and built a cable system.

YUTKIN: When was that, approximately?

LIPTAK: Early – early '60's perhaps, late '50's, early '60's. I'm not exactly sure.

YUTKIN: A long time ago.

LIPTAK: A long time ago. So in the early days, then, cities that were separated by distance or terrain from television transmitters were anxious to get people to build cable like Bob Magness did in Memphis, Texas, or Bob Tarlton in the hills of Pennsylvania or the fellow up in Astoria, Oregon. So all this was going on. That was sort of one phase of the industry, bringing cable to these communities that were separated by distance or terrain, but then the second phase began, which is the phase I think you're most interested in.

YUTKIN: Well, that's the one with a lot of stories. So tell us about your experiences then.

LIPTAK: Okay. The thing that kicked off cable's growth in America was this device. The domestic communications satellite. The dish. On September 30, 1975, the Time Incorporated Company, headed by Gerry Levin, made the decision to put a signal up on the domestic communications satellite – the first time this had ever happened. So on September 30, 1975, a program, The Thrilla from Manila, with Muhammad Ali, was broadcast to two cable systems in America and that kicked off then, the ability for cable to become a national television delivery system with program services all across the nation. Up until that time, signals had to be delivered by microwave from one community to another or originated in a community, which was very costly.

YUTKIN: Or with bicycled tapes, as I think HBO was...

LIPTAK: Or with tapes bicycled, right. So beginning then in 1975, and I think probably through the period of 1982, nearly every major city in America went through the franchising process and it was not uncommon to, at the multiple system operator level, to be processing five or six franchise applications at any one point in time. And this was before word processors and all the computer equipment when these big bound books had to be typed and printed and assembled and delivered to communities, so it was quite a time.

YUTKIN: Which was the first franchise in process that you were involved with?

LITPAK It was at United Cable. I think literally moments after I arrived on the scene in Tulsa, we began the process of trying to get the franchise in the city of Tulsa, which was our home and that, I think, was the first and the biggest one that I was involved in at that point.

YUTKIN: And if that was in '75, that was before it became highly competitive, or much more competitive.

LIPTAK: Actually the Tulsa process was earlier, about 1970, because we actually, I think, turned on service in '72 in Tulsa, so that was really before '75.

YUTKIN: So after the satellite went up and much more programming became available with the superstations, that kind of triggered...

LIPTAK: I think that really triggered the major franchising activity across America.

YUTKIN: Have you got any horror stories?

LIPTAK: Oh yeah, I do. I remember one, of several of them, one was working on franchises up in what's called the treasure valley of Idaho and Oregon. Boise, Idaho through Napa, Oregon. Fourteen communities went together in a single franchising process and I remember I was in charge of that and I made fourteen trips in three months from Tulsa to Boise, Idaho. I always came Tulsa to Denver and then had to get on a United flight from Denver to Boise and every time I flew with a pilot by the name of Captain O'Neill, he had a controlled crash landing in Boise. So I'd get on the plane in Denver and the pilot would come on the speaker and I'd pray that it wasn't Captain O'Neill, but nine times out of ten it was Captain O'Neill. So that was interesting. We won the Treasure Valley. That was a good one. We had, at United Cable, a great deal of success early on with franchises. We got Chattanooga, Tennessee and we were kind of early in the game. We'd gotten Tulsa. At that point the company had Albuquerque and Hayward and San Leandro, California and on and on and on, Charleston, South Carolina. We were very successful in the early days. Far too successful because we didn't have the money to build the systems and later Gene had to sell a number of the cable systems.

YUTKIN: Well, tell me more about that. If they were more successful was there a tap dancing that was done or did they just have to pick and choose what they were going to keep and then sell?

LIPTAK: Yes, I think that's what happened basically. United Cable at that point kept Tulsa, its home base, sold off Albuquerque to the Tribune Company, sold Chattanooga and Charleston, because it didn't have any operations near there and kept the California properties. Sort of a judgment community by community.

YUTKIN: My experience was that situations like that, being looked at from the other side, from the community standpoint, and we had some major problems with that in New York State, wanted to prevent cable companies from franchising, obtaining the franchise and then turning them around and selling them for profit. I think what you're saying is that they didn't really intend to do that, at least United didn't.

LIPTAK: Not at all, no. United intended to be a builder and operator and was in many places.

YUTKIN: But maybe there were companies that were just getting franchises for political reasons and they're probably not around anymore, I bet.

LIPTAK: Probably not around, and often were not around shortly after the franchise was granted in some cases. It was a very tough process because it became highly political and highly competitive and there was the term use, the "rent a citizen". You'd go into these processes where the cities would adopt an enabling ordinance and then there'd be a mad scramble by eight or ten cable companies to try and get really powerful and influential local people as their partners and they were often let in without making any financial investment. They were given some equity in the partnership and their job was to deliver the franchise through their political power.

YUTKIN: I got in the business in 1979 with ATC, which is now Time Warner, and it was shortly after ATC had been franchising, I believe in Syracuse, and I think that was about the first time that they went with local citizens and the company, at least internally, was not all that thrilled about having to do that because it was almost a defensive thing. I don't know if the industry really enjoyed that because of the image that it gave, but they seemed to have no choice.

LIPTAK: Yes, one of the best organized franchise processes was in a community in Kentucky – Lexington, Kentucky – wonderful town that's turned out to be a great cable system. There were, I think, either seven or nine applicants for the franchise and I was with the Times Mirror Company at the time and they held the big franchise presentations in their convention center, three a night, in different rooms in the convention center, so the crowd would get up and move from one room to another. Very well organized, so the applicants could get set up. Lexington is a big horse town, horse country.

YUTKIN: Oh, yes, Churchill Downs.

LIPTAK: So we hired a California company. We hired Ed McMahon, who was very popular on the Tonight Show at that time, to be our spokesperson for Lexington, Kentucky and we recorded him at the Santa Anita racetrack in LA.

YUTKIN: But that's not Lexington.

LIPTAK: That's not Lexington. We had to be very careful not to shoot any of the palm trees. We shot him at the stables, actually, but no palm trees because they'd know he wasn't in Lexington and that was an experience. I remember we had to pay him 7,500 dollars, which was a lot of money at that time for 60 minutes work. We had to have a limo pick him up at his residence, bring him, it had to all be on TelePrompTer. His agent told us he would do one take, if we didn't get it in one take that was it, we still had to pay him and off he'd go. Those were the conditions. Ed McMahon was our spokesman, he did a great job by the way, but we lost the franchise.

YUTKIN: Any more? Go on.

LIPTAK: Yes, I think Gerry, my favorite story was from a little town in Oklahoma, Stillwater, Oklahoma, not so little, home of Oklahoma State University. Big franchise competition, a lot of interest. Stillwater was just far enough away from the television transmitters in Oklahoma City that there was a bit of a reception problem, so everybody knew we were going to have a gangbusters cable system here, everybody's going to want it. Well, a lot of local people were involved as parts of the teams that were going for the franchise and at one point in the proceeding, some local person got up and made these sort of inflammatory statements about one of the other outfits. All at once, these two guys rushed to the back of the room and got into a fistfight and we're all sitting there watching it and there's this fight going on with the locals. So there was intense competition. Intense.

YUTKIN: I know there were families that broke up over these things. We were involved in a franchise renewal in Columbus, Nebraska with ATC and long standing friendships went by the wayside and it was tougher for the local people because they had to live with it afterwards. Of course, if you had a good company, they delivered on what they promised, but I remember the story about a fight, I think between two council people in Green Bay when it was awarded. They were very, very emotional and I'm glad that's past us now.

LIPTAK: I guess I'm glad it's past us. It was really fun. It didn't seem like a lot of fun at the time, but in retrospect it was a lot of fun.

YUTKIN: It was fun if you won.

LIPTAK: If you won, or if you won your share. You didn't expect to win them all and especially if you got a good community.

YUTKIN: Yes. Let me go on to some of the people that you've known in the industry. You've known them all; you've probably worked with most or all of them. Who are some of the people that have been influential in your career. Some of the people that you admire, some of the pioneers that you've known and worked with.

LIPTAK: Alright, good, good. Some of these names may surprise you. Some of them you may not recognize because they may not have been around in the business for awhile, but the first name I would suggest is Leonard Reinsch. Does that name ring a bell?

YUTKIN: Yes. I had the privilege of meeting him, I spent some time with him and we did an interview with Newt Minow, who also mentioned Leonard Reinsch. Tell us about him.

LIPTAK: Yes, Leonard Reinsch was the chairman of the Cox Broadcasting Corporation and he had a distinguished career in building radio and television properties for the Governor Cox family of Dayton, Ohio and in connection with that, he was an advisor to the Democratic Party and the Democratic political candidates through his whole career. I respect him because he was the first major group broadcaster in America to get into cable and he and his company were roundly criticized for that – traitors. Traitors to the broadcast business. They got into cable. They bought the big San Diego cable system. But Leonard saw the future, he saw what that would do and so he is one of my heroes. One of the great people.

YUTKIN: I spent an evening with him when we were purchasing some properties and doing some transfers and I'm sorry that he's not part of this project. He passed away a number of years ago.

LIPTAK: Yes, about five or six years ago, perhaps. A real visionary and a real gentleman.

YUTKIN: A real gentleman, yes. Who's next?

LIPTAK: The next on my list is Chuck Dolan. Cablevision Systems Corporation. Chuck is the founder of Home Box Office. He then sold HBO to Time Inc. and started to develop cable properties in Long Island. In my judgment, his contribution was the development of HBO, but also he did and is doing something else and that is the packaging of cable program services. There was a point when in cable we thought all you should do is just sell basic cable, but Chuck led the way by packaging sports channels and HBO and basic cable all into one giant offering to the consumer and made the strength of the package much stronger than our sale of individual parts. So he's the king of packaging and to this day is still very active in the industry although he is, I think, retired. Semi-retired.

YUTKIN: He is one of the pioneers who probably will never retire. Those visionaries I think find it hard to give things up and always want to continue with some row of work. I remember in my early years, when we would look at the statistics in the trade publications, that Cablevision was always the one that had the highest pay penetration and way ahead of everyone.

LIPTAK: The highest revenue per subscriber. I think that's the case even today. Next: Gerry Levin. Gerry, the current chairman of Time Warner, back in 1975 was the executive who recommended to the board of Time Inc. that they should take their Home Box Office product to the satellite. And I've told a story about that. I don't know if it's apocryphal or not, but it probably embellishes upon the telling. Supposedly Gerry went into the board of Time, Inc. All of these East Coast Brahmans that ran this big magazine empire at that point.

YUTKIN: At that time, yes. Well, the Luce...

LIPTAK: The Luce family, etc... and Gerry made this pitch about the satellite and HBO and so forth and then he left the board meeting. Supposedly one board member said, "Who was that and what in the world was he talking about?"

END OF TAPE 1, SIDE A

START OF TAPE 1, SIDE B

LIPTAK: But Gerry sold them and they agreed to do it and so we launched on the satellite with these giant 33 foot dishes, it was a major project to build an earth station back in those days. You had to get zoning approval, FCC approval. Now we get it a meter and a half, but it was a big deal at that time. So Gerry Levin, in my opinion, is the father of... people say Bill Daniels is the father of the cable industry. I believe Gerry Levin is the father of the modern cable industry because he's the one that created the national service by means of the satellite. Ted Turner. Mouth of the South. Who would not agree that Ted has done so much for the cable television industry? At the time he took his independent station on the satellite roundly criticized by all of his buddies in the broadcast business but he stuck with it and built an incredible empire. So he's obviously one of our heroes.

YUTKIN: It's interesting that around the time that TBS became a superstation, I think United Video was putting WGN up and I think at that point WGN was not too happy about it and I think they fought it. I think that's come around to be the opposite and I think they're probably happier now than they ever dreamed they could have been. Who else?

LIPTAK: The next one is, and I'm not so sure that this is an individual, but it's the Qube project at Warner Cable and perhaps the individual should be honored is Gustave M. Hauser.

YUTKIN: The benefactor of this oral history program.

LIPTAK: Gus Hauser. They created the interactive service, struggled with it, a fledgling technology in Columbus, Cincinnati, a couple of other places and brought the attention of the nation's press, I think, to what cable's promise could be. Now none of those really worked out from a commercial point of view. They all turned into fairly standard cable systems, but it was an exciting time and in that group were people like Nick Davatzes at A&E and Larry Wangberg and other people like that. So the Qube project was a terrific one.

YUTKIN: Well, I think that it's coming to fruition now in a slightly different format.

LIPTAK: It is indeed. It is. Next on the list, and this is not in necessarily a priority order, would be the creators of AT&T BIS and that would be obviously Bob Magness and John Malone. Bob Magness with his incredible vision and quiet soft spoken gentleman from Oklahoma built an empire, brought in John Malone, who Bob has said several times in the press, he's the smartest son of a bitch I ever met. Brought John in to run his empire and they created this immense operation, which now is owned by AT&T and of course the programming side is AT&T. Maybe it will be spun out at a point but Liberty Media Corporation that owns interest or has management in, I think, it's over 90 different program services. So it's just amazing what's been created and a whole group of people surrounding John and Bob; J.C. Sparkman and Bill Brazile and etc, etc... I have a lot of respect for Mr. Schneider, who I mentioned to you.

YUTKIN: Gene Schneider.

LIPTAK: I worked with Gene for a number of years. He built a great domestic company, which he sold to John Malone and Bob Magness. Then taking some of those proceeds, started to build an international company and they are headquartered here in Denver. We don't see a lot of the people from UIH, but they're certainly here and if you read the trade press about international cable developments, certainly UIH is at the top of the list. So, what a company Gene has built.

YUTKIN: You know, a lot of cable companies were into international areas in the late '80's, early '90's. Why do you think they've been so successful?

LIPTAK: I think they have been so successful because they avoided Great Britain. Most of the U.S. domestic companies that got involved in international cable participated in the development of cable and telephony in the United Kingdom and cable never sold particularly well in the U.K. Even today, 24-25% of the subscribers buying cable is a pretty good number. So U.K. cable was very, very tough. Gene, in fact he told me this a number of years ago, that he did not like England. He did not like the U.K. He saw a, if you will, a more traditional cable opportunity in some of the other places that he went to like Israel and Malta and then with the Phillips Company in a number of places in continental Europe.

YUTKIN: In Poland.

LIPTAK: In Poland, yes, yes. So he avoided the very difficult times that 4 or 5 U.S. MSO's had in the U.K. and concentrated his efforts in what has turned out to be, in my judgment, more lucrative, better opportunities. At least then. U.K. cable, as you know Gerry, is starting to come around now, but it was tough.

YUTKIN: Yes, well but now telephony is a bigger portion of it than anybody ever dreamed would be in the U.K. in those days.

LIPTAK: Yes, yes indeed.

YUTKIN: You got anymore?

LIPTAK: I think that's it on my franchise stories. Oh no! I'm sorry. People, we're talking about people. I do. Well, I think the world of Ben Conroy. He was my mentor for a number of years at the CPI Company. Again, the visionary that created and came up with the idea of The Cable Center and Museum. I would put on the marketing side, I would sort of suggest a trio of people; John Sie, Jerry Maglio and Trygve Myhren, all people who experimented early on with multi-pay products. John's certainly the exponent of combining HBO and Showtime and Jerry and Trygve were the first cable operators to launch the multi-pay product in Wichita Falls, Texas. They developed it and it strengthened the whole category by bundling them together. And then the last person I just jotted down here, and I'm sure I'm missing a lot of people, is Leo Hindery. Leo brought this industry out of the depths of Wall Street's despair a number of years ago.

YUTKIN: Not so many, just a few.

LIPTAK: Not so many years ago, and brought it back through the force of his management style and personality and Leo did a great job in my opinion.

YUTKIN: He kind of saved it at a critical time. We should say that this is being recorded in November of 1999; it's not a secret, just prior to the millennium.

LIPTAK: At a time when Mr. Hindery has left AT&T and we're all waiting and watching the trade press to see where he lands, if anywhere.

YUTKIN: Oh, he'll land I'm sure.

LIPTAK: He'll land, I'm sure he doesn't have to land anywhere but he probably will.

YUTKIN: Again, like so many of the pioneers, I can't see him sitting back in a rocking chair.

LIPTAK: Indeed not.

YUTKIN: One of the pioneers and probably one of the most controversial people, who also had a significant impact on the industry, was the late Irving Kahn, who was the head of TelePrompTer.

LIPTAK: TelePrompTer, yes.

YUTKIN: Did you know him and tell us about your experience.

LIPTAK: I did know Irv Kahn. I mean, not well, I was a young kid at the time and he clearly is a controversial character. I remember him fondly in the respect that he was building a major company, he had some good people that were associated with him; Hank Simons, Les Read, people like that.

YUTKIN: Monte Rifkin?

LIPTAK: Monte Rifkin, yes, and Leonard Tow and I remember a number of speeches that he gave at various industry events, one of which is, we have to deliver on the promise of cable. That we can't make these promises to these communities without delivering, we've got to deliver quality customer service, we have to serve the communities, and I've always had a lot of respect for the positions he took.

YUTKIN: When was that, roughly? Was that during the franchising period, or earlier?

LIPTAK: I think it was actually a little earlier than that. Certainly before he went to the pokey.

YUTKIN: And he used to joke about that afterwards. He had a great sense of humor. I only met him once. He was very self confident, had strong opinions and I guess, generated a lot of controversy in terms of the man, but he certainly was one of the most influential people in the industry.

LIPTAK: He was a very colorful character. Short, rotund, smoked cigars and he was a drum major at the University of Alabama. That image of Irv Kahn as a drum major, I could never quite put that together.

YUTKIN: And he wasn't small then, he wasn't that small.

LIPTAK: No, he wasn't small then either.

YUTKIN: Let me go back to something a little bit more serious. We said you graduated from the University of Illinois in both marketing and business. We've known each other probably fifteen years or so, and I know you primarily as an ops person, as an operations person. A lot of people in this industry think of you as the consummate marketing person. Well, I think of you as a consummate ops person, other people think of you as a consummate marketing person. How did that come to pass? That's unusual for one person to be successful in both areas that are somewhat different.

LIPTAK: Gerry, I never thought of it in those terms. To me, the mission of the cable television operator is a single mission and that is to build a good plant, to market it properly, to install it correctly, to deliver good services, to bill people properly, to take care of their customer service issues. To me, it's a continuum of one thing and if at any point in the process, something stumbles, then the end is never achieved. So I never thought that I was making a major career move when I went from operations to marketing because it was sort of the same thing. And maybe it was because at United Cable, we were building cable systems in very difficult, competitive markets, where marketing was so important. In the early days of the business, who needed marketing? You'd build a cable system in a community, you'd hire the armory, you'd bring in a sports figure or a Hollywood celebrity, get all the TV dealers and in the space of a weekend, 40% of the people would sign up for cable. So who needed marketers? When I entered the industry as a marketer, there were four of us as full time marketers in the cable television industry.

YUTKIN: Who was that, do you remember?

LIPTAK: Well, there was Dave Webber from Jerrold, myself and two other people who I don't recall, but I remember at the time there were only four of us. But when cable started to move then into these big urban markets where no penetration was guaranteed, where you had to fight for customers, then the marketing challenge changed a lot. The marketer had to make sure that the plant was built correctly, that subscribers were installed properly, that the pictures were good, that the billing wasn't screwed up, that the programming was good. So to me it was all one in the same and at United Cable, I remember in a couple of the early systems we built, we had problems in one aspect or another and I complained and would get involved with the engineers, get involved with this department, that department. Finally, Schneider says, you've got the whole thing, because you know what that consumer wants and so you've got it. So don't screw it up.

YUTKIN: But now, were you primarily marketing or ops at Times Mirror?

LIPTAK: Primarily operations, but marketing and programming reported to me, so I was involved.

YUTKIN: But operations really is more concerned with line and bottom line responsibilities and generally speaking marketing has its own goals, but it's more a staff and the marketing people have, in my experience, a somewhat different philosophy and concern about the bottom line.

LIPTAK: To me it's all one objective and we've seen many cases where indeed the marketing people do have a different objective and I would say to you that when they have a different objective, the bottom line, the overall goal is not being served. I've seen that happen at several MSO's too, as you have.

YUTKIN: I've read some of your speeches over the years.

LIPTAK: Uh-oh.

YUTKIN: And there are some areas that you seem to speak out on perhaps earlier than other people did. One of them was quality customer service. Was that a reaction or was that an insight or was it just Greg being Greg?

LIPTAK: Well, to me it was just good business and probably because I had seen some lousy customer service in cable and I knew from my marketing perspective that you can't build an industry if you're not delivering quality customer service and so we had to figure out a way to do that.

YUTKIN: And what do you think the key elements to that are? Is that an unfair question?

LIPTAK: No, not at all.

YUTKIN: I know it's been almost institutionalized right now and there are guidelines and codes that must be adhered to, but what was missing at the core that is now pretty much common among most cable operators?

LIPTAK: Well, you know, starting with the basics in the early days, we had equipment that didn't work.

YUTKIN: That's a problem.

LIPTAK: I remember in Tulsa, Gerry, we had the first version of a 36 channel converter built in Taiwan. The company that built it shall remain nameless, but we started installing these things and we had 16,000 of them installed and I remember the technician or the chief engineer of the cable system coming in and saying, "We've got a problem. They're drifting." We said, "That's a new term, what does that mean?" He said, "Well, the signals are drifting, it means they're going off channel." And I said, "What does that really mean?" He says, "People don't have any television to watch." That's a basic problem! So we had to get engineers and a team in and replace 16,000 units – no mean feat. So we had converters that didn't work, we had amplifiers that would do strange things – when it got cold, they'd go out, when it got hot, they'd go out. So, step number one, we had to have a reliable distribution system and today we accept that but as you know, that often wasn't the case. We had major manufacturers in the business that would dream up a concept for new equipment, sell it to everybody, then they'd design and build it and it often wouldn't work. So point number one is, well you've got to have the darn system that works. And then once you've got that, then you've got to sell it properly to people. That was a new experience for cable in the early days because you didn't have to sell it, you took orders. Suddenly in these urban markets, you had to sell it. So you had to figure out, how do you do that? Direct mail, door to door, newspaper, radio, TV, a whole process had to be established there and then you had to install correctly. This is Abel Cable.

YUTKIN: The first icon.

LIPTAK: The first icon of the cable industry. I'm not sure how old this is, it's 30 years old, at least, perhaps 40, perhaps 35, I'm not sure. At the time, the electric industry association in America had a symbol called Ready Kilowatt. Do you remember that?

YUTKIN: No, I don't.

LIPTAK: Abel Cable was a direct steal, in my judgment, of Ready Kilowatt. But I have to tell you, literally two months ago, I was at a small town cable system and I went into a restaurant for breakfast and on the menu was a little ad for the cable company with Abel Cable on it.

YUTKIN: Abel Cable still lives.

LIPTAK: I thought, oh my gosh.

YUTKIN: I guess that's not copywritten. Who created it, do you know?

LIPTAK: I think it was created by the trade association that was the predecessor to the NCTA. It had a little different name, but it was copywrited. So marketing, home marketing, was a big issue and then all of the questions of installing people properly. Being at their home when you said you're going to be there. How simple that sounds, but how badly we did that in some of the early days for a variety of reasons. Dirt on the floor, and so on.

YUTKIN: Well, a lot of operations were run on a shoestring.

LIPTAK: Exactly.

YUTKIN: And the rates were low and they were regulated pretty severely, particularly in some small towns.

LIPTAK: One of my favorite installation stories occurred down in a place called Tyler, Texas at United Cable, a great cable system United had and one day we got this panic call at the corporate office about a serious installation problem in Tyler. It seemed that our installer was installing the cable from the exterior of the home at the nine foot, eight foot level or something, into a living room or a family room and I don't know what he did, but he drilled right through the wall, the lady of the home was there, she had this painting of her grandfather, who was a Civil War general and the drill bit went through his eye. Well, that went to Mr. Schneider on that one, it cost us $5,000, we had to send the painting to an art restorer in New York, the lady fainted, we had to get an ambulance.

YUTKIN: It wasn't funny then?

LIPTAK: It wasn't funny then, but in retrospect... So, installation issues, big issues.

YUTKIN: That's a great story. I hadn't heard that. What about the office issues and billing? What we call backroom now.

LIPTAK: Oh, yeah. Often very primitive...

YUTKIN: Coupon books?

LIPTAK: Oh, yeah, coupon books! They were great, weren't they? Coupon books you'd send out to people, right. And then we got into computer billing and had a lot of missteps in computer billings. In fact, today I'm told same problems but the problems today are very sophisticated, integrating high speed internet and telephone billing and so forth into cable billing. So that's been a very big challenge for the industry. So I guess you ask what are the issues? It's all of those and then some and then let alone programming. Do we have good quality programming to offer? What are they? Is some stuff wrong for a market and so forth.

YUTKIN: Let me ask you about that. Do you think that the vast wasteland speech that was given by the FCC chairman, Newton Minow, in 1960, do you think that cable has fulfilled the promise to resolve that?

LIPTAK: Yes, I think in large measure it has. Newt, he's one of my heroes too, I would have put him on the list. He was one of the great visionaries and got a lot of criticism for the speech from broadcasters, but...

YUTKIN: He said it to the broadcasters.

LIPTAK: To the broadcasters, I think that we in cable look back with great respect for his observation at that time and use that quote a lot in cable development. But yes, I think so. I mean, there was a period of time in cable's programming development when everybody said all cable is is reruns, but today, there is a great deal of terrific, original material being created and if you look at the viewing statistics of ABC, CBS, NBC and Fox over a fifteen year period, you see that viewership decline and you see cable going like that. Cable, last fall, cable basic services for the first time in the aggregate passed the viewership of those networks. So that was a watershed event for cable.

YUTKIN: Let me ask you about something that I know is near and dear to your heart and that is the formation of CTAM, and you're the daddy of CTAM, or one of the prime motivating forces of the creation of that entity, which has been very successful in really leading the industry. Did you just wake up one day and say, I think we need a CTAM?

LIPTAK: Here's what happened. We were starting to launch pay television services by satellite. September 30, 1975 was the launch of HBO on the satellite. Up until that time we had some pay cable on cable systems by videotape, tape playback and in some parts of the country by microwave delivery, particularly in the Northeast. But suddenly, we were faced with the opportunity of this new product line that we were so very excited about. So I was down in the New Orleans cable show in, I think it was April of that year and ran across a couple of cable colleagues. Tom Willett from Continental, David Lewine from the Times Mirror Company and George Sisson from Colony Communications and I said to them, "We really need a forum to discuss how to do this. How do we launch this new animal, pay TV? And maybe more importantly, how do we figure out what not to do," because what was going on in a couple of these launches was what was called the negative option. Cable operators would put the service on a cable system and then start charging people and then would only take it off their cable if the people said they didn't want it. Well, several attorneys general in the U.S. came down on those cable operators and said, you can't do that. So we had to figure out a way of how to properly market cable. So, George Sisson, at that point head of Colony, was a member of the NCTA board of directors, very influential people in the industry, and he said, "This is a great idea. If you'll organize it, I will help you, I'll serve as your first secretary or treasurer, one of the two, and I will take it upon myself to keep the NCTA board informed," because they were very sensitive about any other groups starting in cable. They didn't like that. And I said, "Terrific, George." So I came back and then talked to Gail Sermersheim who was a cable marketer with a small company called Telesis Corporation in Indiana. She, too, felt the same way. She agreed to head a steering committee for the formation of CTAM if I would serve as the first president. We called a meeting of CTAM and that meeting was held at the O'Hare Hilton in Chicago and we had about 50 or 60 people, a lot of the leaders that we could identify in this realm.

YUTKIN: Marketing, primarily marketing people?

LIPTAK: Primarily marketing, but a lot of operations people. Chuck Dolan was there, Bill Bresnan, people like that. So we then, from the meeting, all agreed that there should be a more formal organization. And so, my wife helped, we did the mailing for that initial meeting and it was going to cost about $3,000 and I credit my wife, Stevie, for being really the founder of CTAM because I said to her, "You know, hon, this could all be for naught," we didn't have a lot of money at that time, money we didn't have would all go down the drain, we may not get reimbursed a penny, do you think we ought to continue to do this? She said, "Let's go ahead." So we did and it turned out that we broke even. I think we made $30, opened up a bank account, put the $30 in it, Gail started the steering committee, I got our lawyer at Communications Properties in Austin to agree to develop the first set of bylaws and handle the filing with the Internal Revenue Service. We had to get declared a not for profit corporation and so we did all that and kicked it off. So that's how it started.

YUTKIN: And how did NCTA feel about it? You're not affiliated?

LIPTAK: Not affiliated at all with the NCTA.

YUTKIN: But it's not competitive.

LIPTAK: It's not competitive. There were two efforts by the NCTA before the foundation of CTAM to develop marketing groups. There was something called the Young Communicators Society that was started by Marc Nathanson and they held a cocktail party at one of the NCTA's and then there was actually and NCTA marketing meeting that was held, but somehow we handled that and didn't have a problem. I was going to call the group CTM, the Cable Television Marketing Society. It was Marc Nathanson who said, "No, no. To get a buy-in in the industry, you have to involve the operations people, so you should call it the Cable Television Administration and Marketing Society." So that's how CTAM came about.

YUTKIN: Okay. And then tell us about the Cable TV Ad Bureau.

LIPTAK: Well, a few years later, one of the board members of CTAM was a fellow by the name of Bill Ryan from Florida. Bill had a radio broadcasting background before getting into cable.

YUTKIN: That was about the late '80's or early '80's?

LIPTAK: Early '80's, actually probably late '70's, Gerry, or early '80's. Bill started selling advertising on his local cable system down in Florida, Naples I think. He then came to CTAM and said, "We really need an organization in the advertising arena just like CTAM is in the marketing arena in order to really develop the advertising revenue stream. We've got to have the professionals in that field willing to work together and exchange ideas." So CTAM funded the start of the CAB and I think it was in 1979 or 1980 where a grant of $300,000-$400,000 to get CAB going. And we then went out under Bill's leadership and search for and found Bob Alter, a veteran of the radio advertising bureau, as the first head of CAB. And so Bob came aboard and then CAB immediately then became its own not for profit organization and set up its own structure and went from there.

YUTKIN: And you brought a little souvenir along with you.

LIPTAK: Yes, I did. The development of local advertising on cable always held great promise. I can remember a time when it was 0% of a cable operator's revenues. Today, in 1999, it's somewhere around 9% of a cable operator's revenues and at the local level that's 2 ½ billion dollars and then at the local and national levels, it's over 10 billion.

YUTKIN: Is that a telescope?

LIPTAK: This is a telescope from the CAB board in 1989 and it says "On the horizon, 4 million dollars, CAB board of directors 1989." We thought, oh my gosh, if we could get to 4 million dollars, we will really have created a terrific business and so on.

YUTKIN: And now?

LIPTAK: And now it's over ten! Over ten at the network level and a couple of billion at the local level and continues to grow and become very, very important.

YUTKIN: That's terrific!

LIPTAK: A lot of things spurred it. I have a whole bookcase in my house that has all of these cable memorabilia. Floor to ceiling, six to eight feet, I hate to tell you my wife calls it my cable crap. She'd like to get rid of it, it gets very dusty but I'm going to give some of it to the Museum. This is a ring, look at this thing!

YUTKIN: That's a big ring!

LIPTAK: This is a big ring. It's from ESPN in 1987 when they first launched the NFL carriage and that was a big important event for cable, too, the first NFL carriage on cable. So that's a little memento from our friends at ESPN, which I think is now one of the most profitable communications enterprises in the world. I know it's more profitable than its parent ABC television network.

YUTKIN: Well, they have a good product.

LIPTAK: They have a great product!

YUTKIN: It's been a long time and we've come a long way from radio for you to television news, production, sweeping floors, to getting into cable as kind of an afterthought, not an afterthought, but because you heard of something. You've known a lot of people, marketing, operations, now you're into the future with your new company that we hope will be successful in the new decade that's starting. Where do you see the industry maybe ten or twenty years from now? I didn't tell you about that before because maybe it's unfair but I just wanted to get your off the cuff remarks.

LIPTAK: Oh boy. I see a single communications pipeline into the home and perhaps delivered by several companies, but a single pipe that's going to deliver television, high speed internet, all the internet connectivity.

YUTKIN: Telephony?

LIPTAK: Oh, no question about telephony and I don't know what other services it will provide but it's going to be a package product in my opinion. The company that wins, and I think AT&T is on the right track here, the company that puts it all together in the Dolan idea, the packaged idea, delivering a value of products, terrific value, all together in one package, a simple installation, a single billing, a single customer service, is going to be the winner.

YUTKIN: How long do you think that's going to take?

LIPTAK: Oh, it's going to take ten years, or more. It always seems like it takes an excruciatingly long time to do this. AT&T announced just a few days ago they now have eight markets where they've got telephony going. Well, how long is it going to take just to do that in the AT&T Company, let alone the rest of the cable industry. It's going to take a long time. A long, long time.

YUTKIN: Thank you very much. It's been a pleasure talking with you. I've enjoyed it. I think the flavor of the industry has come through in this meeting. I appreciate it.

LIPTAK: Thank you.

YUTKIN: I would like to thank again the Hauser Foundation for funding the oral video history project of The Cable Center and Museum and we thank you for watching and Greg, thank you very much. It's been really very wonderful.

LIPTAK: Thank you, Gerry.

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  BACK TO ORAL HISTORIES

Jerry Lindauer

lindauerJerry5

Interview Date: Friday January 21, 2000
Interview Location: Austin, TX
Interviewer: Jim Keller
Collection: Hauser Collection

KELLER: This is the audio and video history of Jerry D. Lindauer. This video history is brought to you by a grant from the Gustave Hauser Foundation in conjunction with the video history program of The Cable Television Center and Museum. We are meeting in the offices of Prime Cable in Austin, Texas. The date is 21, January, 2000. Good morning Jerry.

LINDAUER: Good morning, Jim.

KELLER: Jerry, tell us a little bit about your background prior to getting into cable.

LINDAUER: Well, basically, I grew up in Louisville, and that's another story which we won't go into, but I was an orphan and a lot of other things, but worked my way through college and eventually graduated from a local college here called Bellarmine College, which I'm now on the board of trustees of.

KELLER: It's a Jesuit school, isn't it?

LINDAUER: It's named after a Jesuit, you're quite correct, Robert Bellarmine, but it was a black Franciscan school. And so the arch diocese named it after Robert Bellarmine, but the Jesuits weren't there. So, I graduated from there in '57 and in '57 I went into the Marine Corps and became an officer, a 2nd lieutenant, in the Marine Corps, and basically had a very interesting career for twenty years. I was a company commander in Vietnam. I was wounded in Vietnam and have a lot of history of Vietnam in my head up here, which I could do an oral history on also, and then I became a lawyer in 1973 I moved to Austin in '68 after Vietnam. They had me teach at the University of Texas with the NROTC unit, and '68 is when I met Bob Hughes and Jack Crosby. But I got a law degree from the University of Texas, and then went back to the Marine Corps from the University of Texas while I did both, while teaching and getting a law degree, and when I went back to the Marine Corps, I practiced law, criminal law, for a couple of years, and then I was pulled in to be a military assistant in the office of the Secretary of Defense, and I worked for Jim Schlesinger, Don Rumsfeld, and Harold Brown. I traveled all over the world with them and that was a very, very interesting career, but I decided to retire the minute I had 20 years in, because I'd gotten a law degree and I decided I wanted to go practice law and try the civilian world, although I think I had a very good career in the Marine Corps and could have stayed for thirty five years, I guess. So I interviewed with several law firms in Texas upon my retirement and two of them, the two leading firms here in Austin, wanted to hire me, but Bob Hughes, who I'd been friends with now for almost ten years – social friends, we golfed together, we played tennis together, we did a lot of things with our wives, and basically became a good friend, and we stayed friends in the four years – from '73 to '77 – while I was still in the Marine Corps. And so he was coming to town, to Washington, and he would stop by the Pentagon and see me, and we'd also go to dinner, and he wanted to know what I was going to do and I told him and he said, "Well, I think you ought to think about the cable industry and come with our company." I said, basically, "Why?" So that went over a period of several months, and basically I had the law offers, I had another offer from a manufacturing firm in Houston, all of whom offered me a lot more money than Bob Hughes was willing to part with, but for some reason I just liked the story about what he thought cable was going to be, and of course none of us knew what it's turned out to be, as this was in 1977 and the satellite had just gone up, or was getting ready to go, with HBO and he said, "I don't know what you can do, but we'll figure out something. I just think you ought to come." Jack Crosby, of course, was involved in that also. Jack and Bob were partners at Communication Properties, Inc. and Jack, ironically, was on the board of directors at the company in Houston that also wanted to hire me.

KELLER: Was it Prime or Community Properties, Inc.?

LINDAUER: It was CPI, Communications Properties, Inc. So I went with CPI because of Bob and also because of Jack. They initially made me, I think my title was Director of Labor Relations and Personnel.

KELLER: Interesting title.

LINDAUER: That was my first title. I think that title lasted about six months or so.

KELLER: You went on the franchise trail, didn't you?

LINDAUER: Yes, almost from the beginning I was on the franchise trail, basically, but then they changed my title to Assistant to the President and we decided to go after franchises in the '78 timeframe, and the main franchise we had, one of the most important ones we had that we'd never built was Louisville, Kentucky. You may have been involved in Louisville.

KELLER: Yes, I was a referee on that one. We never got anything in Louisville.

LINDAUER: Right, with Monty...

KELLER: In fact, I didn't do anything in Kentucky. I struck out in Kentucky.

LINDAUER: Nothing – you struck out! Well, Monty had a lot to do in Kentucky, ATC, and so many other companies, and what the problem was, as you may recall, and I'm sure anybody who knows the industry, is that we hadn't built those cities because we had no product to bring to those cities. So, when the satellite went up and we thought we could microwave different things and maybe would have more programming, we decided that we would build Louisville, Kentucky, but as it turned out we had other cable operators who also... so they tried to get the franchise revoked because we were non-performers, even though they were non-performers in other places, and my first job, basically, was to save that franchise. And ironically it was my hometown, although I had no political sway, I grew up sort of on the wrong side of the tracks and I wasn't a big political operative, but I knew the town and it gave me a lot of credibility as time went on. Simultaneously with the decision to rebuild in '78 Jack, Bob and Fred Leiberman, who was the primary shareholder in CPI, made a deal with Times Mirror to sell the cable company, and so at that time it was the largest cable sale ever. The sale was about 134 million dollars, which was a lot of money and it was the largest cable sale that had ever taken place. I think we were the 8th largest cable operator then.

KELLER: This was in '78-'79?

LINDAUER: "78-'79. So Times Mirror came aboard and we started going through the transition and I met Ralph Swett and Dow Carpenter, who was his boss at the parent level, at the Times Mirror company, and they said in one of the deals that they had made within CPI, in the negotiations, that they wanted the Louisville franchise, the unbuilt franchise. It was very key. They didn't really share that with me, but they said, "You've got to get that franchise." And so I went to work and I spent a lot of time in Louisville working with politicians, as you do, that's what your experience is, and convinced them that we were the best company and to leave us in place as we didn't do anything wrong, and we were going to build it and live up to our promises, and tried to explain...

KELLER: Were you doing this as CPI or doing this as Times Mirror, at this point?

LINDAUER: CPI, but the acquisition didn't take place until '79, but it had already been announced and we were going through the regulatory hoops. We had already been trying to save the franchise and then I went back in and was explaining to the politicians in Louisville that this was going to be great! Not only were we going to build it, but now this big company from California with all of substantial wherewithal was going to build it, so it made my job a little bit easier. So, we saved that franchise, and that basically, I think, in a way, made my career when I was first starting. That all happened in the first 12 to 18 months.

KELLER: You got your feet wet in a hurry!

LINDAUER: Got my feet wet! So, Times Mirror, who would come and watch me perform in Louisville, they'd come to the hearings and all these various things – it was very contentious – so after all that then when the acquisition took place, Bob was going to form another company, but he didn't have any place for me in it. I decided that I'd go to one of these law firms. I'd only been there a year and a half, because no way did I want to move to Los Angeles, but Times Mirror approached me and said, "We want you to come with the acquisition," and made me a very nice offer. In fact, the offer was probably five times what I was making with CPI at the time. So it was very lucrative, but I said, "I've been in the biggest bureaucracy in the world, which is the Marine Corps, for twenty years, and I really don't want to move to LA and be part of a big company." So then they came back to me and said, "Okay, here's the deal. Will you consider this? You can stay in Austin and you can keep your office here. You'll have to come out to LA some." They sweetened the offer some more, and so I said, "Okay, I'll do that." That was in '79, and so I stayed with Times Mirror from '79 until '83, and of course that was a very unique experience and I was always glad that I did it in retrospect because I really learned what big companies were all about. At least that big company, and a lot of them mirror each other with the way they think and do things. They all have their own unique personality, but they're not entrepreneurs.

KELLER: That's for sure.

LINDAUER: They don't have the same... they're different in negotiations, they, I think in many cases, against an entrepreneur, since you're dealing with someone that only usually has stock in the company or something, they don't look at it as... whatever they're giving away or surrendering or doing, they don't look at it as coming out of their pockets, per se. So they have a tendency, I find them easier. I found the same thing with the RBOCs through the years that we did, deals we did with them. I liked dealing with them. Not that they were not tough.

KELLER: RBOCs – Regional Bell Operating Companies.

LINDAUER: Regional Bell Operating Companies. Not that those big corporations aren't extraordinarily good, it's just from an entrepreneur's sense, I just always thought that we were better at the negotiating table. I hope this doesn't go to my friends in the RBOCs.

KELLER: It's all right. We're all coming together anyhow, so it doesn't make a whole lot of difference.

LINDAUER: So I learned a lot. In my job, when I went with them, was to win franchises for the new company, Times Mirror Cable. Also at that time, Ralph Swett... Well, let me go back a little bit, let me go back to CPI. When Bob was president of CPI in '78...

KELLER: Bob Hughes?

LINDAUER: Bob Hughes. ...he was also chairman of NCTA.

KELLER: That's the National Cable Television Association.

LINDAUER: Bob told me he wanted me to start going to board meetings with him. He was vice chairman of NCTA at the time.

KELLER: He was chairman from '78-'79.

LINDAUER: '78-'79. Either '77-'78, I can't remember. But anyway, when he was vice-chairman I went to board meetings, so then when he became chairman, he says to me, "I want you to be chairman of the EEO Committee," which was a very high profile issue. And the gentleman who had been the EEO Committee chairman for the last couple years was Dick Munro, who was the heir apparent to Time, Inc. at that time.

KELLER: Chairman of Time, Inc.

LINDAUER: Right. So, I said to Bob, I said, "Bob, you've got to be kidding me. This is a very touchy issue within this industry, and you've got a real high profile guy here in Dick Munro, and you're putting me in, assistant to the president of CPI, with no profile. I think you ought to get somebody that has stature." He said, "Nope, you're going to be it." So I did that and that's how I made my entrance, basically, into the politics of NCTA.

KELLER: Now, you went with Bob when he was president of CPI. When you went on the board, then, you went on the board representing Times Mirror?

LINDAUER: Times Mirror, right. One board meeting I wanted to mention to you that I always think, and maybe other people on the board at the time remember it, but I remember the board meeting at the Western Show, it was probably '78, late '78, in December, I would guess, and Ted Turner came to the board meeting to make a presentation on CNN. I wasn't on the board, but I was in the room, and they weren't interested in Ted's presentation, but Tom Wheeler and the board gave him 15 minutes to make his pitch.

KELLER: What was the purpose of his pitch to the NCTA?

LINDAUER: CNN – he wanted to have an all news channel. He was going to launch this all news channel, and he wanted the industry's support.

KELLER: Okay, so he was asking the NCTA board to speak for the industry in giving him support, was that it?

LINDAUER: Right. He wanted support, he wanted to brief them all, tell them he was going to come see them, this was his vision, and this is what he was going to do. He made, in typical Ted fashion, a great presentation to a rather stone faced board, and when he got through...

KELLER: He was an unknown at that time.

LINDAUER: Yeah, he was basically unknown. He was Captain Courageous from the America's Cup, so the board listened to him and he asked for questions, there weren't any questions. He left and basically everybody thought it was not a good idea, it would never work, never do anything. But I'll never forget, Ted, of course, being tenacious as he was, we did end up supporting him and it was one of the best moves the cable industry ever did in the long run, but it was interesting that there was really no interest as he made his presentation.

KELLER: This was before you were on the board?

LINDAUER: This was before I was on the board. I was an observer.

KELLER: And you went on the board, then, in what? '79?

LINDAUER: In '79, and usually on the NCTA board...

KELLER: And you're still on the board, is that correct?

LINDAUER: I'm still on the board today. Ironically, as we sit here, I'm going to my last board meeting in Washington next month, because the company I'm with now, Prime Cable, has sold all of its assets to Cox and Comcast and various other larger MSOs.

KELLER: So, all you'll have is money.

LINDAUER: Well, I'll have some. The industry's been very, very good to all of us.

KELLER: To all of us, you're absolutely right.

LINDAUER: I never dreamed I was going to be a Marine for 20 years. But in 1977 I decided to try the civilian world, the reason being is that the Corps sent me to Austin and I got to like it so much while teaching at the University of Texas. When I retired, all I thought I'd do is just augment my 20 year retirement and eventually make a nice living as a lawyer and everything, and I got in this industry and it turned into a big homerun for everybody that stuck with it. There were some painful times, but it proved more than I ever dreamed of, so I'm very lucky. I love this industry. I don't love it that I made money in it so much, I love it because of the people I knew for 20 years, 22 years now. And they are great friends. It was a collegial industry to the degree that, as you know, we never competed directly with each other in the '80s and '90s.

KELLER: Not in the operations.

LINDAUER: Just on franchising. Franchising was a bitter, bitter contest, there's no doubt about it, but after those days were over in the mid-80s really, so to speak, there was nothing to fight about except to align... on public policy we were always together, and so it was a collegial industry and I've made lifelong friends who will be my friends forever, in this industry, and watched it grow and watched it turn into what it is today, which we never dreamed it would do.

KELLER: Whatever that is. I can't define it today.

LINDAUER: Yeah, I can't either. It's another world. I really don't think there's going to be a cable industry per se by the year 2010 at the latest. It might be sooner.

KELLER: Especially after the Time Warner AOL merger. It's going to be very difficult to see where that's going to go.

LINDAUER: Right.

KELLER: But you're back, you're on the board in 1979. That was the beginning of some of the changes in the industry leading up to the '82 Cable Act. Can you give us a little bit of insight as to how the board was functioning and looking at that potential Cable Act in '82?

LINDAUER: Well, the Cable Act of 1982, let's see... We got de-reg in '86, right?

KELLER: Well, I'm sorry. '82 would have been the telephone company act, the phone company act.

LINDAUER: Pole attachment.

KELLER: Pole attachment, right.

LINDAUER: Before I got on the board, John Saeman pulled me into his team on pole attachments and I lobbied a young administrative assistant to Tim Wirth named Tom Rodgers - who as we know, went on to be very successful with NBC and has now moved on to be CEO of a large media company and Senator Tim Wirth, who I became good friends with. Tim was our mentor, although he was very, very tough. Timmy was a very, even though he's from your state of Colorado, was a very liberal guy and very regulatory oriented, but we were able to convince him – by "we" not just a few of us, but the industry working together.

KELLER: Who were the other people involved in that?

LINDAUER: Well, it was Tom Wheeler, John Saeman, myself, and then there were other people... we lobbied him a lot, though, just met with him a lot and talked to him. I think John did a tremendous job in getting the pole attachment act.

KELLER: This was late, because the Hanover case, that was back in the mid-60s with United Telephone Company and the city of Hanover, where I thought was the beginning of what looked to be like a telephone company control of the industry within their own franchises, within their own exchanges. FCC overturned that, I think the courts overturned the Hanover case eventually

LINDAUER: Well, you know, the pole attachment, I had just gotten in the industry, but it was obvious that there were some usurious charges being made to get on their poles.

KELLER: No question.

LINDAUER: This industry, the history of it, basically, through the '60s and on up to the late '70s, we had to pay pole attachment fees, and then in addition to that we had the broadcasting industry – we had nothing but enemies and not much help. Certainly no help from the financial community – they didn't believe cable was ever going to go anywhere, so we had a lot of hills to climb. But in answer to your question about how the board operated then, the board operated very collegially. There wasn't a lot of disagreement on that particular issue. We wanted pole attachment relief and we wanted to be treated fairly. And so, because, as you know, the phone companies had the right of way, they'd hang the poles and they would make charges for make ready and they were outlandish. So when they got this through it was a very euphoric thing.

KELLER: They were trying to force us into leasing back the facilities from them, at that time, and at one time they wouldn't even permit pole attachments.

LINDAUER: Right, they could arbitrarily tell you that you couldn't get on. So the industry struggled, and that particular act was a victory for us. It was our first legislative victory that we'd ever really had, and the first time, I think, that NCTA had ever really done anything. They'd been a lobbying force. Bob Schmidt had done a good job and laid a lot of groundwork.

KELLER: Sometimes negatively, but...

LINDAUER: Yes, and then Tom Wheeler came onboard and we became a lobbying force, that was the beginning of it as that act gave NCTA a lot of credibility.

KELLER: Tom Wheeler was the president of the association.

LINDAUER: President of NCTA. He was the successor to Bob Schmidt. The reason I was on the board and represented Times Mirror, and I know you'll interview Ralph Swett, who is a fine gentleman and a good friend, Ralph did not want to be Mr. Outside. He wanted to be Mr. Inside. And so, when I came on board, the first thing they told me is they wanted me to get elected to the board, did I think I could get elected? I said, "Well, I've been in this industry two years. I've been chairman of EEO, but you know, we'll see." But anyway, I did get elected to the board in '79, and that's how I got on the board. Then after... somewhere in '82, Tom Wheeler, which I don't think the presidents today would do, but he pulled me aside and said, "Would you like to be on the executive committee?" I'd been on the board three years, and I said, "Yeah, sure." And so Doug Dittrick put me on the executive committee. At that time, the executive committee did most of the yeoman effort, although the board was effective too, but a lot of the work was carved up in the executive committee.

KELLER: So, then, after the '82 Act, then there was a concerted effort to relieve the industry if some of the onerous restrictions put on it – the non-duplication requirement and so on. How did that play out at the board level, do you remember?

LINDAUER: Well, I don't remember... I don't recall... I know that issue, but I mean, those are issues that we were always united in, so it didn't play in... When we got into the '84 Act, or the...

KELLER: '86 Act.

LINDAUER: '86 Act, when we got de-regulated on rates and things of that nature, there was a lot of fraction from some players in our industry, and the board... In fact, we were sued by Leonard Tow, who was not on the board, and Leonard was never on the board. He's obviously very successful and I like him and his wife, Claire, very much. He had no use for the NCTA board, thought we were making a bad deal. He's never liked any deal the NCTA's ever done.

KELLER: Well, he didn't want any regulation at all.

LINDAUER: Yeah, he just thought we shouldn't compromise, we shouldn't do anything, this is a bad deal... so he sued us. It was an ironical suit, it obviously didn't go anywhere, but he did make the lawsuit – not only the association, but each of us individually. (Laugher) But that issue, there was a lot of debate on what each MSOs wanted in that particular area.

KELLER: We were starting into the National Cable Television Association's board, deliberations prior to the 1986 Cable Act.

LINDAUER: Right, and one of the things in my career on the NCTA board that happened in that interim period, right around '82, yeah, in '82 – we had board elections, and I was on the executive committee at that time along with Gus Hauser, and let's see, John Saeman, I guess, was chairman. He had it for two years.

Usually NCTA elections are automatic, the executive committee decides who's going to do this, so Gus had made it known that he wanted to be vice-chairman of the association at that time. Gus had been president of Warner, had promised the Qube, which was a revolutionary system that Warner Brothers had, but unfortunately he had been removed from the company and they brought in Drew Lewis in '82, I guess.

KELLER: Because it was bleeding money.

LINDAUER: Yeah, so Gus and Steve Ross went their separate ways, and Gus founded his own company, Hauser Communications, but he wanted to be vice-chairman, and there was a group in the industry who were divided on whether Gus should be vice-chairman and then chairman.

KELLER: For what reasons were they divided?

LINDAUER: The ostensible reason was that Drew Lewis and Warner were reneging and getting a lot of publicity on not delivering on Qube and was cutting and slashing – Drew Lewis... that's what he was brought in for, and Warner was getting a lot of bad publicity and Gus was the father of the Qube.

KELLER: The Qube was the two-way system, on-demand system, in Columbus, Ohio, right?

LINDAUER: On-demand... it was going to do all the things that the Internet now does today, but it was 15, 17 years ahead of its time. Or maybe... yeah, that's right, 15, 17 years ahead of... if it had made all those promises it was going to do everything, and obviously it couldn't do all that. They tried hard and lost millions of dollars on it, but people just... there was a contingency, a certain segment of our industry did not want Gus to be president, and also there was bitterness...

KELLER: Even though he had, by this time, left Warner.

LINDAUER: He had left them, but it was very recently, and of course, he had... I don't know – he owned a few subscribers someplace but he hadn't really made his big acquisition, I don't think, at that time – Montgomery County, and so on. So he had some subscribers, had some systems, so he was eligible. But they just didn't feel that he should... I think there was also – we went through some bitter franchising; as I said earlier, it was a collegial industry, but during the franchising days you could bruise each other up pretty badly, and I think there was a lot of resentment of some of Gus's successes with this technology that was bogus to begin with, and he had won some franchises against some other people.

KELLER: I don't think it was bogus in Gus's mind, nor do I think it was bogus in the minds' of the Warner engineers.

LINDAUER: No, they thought they could pull it off. I totally agree.

KELLER: There was nothing to program.

LINDAUER: And that's pure conjecture on my part. So a group of people approached me and said, "We want you to run against him."

KELLER: Here you're in the industry five years or so?

LINDAUER: I'd been in the industry about five years. I said okay, so my constituency was basically Bud Hostetter and my backers, Doug Dittrick – who was no longer chairman at the time, I think John Saeman was chairman – Bill Strange, and a host of other people, and so it got to be... there were some contested elections, but very, very rarely. There were for board seats, but not for the officers too much. And so, I can remember going to the board meeting, I think it was down in Sarasota, Florida, and one of my votes did not show up.

KELLER: One of the people backing you?

LINDAUER: One of the people backing me did not show up, which was crucial because I ended up losing by one vote and it would have swung the whole thing around, and I would have probably won by one vote the way this worked out, but as it turned out, I did lose. But I remember – it was the only election I ever remember in my twenty years on the board – where we were questioned, Gus and I, on our positions on various issues.

KELLER: Like what?

LINDAUER: Oh, well, I can still remember my good friend, Bob Johnson, who was then on the board as a programmer...

KELLER: The Black Entertainment...

LINDAUER: Network. And Bob says, "What do you feel about EEO?", and these questions, and so I'd give my answers trying to be very diplomatic and what I thought were the concerns, and they'd ask some other questions, "Where do you stand on...", but we had to answer questions from the board on what our positions were on all this stuff.

KELLER: You can't remember what any of the other questions were?

LINDAUER: No, not really. They were pretty mundane. I just remember Bobby, because Bobby was a friend but he voted against me because he had a deal with Gus, and I've never let him forget it. It was the only time we ever had a contested election – it may have happened back in the old days but not since.

KELLER: I don't believe so.

LINDAUER: I don't think it ever occurred again. But we had to state... which we didn't know when we walked in there. It had never happened and they started asking us questions. I can't remember – I just remember Bob because he was trying to pin me down on something I was saying wrong about EEO, or something.

KELLER: This was what? In '81?

LINDAUER: No, this was '82. It had to be '82, because I left Times Mirror the following year.

KELLER: So, by this time though, the satellite programming, HBO, was going very well, and I think by this time Ted had brought his...

LINDAUER: CNN had launched and things were...

KELLER: And also WTBS was up on the satellite too, wasn't it? So the industry was starting to pick up and roll very quickly at this point. But you don't remember anything else about the discussion of which way the legislation was going to go leading up to the '86 Act?

LINDAUER: Well, you're talking about de-reg.

KELLER: Yeah, the de-reg of '86, yes.

LINDAUER: That's a little bit away. Several things happened in my career. The first thing that happened was that I left Times Mirror; Bob Hughes had formed Prime Cable. He had a few, I don't know, maybe 50-60,000 subs, and he wanted me to come back. And once again, he made me an offer I couldn't refuse. I was making a big salary with Times Mirror, more than I'd ever dreamed I'd ever make in my life – stock options, all the perks, and Bob cut all that by at least a third and said, "But I want you to come back." And so, once again, I put my faith in Bob and came back to Austin. In the interim, one thing I did – as far as Times Mirror, the Times Mirror treated me extraordinarily well, and they finally came back to me and gave me a beautiful subsidized condo on Balboa Island in Newport Beach so that I could commute. They wanted me to start being out there more, so I commuted back and forth. I still had an office here, I had an office out there, and I spent a lot of time on the road in the franchising days, but they were a great company. Bob Eburu was the CEO, he was very nice to me. But one thing that hindered them in the franchising wars as we went forward, I should indicate, is that I had to meet – I met with Bob Eburu, who was CEO of the corporate Times Mirror company that owns the LA Times and the cable and everything – I also met Otis Chandler, I met Franklin Murray, who is a legend in the Times Mirror Company. He's a doctor, I don't know if he's still alive. But they set me down and explained to me the rules they wanted to play by in the franchising, because they were very proud of their heritage and their integrity in the LA Times, and I could do nothing that could ever embarrass them, and the one thing I could NOT do was give political contributions.

KELLER: Well, we all were under that – most of us were.

LINDAUER: Well, no, not everybody.

KELLER: Except for a couple, and I won't go into that.

LINDAUER: And I always felt – and there wasn't anything wrong with political contributions. It was a legal thing you could do, just like you could give to CablePac. It was a little shaky, different rules, but you could...

KELLER: Yeah, but not when the deliberations were going in city council for a franchise.

LINDAUER: No, but I mean you could give money for re-election, whatever. I'm not saying... but that was just the way the system operated, and a lot of guys did.

KELLER: I was always told just walk away. Anytime that happened, just walk away.

LINDAUER: So we never, ever played politics at all, other than by force of personality and meeting people. So it was interesting how the game was played, and who your rent-a-citizens were, and how you went about it, and who you got as partners, and everything had to be just up and up at Times Mirror.

KELLER: They, as I recall, they had connections and influence with various newspapers around the country, which in some cases help you, didn't it?

LINDAUER: Well, no, not really, because we weren't successful in winning many franchises. I won Brookline, Massachusetts for them, ironically, and came close in Montgomery County, Maryland, but by that time, the Times Mirror Company had decided they weren't too enamored with cable even at that early stage. They didn't understand it and I don't think the corporate gurus liked it. So it became sort of a stepchild and they eventually got out of the industry not too many years later, eventually sold it.

KELLER: Well, we met in Lexington, where we both lost.

LINDAUER: Right. We both lost. I gave a stunning presentation. I can remember the headlines. And Joe Collins, and Monty were there.

KELLER: Joe Collins – it was the only time Joe ever came in.

LINDAUER: Yeah, Joe came in, and ATC... you guys, I think it was you guys, brought in the former president of the board of Aldermen of Louisville and you hired him as your lawyer.

KELLER: Um hmm.

LINDAUER: He was a real good guy, and I knew him because I came from that town and we were friends, or we used to be friends. So he came... they brought him to Lexington and then he started asking me hostile questions from the audience about our Louisville situation and how screwed up, how can you... .Creighton Marshon was his name. But the presentations, as you recall, cost thousands of dollars. We had Ed McMahon as our video voiceover and on-camera presence to talk about all Times Mirror was going to do for Lexington with horses, and all these things, and I got up and got beat up by some planted questions and things.

KELLER: That's happened to all of us over that time.

LINDAUER: There was a headline in the Lexington Herald that basically said, the next day, it said "If the vote was taken on presentations, Times Mirror Company won." But it wasn't. As we know, Telecable from the Norfolk area came up with it.

KELLER: I've got some stories to tell about that someday. But, then what? You say the only one you did win then was Brookline...

LINDAUER: Brookline.

KELLER: ...Massachusetts. Any reason why Times Mirror...? They just didn't feel they were competitive?

LINDUAER: We did great jobs, we made great presentations, we just never really had the politics in a lot of cases, even though we had some very good prominent local people. One great example, which was the acquisition – I also started getting involved in acquisitions at that time – is that we became partners with Bruce Merrill in Arizona, and Bruce is an old pioneer, in those days he was already an old pioneer, and we became his partner and so we got the city of Phoenix to approve the transfer to our new partnership, which was a battle in and of itself because Bruce had bruised a lot of people. You either love him or you don't love him, and he bruised a lot of people in Phoenix and then we went after Tucson and thought we could win that because we had just gotten the Phoenix franchise and were going to build out the city and all that, and we had a very good group of local partners, but the Tucson people really didn't like Bruce's role at that time. He had bruised them somewhere back in the '60s or whatever had happened, so that was sort of an albatross around our neck and we came close, but Cox, I think, ended up winning Tucson.

KELLER: Cox did win Tucson.

LINDAUER: So, you know, as far as... Times Mirror wasn't willing to do anything... There were a lot of things, if you want to say we always took the highroad, there were some players who played a different game then we did, and we were sort of ones to play white knights and did not want to get in the trenches to do anything – I'm not talking about illegal – but just even anything that could even look like it cast any kind of aspersion on Times Mirror. Anyway, that brings us up... I left Times Mirror, joined Bob again, and we at that time were on... my first job with Bob was to really divest of everything they owned, to sell everything, and we wanted to start a new company, which is what we did, and I was off the board for one year and then I went back on the next year.

KELLER: This is the NCTA board?

LINDAUER: The NCTA board. So it was a one year period, or a few months period, that I was off the board, and Bob didn't want to be on the board. He'd done it all, he preferred to be Mr. Inside, so to speak, so once again I was the person out in front for Prime Cable in the national scene.

KELLER: Were you also involved in the Texas Association?

LINDAUER: No. Bill Arnold, who didn't work for Prime, but he worked for CPI, he's not the executive director, and I'm sure you know Bill. He's a colorful guy.

KELLER: He's on the board of the Cable Center also.

LINDAUER: We had a few properties here and there, but nothing of consequence. So we kept our corporate headquarters here in Austin because we like to live here, it's a great place. As you can tell now, if you ever pick up Fortune or Business Week, it's either number one or number two as the best place to live in America for lots of reasons, so it's a wonderful town. We wanted to live here. So we didn't have many Texas properties. Old CPI did, but then we didn't at Prime.

KELLER: What properties did Prime start with?

LINDAUER: Prime – when I arrived, Prime started with, the biggest acquisition they made was Buffalo, and they owned Buffalo, Hoboken, New Jersey, we had a little town outside of Corpus Christi, we had Springfield, Illinois.

KELLER: Was it the city of Buffalo?

LINDAUER: Yes – no, no! The county. We owned the county.

KELLER: Yeah, I was going to say I thought TCI had it.

LINDAUER: Yes, we had outside the golden ring, and so we had a partner who was very colorful, it's too bad you can't interview him but he's been dead for a number of years, his name was Peter Gilbert.

KELLER: I remember Peter.

LINDAUER: Peter Gilbert was colorful to say the least.

KELLER: Long Island!

LINDAUER: Yeah, he was a very colorful guy. But that was one of my first jobs when I came to Prime, was that Peter was a very difficult partner. He was our partner; we were the majority owner.

KELLER: He knew how to play politics.

LINDAUER: He was tough, let me tell you. You don't want to know what Peter did because I don't know, but I've got a feeling.

KELLER: I don't want to know.

LINDAUER: But my job – Bob said "Your first thing is to cultivate Peter Gilbert and become his friend," because Ron Dorchester and Keith Cunningham, another gentleman who used to be with Bob, they just couldn't, it was all out war. So I spent a lot of time in Buffalo having dinner and watching Peter chain smoke himself to death and drink red wine, and going to Buffalo Sabers hockey game where he had a minority interest in it. He was a very colorful guy. So Peter and I hit it off and over time, we were able to convince him to sell, so that was one of my first assignments. As we got rid of Buffalo, we ran into the Atlanta situation...

KELLER: Tell me about that.

LINDAUER: Well, Atlanta was franchised, the franchise was won by a company called Cable America, and Cable America was owned by a guy named David Graham, who's a story unto himself also, and another gentleman who is very prominent, Jim Mekeson. They were a Canadian company, they won that franchise, and they proceeded to build it with whatever their operational style was and it was a disaster.

KELLER: Well, yes, because it was prior to any time they could deliver any signals.

LINDAUER: It was total, total disaster. So Drexel Burnham, in the form of Leon Black and Mike Milken, had talked to Toronto Dominion, who was the lead bank who was going to take a terrible bath in this deal, and they wanted to get somebody else to buy it and step into their shoes and see if we couldn't turn this thing around, and that's exactly what happened. Chuck Dolan and Cablevision tried to be the operator to get it, but for whatever reason Drexel and Toronto Dominion chose our company and we went in there and...

KELLER: They floated junk bonds on that thing.

LINDAUER: They what?

KELLER: They floated junk bonds on that as I remember?

LINDAUER: Yeah, it was a junk bond thing. A total junk bond thing. Went out and made presentations to Michael and all that kind of good stuff. So we took over that franchise and turned it around.

KELLER: Incidentally, and as an aside, Paul Kagan attributes the savior, financially, of the industry to Milken.

LINDAUER: Yeah, well, the junk bonds helped a lot. I don't know whether I'd attribute everything, but it...

KELLER: Well, he said from a financial standpoint, when things were really tough...

LINDAUER: Right. Well, banks still weren't... until we were able to convince, and of course, I think John Malone was one of the great lobbyists with the financial industry, the cash flow was what we should be judged from not earnings, which we didn't have earnings in those days. The public companies now are getting around to where they have earnings, but it's still pretty diminutive.

KELLER: How about the AT&T stock?

LINDAUER: But when that happened in the banking, we had banks and in fact I remember a story Bob Hughes told me one time, and if you talked to him I'm sure... He basically, I think, CPI stock went public at 10 and somewhere in the mid-'70s it was down to 1 and 5/8s or something, and the banks were all over him, so he just went to a meeting and threw the keys. He said, "If you guys want it, you can have it." So they of course surrendered basically, and made reasonable terms so that the company could survive, so it was tough times in the '70s to make this cable thing go. So we were dead in Atlanta, and then in the NCTA board at that time was when we were getting close to the re-reg, or de-reg, or '86. Somewhere in '84 or so, Tom Wheeler resigned and he had brought in a young attorney by the name of Jim Mooney, and Jim became the new president of NCTA. I was on the executive committee all this time. I was on the executive committee, even though I got off the board for a short while, when I got back in a few months later I was right back on the executive committee. And so, I'm trying to think... but Jim came on board and we started to work the de-reg, and Jim did a great job, and he was a hero because we finally won a battle with de-reg. There's a lot of debate about the compromises we had to make to be quote unquote deregulated because we were never really deregulated, but we had relief and we were able to raise our prices and do things and not have to go through the onerous rate making cases before city councils who really didn't even have the expertise to understand it or anything, as you'll recall. It wasn't like you were going to the PUC, who at least when you present them they've got all these experts that understand what it is you're presenting to them. We'd go through these elaborate rate making cases and some... I remember going to Springfield once when I was at CPI and I was stunned by the hoops we had to jump through.

KELLER: Massachusetts had a state cable commission.

LINDAUER: They did, a state cable commission. So, anyway, the de-reg contentions were, other than a lot of lobbying, were never – I don't remember them being that fractious because we wanted to be deregulated. Other than Leonard Tow, who wanted no bill and didn't want us to compromise.

KELLER: But at that time there was no chance at that, as I recall.

LINDAUER: No. It wasn't the real world, but Leonard – he was not on the board, but he was a very strong person and I think Leonard was so upset with the board that he sued the board, not only the association but each member individually. It obviously didn't go anywhere, but the threat was made and I think he filed the lawsuit.

KELLER: This was prior to the act being enacted.

LINDAUER: Prior to the act, and he may have filed the suit after the act was passed, I can't remember. So, Jim Mooney was a hero after that bill, and from '86 through '88 he was doing extraordinarily well, Jim was. But Jim's biggest mistake as the leader of our industry, so to speak, of our trade association, is that he didn't understand that he had to treat everybody, all his constituencies, pretty well. Jim, and I would tell him this also, he's a fairly arrogant guy. He got caught up in that he'd done so great, he thought he was bullet proof, he'd had the de-reg bill, and I used to always tell him, I said, "You stumble once and you're going to be in trouble." So, I got elected vice-chairman finally, some 7 or 8 years later, I guess in '89.

KELLER: That was what? '89?

LINDAUER: '89. And Jim was the president, and this is when the re-reg – we had raised rates according to the regulators and we were always the whipping boy of the press and the media, and so on and so forth.

KELLER: Enter Vice-President, then Senator, Al Gore.

LINDAUER: We had a new entrant into the cable industry at that time, in '86, which ironically we brought in to the industry to a degree. This was a man named Marty Pompadour, and Marty Pompadour owned some systems in Tennessee, but we sold him a system in Prince Georges County where we had bought it for – I'll give you the economics of this deal – we bought it from Storer for 49 million dollars.

KELLER: In that Storer fiasco between TCI, Comcast...?

LINDAUER: No, this was when they were still an operating company.

KELLER: Prior to that? Okay.

LINDAUER: They won the PG County franchise and they decided they wanted to divest of it.

KELLER: As a note, excuse me Jerry, as a note to this, anybody that would be interested in the Storer TCI deal please review the oral history of Julian Brodsky. Just as an aside.

LINDAUER: Oh, Julian? Julian, I'd love to see Julian. I love him, he's a great guy. But we bought that system, I think we bought it for 49 million dollars. We must have bought it in '84, somewhere in there, it had 30-something thousand subscribers, we paid them 49 million dollars and put 10 million dollars worth of capital in it and increased the subscribers within two years to about 77,000, and then this Marty Pompadour had a fund out of Merrill Lynch and decided he had to have a system besides what he had in Tennessee. So we put it out for sale and he paid us 198 million dollars for it, in two years, so that was our first big hit.

KELLER: Did he hire Dave Van Valkenburg then, as president of that – what was it called, Multichannel, or Multivision?

LINDAUER: Yeah, Dave – I don't know when Dave went with him, but he had another guy as his chief operating officer names Chris somebody, and Chris was the guy that caused us to have... Marty didn't understand the industry or the implications. He was a Wall Street kind of guy and looked at bottom lines, but didn't understand the politics of what he was getting into, what the franchising was all about, the transfers of franchises, what it took, and Chris went down there, and so we had been de-regulated, and they took over these franchises – I've forgotten who they were – and they arbitrarily raised the rates quite a bit.

KELLER: Quite a bit!

LINDAUER: Quite a bit, and then made statements like "We don't care what you think," to the city councils, to the congressman, "I've got a business to operate and we just paid a lot of money for these and this is what I'm going to do." And that cause Al Gore to get extraordinarily upset because it was in his state and Al...

KELLER: He was looking for a populist cause.

LINDAUER: A populist cause, and he's a populist kind of guy, and so he definitely took this cause up.

KELLER: Jerry, we just started to talk about the advent of then Senator Al Gore of Tennessee picking up the populist cause of anti-cable in Tennessee. What was the reaction of the board of the NCTA at that time?

LINDAUER: Well, we tried to explain to him that this was a maverick, that this wasn't our normal track record, but he had the issue and he just ran with it. And of course we had Tim Wirth there who was our sort of savior and was our proponent, and as you know in the re-reg act of what was it?

KELLER: '96.

LINDAUER: '96, I guess, Tim, when he was still the Senator went out and got it, filibustered it and did a lot of other things, so he was a great supporter of our industry and Al Gore just stayed an enemy and it got exacerbated even after they re-reged us because he had no use for John Malone, he called him Darth Vader, they had a very hostile relationship. When you have the largest company, in the form of TCI at the time, and take on Al Gore in the public arena, it is not a good thing. I would tell John or anyone – despite their great, great success and deal-making, I think John Malone is one of the smartest men I've ever met, but he never had any sense of the public relations and the politics or it could be he just never cared..

KELLER: Never.

LINDAUER: And John, when you talk to him, really just wasn't interested in that. He was interested in his shareholder price and what his company was going to do and what the technology was and what the new products were. He crossed all disciplines. I've often said about John Malone is that you could put him on a panel of nothing but experts in their respective field, be it financing, marketing, programming, engineering, technology, whatever it is...

KELLER: Except public relations.

LINDAUER: Except for public relations he was a tour de force. He can cross all disciplines. You know, a lot of us have been successful, we all have our certain niches and things, and we have a broad outlook. But nobody that I know ever had maybe the total grasp of these things as he did. Bud Hostetter is also superb, but he's a different type of personality.

KELLER: Bud's not an engineer though.

LINDAUER: No, he's not an engineer. So, John just had this breadth of knowledge and he was just totally impressive, but he had a deaf ear on PR and dealing with politicians and I don't think they ever realized how important they were to the industry and how important it was for them to really be a good example for the industry.

KELLER: They didn't up until the time that Hindery came on.

LINDAUER: That's right, they were the same way. John Sparkman was... sometimes you'd talk to John about something and he said, "Well, I'll talk to John and those guys about that," and Sparkman just didn't care. I mean, I like John, but they just didn't care about the relationships with the cities and the mayors and things, and it cost the industry.

KELLER: Very much so.

LINDAUER: It hurt the industry quite a bit in those days.

KELLER: Malone was never on the board of the association, was he?

LINDAUER: Oh yeah!

KELLER: Was he?

LINDAUER: Yeah, he was on all the time I was on the association. He got off sometime, I guess right after, somewhere in the early '90s after I was chairman, but he was on the executive committee, all the years I was there we were on the executive committee together. And John, the executive committees could get somewhat fractious to a degree because you'd have John on one side and Bud on the other side, and Hostetter and Continental were the paragons of virtue, so to speak, that did everything right, that had great relations with their cities and they walked on water, and you had John over here who was trying to run a great business and make acquisitions, grow the company, do all those things that he loved and cared about, but had sort of a tone deaf ear to the other thing, so you would sometimes get in interesting debates within the executive committee, but they always worked out. We were always concerned, I know I was when I was vice-chairman and chairman, that TCI would pick up their marbles and leave, and some people thought that would be good, but nonetheless they were our biggest dues paying member and we needed them inside the tent not on the outside.

KELLER: There was a time when TCI refused to pay the NCTA dues, wasn't there?

LINDAUER: Yeah, there was some debates as I recall on that, and they held back and things, so they wanted their way or no way on certain issues, but it never... while there may have been compromises to keep them within the association, it was never something that was really a deal breaker to everybody else. Whatever it was, and I don't remember all the little nuances and things, a lot of it had to do with personalities and different things, the industry for the most part stayed together. Except when, as we get to the re-reg in '92. Now I took over, I was vice-chairman in '89, and took over as chairman in '90-'91, and Jim Mooney was the guy, the president of our association. And when de-reg started picking up steam he tried to do it, and we did a lot of lobbying with Senator Danforth, who was also a cable hater, which also was a basically TCI problem in a city in Missouri...

KELLER: St. Joseph's?

LINDAUER: ... where they were sued and lost the case.

KELLER: And Jefferson City also.

LINDAUER: Jefferson City, and I think there was some fraud connected with it and somebody got fined or went to jail, or semi-close to it, and so it was a very bad scene. And so Senator Danforth was a very righteous kind of guy, very difficult to lobby. He was an Episcopalian minister by background. He was a very difficult guy, and so I started going up to see him and trying to placate the TCI situation, and once again, it's just like Marty Pompadour, these are aberrations and so on. And all of that of course fell on... they were going to re-reg us.

KELLER: I don't think there was any question. By this time Al Gore is Vice-President of the United States, isn't he?

LINDAUER: No, no, no, no. He didn't become Vice-President until '92. This is in...

KELLER: In the development of re-reg.

LINDAUER: In the development of re-reg, so this is the first – I mean, we had two bills. The one in '96 we had re-reg...

KELLER: '92 and '96, yeah.

LINDAUER: And then we had the one in '92. The one I'm talking about is '92 right now.

KELLER: Right, that was the harsh re-regulation.

LINDAUER: That's when they wanted to roll back our rates, which they did eventually. So none of our lobbying did any good. So then our strategy turned to – and there were great debates over this – is that George Bush was President and there was a group that wanted to make a compromise on the bill and there was a group that said "Damn Congress, Bush will veto it." He hadn't had anything vetoed. That debate went on for months and months. I'm trying to think of the sequence here. Oh yeah, Jim Mooney had arranged what he thought was a great compromise and he called me one day and said we've got to have a telephonic executive committee meeting, he laid out what this proposal was and he said that the Senate had to know in two hours.

KELLER: Do you know what his proposal was?

LINDAUER: Well, the proposal was the it was going to be a compromise but we were going to give up program exclusivity, which was a big issue, and so we...

KELLER: I don't understand. You give up program exclusivity from what standpoint? As far as selling it to other providers?

LINDAUER: Other providers. And so we... but the way he laid it out is that was an issue that we were going to get to keep. That was the deal. He had been called up to Danforth and I forget what other Senator staff and said here's the deal we'll give you guys. And the deal basically said everything was okay, and he told us we had to give them the response within and hour to two hours. It was crazy. I was very frustrated; I was chairman and I'm saying, "I can't believe this Jim. We're talking about an industry here, and you're telling me these guys need to know an answer in the next two hours and we can't debate it more?" He said, "I'm telling you, that's it." So we had the conference call committee, we gave Jim a thumbs up on a compromise as he laid it out, which included protecting program exclusivity. Then he went back...

KELLER: Because TCI would never have agreed to that.

LINDAUER: And then we had a press announcement and so on that everything was going to be hunky dory, and then when the deal came down in writing – because that's what I wanted, I said, "I've got to see this in writing. You're telling me orally." – when the deal came down it wasn't anything like the deal that he had laid out to the board. One of them was program exclusivity which we were going to lose.

KELLER: Did lose.

LINDAUER: And did lose. And so the board was less than sanguine about that particular development. So Jim, who had burned a lot of bridges through his own demeanor in a lot of ways with a lot of people, and I would tell him that if the ship ever got wounded he was going to be jettisoned, which he was. But once that hit that we lost that battle and then he, of course, was a proponent particularly of the Bush veto strategy – he laid out alternatives but when we knew we lost the compromise and then Congress attacked him – he lost his credibility, Jim did, because they said that he was a liar and misled them, told them we had a compromise, and we the cable industry backed out of the deal. Well, our version was that no, Jim laid out to us a deal we were willing to accept and we accepted it and then you drafted the legislation and it wasn't the deal we had accepted orally. So Jim got caught between having his credibility destroyed sort of on both sides, and that cost him his job because once your lead association guy loses his credibility with the public policy constituency you're pretty non-effective. So that cost him his job and we used to have this... we of course got re-regulated, but not on my watch. Bobby Miron was the chairman when I was vice-chairman and he said, "Good luck. It didn't happen on my watch." So then I got to be chairman and we fought it through my whole year as chairman and we weren't re-regulated and so then I turned the reins over to Joe Collins, and I thought that if we're going to get re-regulated it couldn't happen to a better company than Time Warner, although I love those guys. But they had been quite contentious – it's tough up there. All companies do what's in the best interest of their shareholders and their company. There's nothing wrong with that. But you have great rivalries between those larger companies particularly. The personalities get mixed into it a little bit and it's just very... sometimes it was difficult at that time to keep everybody together and on the compromise that we thought we had, when it unraveled there wasn't any way of putting Humpty Dumpty back together as far as the industry wanting this.

KELLER: So the act did pass. Bush did veto it.

LINDAUER: The only legislation he ever had overridden. Of course, then he lost the election six weeks later. Then of course our lobbying efforts turned to the FCC who were going to actually implement the re-regulation, and trying to get them to understand why...

KELLER: They didn't know whether they were swimming or on horseback at that point.

LINDAUER: Yeah, well we spent a lot of time over there with the various commissioners, and I've forgotten who was chairman before Reed Hundt, but he was the guy, I guess, for the most part, that's right, Clinton had come in – trying to convince them and lay out lots of models why our rates were justified and that we shouldn't be reduced, and of course history proved out they knocked us down 16%, it hurt our industry immensely, but like everything else that happened to us from the federal government, or any government, we bounced back and found a way to survive in that environment and then we got ourselves de-regulated.

KELLER: At that point they did, they knocked down the rates and it did hurt us – Kagan gave me a figure, something in the trillions for awhile – overall, but they did leave that loophole of allowing us to charge for other things that we'd never charged for before, as I recall.

LINDAUER: That's right, that's correct.

KELLER: I think it was TCI and Malone that took advantage of that to the greatest extent and it helped an awful lot as I remember.

LINDAUER: But we lost additional outlet revenue, if you recall. That was a big... we charged for every, as you know, couple bucks or buck and a half, or whatever it was, so we were still able to charge, we could have, but then we ended up giving it away.

KELLER: But immediately then, the industry started toward the act that finally ended up in '96, which was then to do away with much of what had occurred in the '92 act, and how did that develop?

LINDAUER: Well, that developed, I think, as I recall... I was off the executive committee I guess in '93 because as an ex-chairman I stayed one more year, so I wasn't in the inner sanctum per se, I was just a board member after that, but that came about because we had to have relief and we had a new president in the form of Decker Anstrom who was 180 degrees different from Jim Mooney, had developed great credibility, was able to bridge a lot of gaps and we were able to win over, through our performance, what our products were becoming, what the industry was becoming, and he and many others carried that message to the Congress and to the FCC, but Decker was extraordinarily deft and diplomatic and never bruised anybody as he moved through the halls of Congress or the executive branch of the FCC. Everybody like Decker and he had great credibility and he had no ego whatsoever and he just did a great job and built that association – over those four years, from '92 to '96 – to where we had credibility, we weren't looked on as an industry like we were Darth Vader, as Gore still looks on it. I can tell you that I had a basically one on one meeting with Al Gore – I say one on one, there were three others of us there – in Las Vegas.

KELLER: Now he's Vice-President?

LINDAUER: He's Vice-President, and we owned the system in Las Vegas by that time. We also had owned Atlanta, we had owned a lot of major markets around the country, and so while we were a mid-sized company at the time, we lobbied him in '96, I guess it was, that particular time, to get some stuff out of re-reg. We met with him and he knows our industry, asked a lot of questions and you answer them, so at the end of this – we were trying to get relief because there was some portion of the bill, I can't remember what it was, but it really hurt small operators and he was going after big cable operators. I guess this was '9... Let's see, we got re-reged in what year, '92 was it?

KELLER: '92.

LINDAUER: Okay, so this was definitely the de-reg but there some portions of the bill that were still bad and he was still wanting to get TCI and so on and so forth. I'll never forget this meeting because he listened and then turned to his chief of staff, whoever it was, the guy he had with him, and he said, "You know, I think these guys," it was myself and a couple of associates, and he said, "I think they've got some good points and I think we should address that because we don't want to penalize these small guys but we still want to get the big guys." I just can't remember the issues, I wish I could. We were elated.

KELLER: Well, with rate regulation was it for systems under a certain number...?

LINDAUER: Yeah, that's it, it was something... We needed relief on something, and he agreed. He said, "So you work with Jerry," he told this guy, "and see what we can come up with on this." So then we were small talking, we were at a fellow's home in Las Vegas, and this guy comes over to me while we're having tea or whatever we were having and he said, "Let me talk to you minute." And he pulls me aside and he says, "You realize the Vice-President can't deliver on anything he just said." I said, "No, I'm not aware of that. Why do you say that? I just heard him say yes, that he wanted to get us some relief. He's the Vice-President." He says, "Well, you know, you're pragmatic," he says, "You know and I know that Senator Hollings and Vice President Gore do not get along, and I can assure you," and Senator Hollings was controlling...

KELLER: The Senate Commerce Committee at that time.

LINDAUER: ...Commerce Committee. He says, "I can assure you that you will not be able to have the Vice-President making any inroads." Which I always thought was so interesting. How that worked, it just stunned me that you could have the Vice-President of the United States, who's still in the room, over in another corner, and he has told you that he's going to work with you and within five minutes this guy is telling you he can't do what he said he's going to do. I mean they didn't even wait a week or two or not return my phone calls, it was just the end of the deal.

KELLER: It seemed to become a regular situation with the Clinton administration.

LINDAUER: Well, that's another story.

KELLER: Totally another story.

LINDAUER: Totally another story.

KELLER: But anyhow, with these conversations then it started to lead up to the idea that maybe we were over regulated, which then led to the '96 cable act, which then took off some of the more onerous restrictions on the industry.

LINDAUER: Right. And the industry, even though we will always get bad press for raising rates, and all our presidents, now we have Robert Sachs there, his first speech to the industry more or less was hold down rates, and we've held them down. We're expecting other revenue sources as we move forward, as you know, over the digital systems and the cable modems and all the good things that are on the horizon, and there will be other revenues. But rates still have to go up. I always had a difficult time, not a difficult... I never could quite understand why Congressmen who thought that's the only issue they really understood about that rates, because that's the only thing the constituents ever complained about, but they never had any empathy that we had to raise rates. We needed to do that. We had bankers, we were the most debt-ridden industry in the world. To build this industry we had to raise rates and we thought they were relatively modest, but it was always with the press who were always saying "They're raising rates 12%" or they'd take one of the tiers that was going up 35% maybe for a few customers and say, the headline would be "Time Warner," or "Prime's raising rates 28%" and that wasn't really the whole picture, but we got hammered on that and we'll always get bad publicity.

KELLER: There have been some of my interviews in the past that have postulated that there may be a day when we'll give away television reception free, as a loss leader for some of the other services we'll be producing.

LINDAUER: Yeah, one can postulate that, but first we have to really... you know, the jury is still out. I mean, our stocks are up, everything's up. We've got the Silicon Valley that's pretty much convinced that broadband pipe is the way to go. When Comcast got the billion from Bill Gates that was really what started it, gave everybody a lift because our stocks, even in a bull market, had been never reactive. They were just flat. Paul Kagan can of course explain that much better than I can.

KELLER: Jerry Levin almost lost his job because of it.

LINDAUER: Yeah, so they gave a, you know we got new revenue sources that we hope and are real confident are going to come down the line, but in a few years...

KELLER: As of now though...

LINDAUER: Yeah, as of right now they're still de minimis and it's an evolving thing and if we don't get those extra revenue services don't think you'll be giving away cable television.

KELLER: Maybe not the pay service, maybe the basic reception service.

LINDAUER: I think there was another story I was thinking about... when I was chairman, one of my first jobs as chairman had been a constant beat from the programmers that they wanted a seat on the executive committee, and to show you how these big companies... The one that was selected by the programmers to get this seat if I chose – the chairman gets the sole right to choose a couple of members that are not officers, of the non-officers there are another three or four that he picks as his chairman's choices to be on the executive committee – so I was going to choose Tony Cox of Showtime because I thought Viacom was a big company, at that time they still had cable operations, they were a big programmer, and that they should be at the executive committee level, and so...

KELLER: John Goddard was on the board at that time?

LINDAUER: John was on the board and he had been chairman and he had been through, but he wasn't on the executive committee anymore, and so I thought Viacom should rightfully have a place at the table on the executive committee, and so there had been a lot of lobbying before that, and so I get a call one day from Joe Collins and he says you can not put Viacom on that board. I said, "What do you mean?" That was when Viacom was in a lawsuit over whatever it was, Comedy Channel or MTV, or whatever, they were all suing each other. So I remember telling Joe, I said, "Look, I hear your problems. I know you don't like Viacom and Viacom doesn't like you, but I don't have the ability, I'm not involved in how you do your business or who you sue or who are your enemies, but they are a viable representative and have a big interest in this industry and should have a seat at the table, not withstanding the fact that you guys don't want them on." Well, they were not happy about that and so I had to fly to New York to see Nick Nicholas and he and I had an early morning breakfast. We were worried that they were getting so angry about it they were going to make a tremendous issue out of it. So I had to go visit with Nick and we had a very nice breakfast, and he in no uncertain terms let me know his displeasure with my decision.

KELLER: Nicholas was chairman of HBO at the time?

LINDAUER: No, no, he was president of Time, Inc. at the time.

KELLER: President of Time, Inc., okay.

LINDAUER: He was the president of Time Warner at the time, they'd already done all that. And so I was able... Nick said he understood my position and they would abide by it, but it just shows you how there were a lot of personalities and dislikes.

KELLER: And the reason Collins made the call is because he was on the board?

LINDAUER: And he worked for Nick Nicholas, he reported to Nick Nicholas, and so he made the call because...

KELLER: Because he was a member of the board.

LINDAUER: ...Nick didn't want him on, and I'm sure Joe didn't either. It wasn't Tony personally. Of course Tony used to be an ex-Time Warner employee, but they didn't want Viacom in there. They were big enemies in the courts at that time. So that was an interesting thing. One other side thing that was, when I talk about our industry being collegial, we used to get a lot of trips, HBO takes people on trips and you do these boondoggles, but there was a trip that we made in '86 that Ted Turner put together, and he took a group of us, a large group of us, to Moscow. Every big MSO, CEO was there. For the most part, Gene Schneider, and Phil Lind from Rogers, and all these... everybody was there... Jim Robbins. And that caused – we were together for a week over there in Russia when it was still a communist dictatorship basically, Gorbachev was just beginning – and for some reason that trip really bonded us together even more so. It was mid-80s and it was just the collegialness and the fun we had and the adventures we had in that whole process. John Malone was there, Ted of course was there, and they were quite a pair. We saw John have a very, very good time in Russia. He let his hair down – he never had that much – but he had a ball.

KELLER: I want to end our discussion with your recollection of some of the very memorable characters that you've met in your term in the industry. Where would you like to start? You mentioned before, we already mentioned Julian Brodsky, who is by the way, one of the great characters of all times, and one of the great minds, great financial minds. Julian is vice-chairman of Comcast and is putting that whole deal together and we had the opportunity with Julian to go into some of the financial mechanizations of the industry and how he got Comcast going, etc. But what about some of the other people you were mentioning? You mentioned Crosby.

LINDAUER: Jack Crosby who really was the founder of CPI. But for Jack I wouldn't have ever had the opportunity to be in this industry. Jack was just the greatest guy. Jack was rich before anybody was rich here.

KELLER: How many times did they sell their system back and forth to each other, Lieberman and him?

LINDAUER: Jack in the '70s was perceived as one of the most successful men in the Austin area and then he sold CPI and he became richer. He had some tough times in the real estate business and things of that nature, but Jack stays the same whether he's worth x millions or whether he's had some down times. You never know. He's just a charming guy and a great conversationalist and loves to do deals. Even to this day, Jack is I think 10 years old than I am, I'm 63, I think he's 73, he's got two artificial hips, he's on an airplane every week trying to find other deals to do. So he'll never... But I owe him and I owe Bob, who I know you're going to talk to, the reason that I'm here. If it hadn't been for those two guys, and Bob was the one who really closed the sale, I would have never been in this industry. I met a lot of, from the very beginning I met a lot of interesting people, and of course everybody knows Ted Turner, but I met him before I was on the board. Bob took me when he was chairman to have lunch with Ted Turner and Bob Schmidt, who was then the president of NCTA and we were going to walk over and meet FCC Chairman Fowler. As I remember Ted at this luncheon, who had just won the America's Cup, and he had made somewhat of a... got a lot of bad press out of it, because he was inebriated too, listening to his story of how unfair it was and why that New York yacht club deliberately screwed him basically. He says, "We won that race, we're happy, we're drinking champagne, we're having the best time, and about an hour and a half later they come down and said you've got to have a press conference." Well, anyway, he explains all this away in only his inimitable style. He is, without a doubt, one of the most colorful guys.

KELLER: I think you can use that term.

LINDAUER: He was a visionary, he still is to a certain degree – I mean, he never loses his vision, he just doesn't have control of the company anymore. But he did a lot for our industry. Ted is the only guy, and I know him quite well in a business sense, but I've spent a lot of time on trips with him and I've been on the board with him all these years, but he speaks what's on his mind and he can say things that you or I or anybody else could say and we'd be fired, but Ted gets away with it because of his unique personality. But he is a very colorful guy.

KELLER: Bob Miron.

LINDAUER: Bobby Miron. Bobby Miron, who is one of my dear friends, was president of Newhouse Broadcasting and Cable Division. Bobby came on the board somewhere right around the time Doug Dittrick's chairmanship was over, so sometime in the early '80s, and Bobby is not a politician and it was a contested election and he got elected to the board.

KELLER: Who contested it? Who was his opposition?

LINDAUER: They had a whole slate, and there were only so many at large seats and there were probably eight guys running.

KELLER: Oh, you mean as far as membership on the board.

LINDAUER: Membership to get on the board. But he got elected, and so, we used to sit in the corner of the board rooms and he and I became good friends and Bobby through the years, he was chairman right before I was and then he was re-elected chairman here a few years ago, and did that I think when somebody couldn't serve, I've forgotten who it is, for business reasons or something, and he just kept the seat warm or something, but he did that. And Bobby is a guy who works for a very private company. I mean, they never get political. He's not a member of CablePac or anything because their company won't allow them to do anything, they're very private. But Bob has been, I would call him the great compromiser and conciliatory guy. Bob is always there when the association needs him. He's there for tough committee jobs and things. He's also there and bridges a lot of gaps between adversarial positions and tries to get, particularly with a larger company, to do it. So he's been a great thing. Bobby used to be concerned about making public talks and things of that nature because that was not his forte, but he actually got very good at it, and he had to work to overcome his natural reticence not to be in the limelight. Bob's a great guy.

KELLER: Bud Hostetter, or as he wants to be called now, Amos Hostetter.

LINDAUER: Amos, yeah, well he was Bud when I knew him. I still call him Bud now and then. He never does correct me, but I guess maybe... Bud was the Mr. Prince Charming of our industry and he's always had that reputation because he's testified before Congress probably more than anybody else in our industry because he's very credible and his personality is very disarming although he can be strong in his positions and his company was very civic conscious. Continental always was rated the best or near the best in any survey, and Bud was a very near and dear friend for many years. Still is, we just don't see each other very much. Recently he's come to some board meetings with his new affiliation.

KELLER: How's he going to fit into that culture of AT&T?

LINDAUER: I would think it's difficult, but I mean... I don't know. He's a non-executive vice-chairman, or whatever, chairman, I think it is, and he sits on their board. I don't think he's going to take an active role in operations or anything. Probably they're going to utilize him where he does best, to talk to his fellow cable operators who respect him a lot, to represent AT&T's position. Probably within the circle he'll try to help Armstrong understand these guys that he's dealing with and where they're coming from. I don't think he'll take a seat on the board or anything like that, but he's very active and of course his net worth is tied to AT&T, so he has to be cognizant of what's good for AT&T is good for Bud Hostetter.

KELLER: Obviously so. Right now, we should have gotten into this earlier, but you've been on the board of C-SPAN almost from its inception.

LINDAUER: Right.

KELLER: Talk a little bit about that and about your relationship with Brian Lamb, and how that whole group came together. I know who was involved in it, Bobby Rosencrans and John Saeman, and...

LINDAUER: Bob Hughes was involved in it early on too, but when I came with the company, or I can't remember... but I went on the board. I think I went on the board in '79 for Times Mirror, so it was founded in '77 or somewhere in there. Brian had this idea, as you heard many times, and he brought it to the industry and Bob and various people put up $25,000 and got this thing kicked off. And Brian is practically a household word now in our country, and who would have ever dreamed that, particularly since he didn't aspire to be, but he's on television all the time.

KELLER: But he is non-political.

LINDAUER: He is very non-political. If you get him a cocktail, he has certain opinions.

KELLER: I know. Oh, he has opinions, but he's never going to bring them out publicly.

LINDAUER: Never publicly. So, you know, interviews with him, and his reviews, obviously, he just asks questions. He's a wall that speaks, so to speak, he doesn't ever interject his opinions or anything. That was a passion of love for Brian Lamb and to his credit, as he moved through that, he could have had lots of lucrative opportunities to leave that job, make a lot of money like everybody else has in the industry side of it, but he never... he wanted... this was his baby, it's like his child, and it is his child because he's a bachelor, and it is his baby and he has made that thing through the force of his personality, which is a very gentlemanly personality, to get the industry to back him even though he had some tough times with some of the players. They wouldn't give him carriage in the early days and there were a lot of battles to fight, and we on the board would call the recalcitrant MSOs and try to get them to carry C-SPAN, and eventually we got 100% carriage. I know TCI was reluctant initially, but they came onboard through the years, but then he got C-SPAN 2, and that was the Senate and we had a channel capacity problem. So he wanted everybody to carry that 100%, and so he got mad at me in, I think in Las Vegas. We could only carry it partially. We didn't have a new plant that had channels, and he just lobbied you all the time and made you feel like you were violating your constitution, your country, everything, if you didn't carry all of his channels 24 hours a day. And he still doesn't have C-SPAN 2 totally carried, but he's got it pretty way up there in the 80s, I'm sure. But Brian was just, you know, he helped our industry a lot. C-SPAN did a lot, and it took a long time, to give us credibility. It was a public service that the cable industry provided. For many years nobody knew that, and to this day a lot of people don't know it, but with Congress, which was our main constituency, and since we're televising Congress, they knew who was doing this, and while it didn't influence their votes they just knew that we were, it gave us another notch of credibility, and we never had credibility for so many years.

KELLER: I mentioned that to Brian. I said the industry needed political clout, and he almost took my head off when I used political clout, but it was true. We did need it at that point.

LINDAUER: We needed it, and that's...

KELLER: Political recognition that we were doing something right.

LINDAUER: The recognition that we were doing something good, so while it may... I don't think anybody had any ulterior motives. The motive in founding this, because I was there, was basically that we needed to do something to give back to the American people as a public service. And also, there was the secondary reason that we needed something to say good about ourselves when all we were doing was raising rates, and doing all these things and not living up to our franchise promises as time went on, and things of that nature. So C-SPAN was a great...

KELLER: I don't think there's any question. C-SPAN and CNN, I think, are probably the two greatest things that have happened to this industry.

LINDAUER: I think Doug Dittrick was a great interesting character. He was the first guy that really in the modern era served two times as chairman. He was one of my mentors as I moved through the industry.

KELLER: And a former boss of mine.

LINDAUER: A what?

KELLER: A former boss of mine.

LINDAUER: I always loved Doug – I never worked for him, but I loved him. We had a lot of fun. I remember when I had been in the industry for two years he made me chairman of the convention in Los Angeles. So I did that. All these guys, they were mentors. Bill Strange was a mentor to me. I don't know if you've done Bill yet?

KELLER: That was Sammons, wasn't it, Sammons Communications?

LINDAUER: He was with Sammons, but Bill was a mentor that helped me understand the industry in those early days and always pushed me out in front on issues and so on and so forth. He was just a great politician and a great, great guy, and a great friend. John Saeman, not many people remember John. He sold out and has gone on – took his money and made more money in other avenues, investment avenues, but John was a great chairman and a great friend, and did a lot for the industry in those early days, particularly in the pole attachment days, things of that nature. Michael Fuchs was an interesting guy. I always liked Michael. There are always mixed verdicts on Michael, but he was a visionary in his own right with HBO, and I think HBO, that product, did a lot to help our industry immensely and gave it a lift. I think Michael should get a lot of credit for that.

KELLER: Chuck Dolan?

LINDAUER: Chuck was obviously a real pioneer. He goes back to the beginning, was basically one of the founders or the founder of HBO, and then built his company into the great company it is today. Chuck was selfless; he has a very low-key manner. When you first meet him you'd never know that he is the mogul that he is today, but he was the same when he was just starting to be a mogul, you know, way back 20-30 years ago. Though Chuck is very effective in politics, he's a great lobbyist, he understood New York politics, obviously quite well. But he's just a gentleman, he's tough in the clutch, but he's a fine gentleman. I've always admired Chuck. I think Leo Hindery is sort of a newcomer to our industry, although he was president of Western Communications in the Chronicle days and things. I think when Leo took over as president of TCI and restructured that company, he did the industry a great service, because he took a company that was basically, that the cable industry itself wasn't very fond of, and it was for sure that the congressional and the FCC and the cities weren't fond of, and he turned that company's image around immensely.

KELLER: In a very short time.

LINDAUER: In a very short period of time. He also turned it around fiscally. So Leo, in this new history of ours in the late '90s, was a major player and did a lot of good for this industry on a lot of ancillary issues, whatever his causes were, and he put his money where his mouth was on so many things. He was a great guy. I mentioned Decker earlier. I think Decker Anstrom... all of our presidents were good guys, and they all had done good for the industry, and most of them left on their own. Jim was a little more cautious. I mean he left on his own, but he was encouraged to leave on his own. But Decker...

KELLER: Peter Barton. Did you know Peter?

LINDAUER: I knew Peter very well. Peter, when he was John Malone's assistant, and I was chairman and on the executive committee, whenever I'd see Peter for whatever reason, he would tell me how totally screwed up this industry was and how all of us guys on the executive committee had our heads in the sand and we were dumb about this and dumb about that, and I got to like Peter a lot. I mean, I loved Peter, and we went on some trips together and had a good time, but Peter has a Barton theory and that usually prevails in his mind.

KELLER: Oh, no doubt about that!

LINDAUER: He's very strongly opinionated. There's no doubt about that. Peter was great.

KELLER: John Sie, as long as we're on that same boat.

LINDAUER: Yeah, I had some contact with John, but not a lot through the years. He was always on the programming side, and he wasn't involved in NCTA politics or anything. I'm trying to think... there are so many that I can't...

KELLER: Spencer Kaitz.

LINDAUER: Spencer was, is, president of the California Association, has been a tour de force with them and has a tremendous track record. I never dealt, I never was on the California Association, and so I didn't spend a lot of time except when I was president of the NCTA, talking and doing various things, but the California Association is great and it's been under his leadership since his father died, and it was their idea to find the Kaitz fellowship and things of that nature. So, Spencer and his dad before him were great assets to our industry, and Spencer still is. I'm trying to think of some other... Gus Hauser was a colorful guy. I liked Gus, even though he beat me that time for vice-chairman and we beat him the next year for chairman.

KELLER: Did you know Irving Kahn?

LINDAUER: After he got out of prison or something he came and talked, but I did not know him. I thought I might have seen him before he went to prison. When did he got to jail, in the '80s?

KELLER: I don't remember the exact date, but it was somewhere along in there.

LINDAUER: Bill Bresnan has been an institution.

KELLER: Yeah, he still is.

LINDAUER: He's been on the board. He has been on the board longer than I have, Bill has.

KELLER: He's chairman of The Cable Center, as you're aware.

LINDAUER: Yeah, that's right. So, Bill is a wonderful guy, always there when you need him, just a real gentleman. If I had a list here I could talk about every one of them.

KELLER: Oh, I'm sure. I just wanted those that you could remember right of the pat. What about some of the Texas people? You mentioned Bill Strange and Crosby and Hughes, which are probably... Ben Conroy?

LINDAUER: Ben Conroy. Ben was chief operating officer when I joined CPI and I worked with him for a year and a half. He was a very lovable curmudgeon and a tough nut. There were some internal things that were going on at CPI that he didn't like at the time, and I don't think Ben really wanted to sell the company when it got sold. I'm just conjecturing, but it did get sold. He has been such an industry stalwart, was so involved in the Texas Association, and even in his retirement - he owned some cable systems, but I don't think he's owned any for a number of years now.

KELLER: He hasn't.

LINDAUER: He stays very involved. He is a reservoir of knowledge about our industry from the beginning days. He is a great piano player. He is a charming guy. But I never had – other than that year and a half – I haven't really been around Ben except to say hello or see him at something like that.

KELLER: Jerry, before we wrap this up, is there anything that you want to add as a tag? We've been going almost for two hours now.

LINDAUER: Yeah, well, I'm sorry.

KELLER: No! Not at all! It's been extremely interesting.

LINDAUER: The only thing I'd say is what I said earlier. It's been a great ride. I had a twenty year career in the Marine Corps, which was a great career, I've had 22 years with this industry. I couldn't have had two more divergent, different careers, and I have loved them both and have dear friends in both, and I will always be grateful to the guys that founded this company, Bob and Jack before him with CPI, and grateful to so many guys down through the years that have helped me. I've learned lessons from them and I've just thought this was one of the greatest industry's I've ever seen, and to be part of it during these growth years. I never knew that when I got in it. I don't know, as I said earlier, whether there's going to be a quote unquote cable industry anymore. It's changed dramatically, but we did, and I was part of that group of entrepreneurs that built it up to where it has the platform that had so much credibility and the vision – not that I had because I wasn't a real pioneer, I didn't come in – but I don't know whether they had a vision, but they knew they had something that was going to be good and good for them economically, but also good for the American consumer. It took a lot of battles, we had a lot of enemies on many, many fronts, and today it has grown into one of the major industries in this country and is going to merge with the internet world and it's going to be a different deal. So it won't be the same battles, and I don't think the industry can stay as collegial as it used to be, because they do now compete, not in the cable television product, but the internet product and many other things, and many have their partners on one side and enemies on the other side – competitors on another side, I should say – so it's not quite the same group. It's a different set of dynamics.

KELLER: It's almost like incest now, isn't it?

LINDAUER: Yeah, it's hard to figure out, and I think Bob Sachs, our new chairman, it's going to be interesting to try to hold this group of rather large companies, the big seven so to speak, and I don't know which one of those will go next, to be united on public policy issues. Because there are going to be a lot of issues that it's not going to be, as I started to indicate awhile ago, each of these companies are always going to do what is best for their shareholders and debts for their company.

KELLER: And they have to.

LINDAUER: That's their row, and sometimes they just have to march to their own drum and that's happened throughout my tenure. Some company just will not support a position and you just have to either not do it or do it without their support and keep marching anyway. So anyway, it's been a great time.

KELLER: Jerry, we appreciate it. It's been a fun conversation.

LINDAUER: Okay, Jim, thank you.

KELLER: This has been a presentation of the oral history program of The Cable Center, and thanks to a contribution and donation from the Gustave Hauser Foundation. Your interviewer was Jim Keller. Again, thanks very much Jerry, we appreciate it.

LINDAUER: Thank you.

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Phil Lind

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Interview Date: Thursday February 15, 2001
Interview Location: Toronto, Canada
Interviewer: Jack Cole
Collection: Hauser Collection

This interview was conducted with Ted Rogers and Phil Lind.

COLE: My name is Jack Cole and we're here in Toronto at the headquarter offices of Rogers Communications to interview two distinguished gentlemen who have a long history in communications and cable, not only in Canada, but their neighboring country to the south, the U.S. This interview is with Ted Rogers, Edward S. Rogers is his formal name, everyone calls him Ted, and Phil B. Lind. Both of them are Toronto natives, having been born in Toronto and I think we're going to let them talk for themselves. First I want to say that this interview is made possible through the generous grant of The Hauser Foundation. Ted, we're going to start with you because age before beauty I think.

ROGERS: Oh, you're letting the youngest start are you?

COLE: I know you have not only your own distinguished background in communications, but I know you have a long and storied heritage in communications starting out with the production of radio tubes, radio receiver sets, and why don't you tell us something about that.

ROGERS: Well, thank you very much and thank you for coming to Toronto. We always enjoy distinguished visitors and we thank you very much for this honor. Like so many people in the cable and broadcasting industries, family plays a big role and in my case my father invented the alternating current tube. Before that they were all direct current tube and you had a bit of a hum behind it and that made possible the radios being able to be plugged into the electric light current, as it was then called, and operating on alternating current. So he started with his radios, Rogers Bacherless Radios, in 1925 and they were introduced here at the Canadian National Exhibition and sold across Canada and in the United States. He was an inventor, yes, but he traveled everywhere. He picked up ideas, he visited many laboratories in Canada and the United States and he would pick up an idea here and an idea there and then add his own ingredients to it, like so many others that you and I know and respect in our industries. And then he started, using the same principle of alternating current, he started an over-the-air radio station called CFRB, Canada's First Rogers Bacherless, and that really was like the FM radio of today. It didn't have that hum behind it and now you had the AC radios and the AC broadcasting. It was the first station in the world to use an alternating current and that sort of super sound. That was in 1927. In 1931, he got a license for television broadcasting here in Toronto, one of the first in North America.

COLE: In 1931?

ROGERS: 1931. One of the things I'm proudest of was of course these were the depression years and he ran an ad apologizing that they were 1,800 orders behind in 1930 and of course there was massive unemployment which increased and here he was apologizing that he couldn't make them fast enough for what the public wanted. So he created employment, he gave hope to people, he made his customers' lives just a little better, he found needs to fill and I think he surprised and delighted people with his products. And of course those are all key words for Phil and myself and our company – to find a need and fill it, to try to surprise and delight our customers, try to be innovative – not just in a technical way, but with products. He was working on radar in 1939 when he died at the age of 38.

COLE: And how old were you when he died?

ROGERS: I was five and when you're 38 you don't have a lot of life insurance and that sort of stuff and so most of what he had was closed down or sold or I say stolen by some rogue. We had enough to be comfortable. The war was on and so on but my mother was always very strong that I had an obligation to try and get it back and to do my best to get the family name restored in communications to what it was. So she was a very strong, beautiful, talented woman, a person that I would debate with and argue with. I remember I was at law school one year and I was very active in politics and I had a little radio station and various other things and I failed and then they changed the course and I had to go back for two more years if I went back. So I went to her and said, "This is ridiculous, I shouldn't do this. I've got to get on with my life." And she said, "Ted, if you start something, you finish it." Great lessons.

COLE: Good advice.

ROGERS: Good advice, great effect on my life. So that's the background in the Rogers family of communications and of course Craig McCaw, Ted Turner, so many people in the communications industry had a background where they had family in the business and it inspired them and helped them.

COLE: I even have a recollection of at one time you were booking bands around the country. Was that when you were in college?

ROGERS: Yes it was, and I had ten bands at the top and I was working in a radio station in Windsor in the summer.

COLE: And that was in the days of the big dance band that was the rage.

ROGERS: The big dance band. I worked for Symphony Sid at CKLW and then on the weekend I would take a car and I would go and visit about ten sites and I would collect from the owners and pay off the people. I had a problem because at the end of that cycle was a place called Baysville and I was dating a girl who was there at a camp. So it was important to me, you know, that everything was fine at Baysville and it was owned by two policemen, this dance hall, and they came to me, oh I guess about August the first, and they said, "We're not making a go of it. We're not able to afford to pay you anymore for your orchestra." This was sort of tragic news for me and I said, "Have you ever considered selling liquor?" And they said, "My, what an idea." And so they survived for another four weeks and on the last week of the year, the long weekend, they were raided and closed down, but at least we got through the summer.

COLE: Did you know that your fabled neighbor, late neighbor, to the south, Irving Kahn, when he was a college student, spent his extra time booking bands through his uncle, who was Irving Berlin, and Irving told me that he never had more spending money then when he was booking those bands.

ROGERS: Well, I love music and I love business and I love meeting people. The first thing was to get the band contract. The next thing was to then say to them, "Well, would you like us to supply the sound system?" And we would charge for that. But now you had control of the hall and once we had the sound system and the orchestra, then I got into a third business which was taking pictures, Polaroid pictures, and through the sound system I would say, "Now you've got your dream girl here tonight. It's a wonderful evening, great temperature. This is unique and you don't want to lose it; it's a memory you should cherish forever. And the price is only $2.49." My cost was something like 40 cents. My final thing was a tap dance routine. For an extra $10 I would do a tap dance routine. There weren't too many requests, but...

COLE: I was going to say I bet you did a lot of tap dancing.

ROGERS: Not as much as I would have liked. I think the cable business and the broadcasting business are very much like what we're talking about, the band business. Finding needs, making people happy, making them laugh, entertaining them.

COLE: Well, I know that one of your theories of business, for example, didn't you at one time make FM radio receiver sets available to the public at cost to build up an audience? That is such a lesson to the cable industry, how they have given programming to build up connections.

ROGERS: Well, I guess we're jumping ahead a little bit and I was fortunate enough to be able to buy a small FM station back in 1960 for $85,000. It was the nation's first FM station and it really wasn't a radio station. It was there to transmit background music without renting wires from the phone company, but the fellow tired of it and I was able to buy it. And you're right, then only about 5% of the homes had FM and in 95% of the homes and cars you couldn't listen to us. So what we did was, we had Canadian Westinghouse build radios, FM radios, and we sold them at cost and we put them free into the reception rooms of the advertising agencies and into the media buyers and that sort of stuff, and they loved the music.

COLE: When did you first become involved in the cable TV side of the industry?

ROGERS: That would be about 1966-'67 and Phil and I got together in 1969 and we've grown ever since. Had a lot of fun.

COLE: Tell that story about when you were in college and you were a little bit of an entrepreneur with an antenna aimed at Buffalo.

ROGERS: Well, I was in boarding school and in those days they did not allow television in the boarding house. So, I was challenged by this and I managed to get a small television set and get it into my room and put it in the cupboard and then I took an outdoor antenna and laid it flat on the roof of that house, the house that we all lived in. And then I put pulleys down, just outside the room that I was in. So during the day it would lie flat and at night with the pulleys it would pull out and it was aimed at Buffalo and you could see the television quite clearly. At the end of the time, I would put the pulley back down and you couldn't see the antenna during the day at all. The only trouble was there was a night there was an ice storm and I was trying to pull it up and trying to pull it up and unfortunately, it broke and the antenna half up crashed down and broke the junior housemaster's window and Miss Mulholland's window and then crashed into the cement. Of course there was a huge uproar, all the lights went on and the senior housemaster, his name was Mr. Bigger, he didn't hesitate, he aimed right for my room.

COLE: Well, I imagine when it was working your room was rather crowded.

ROGERS: That was the start of Rogers Cable because I made sure I got favors in return.

COLE: Now Phil joined you in the late '60s?

ROGERS: Yes, it was '69 and Phil might tell you about some of our first efforts in community programming, which has been very important to Rogers and to the whole industry. Remember the time we climbed up?

COLE: Phil, tell us about that.

LIND: We were televising the air show in Toronto, only the problem was we weren't very skilled at managing cameras and so we'd have a spotter and he'd say, "Now, here comes the plane. The plane's now coming." So we'd line it up and sort of set to follow it. Well, of course the planes were far faster then we were. And we'd be, "Where is the plane? Where is the plane?" And the plane's gone by.

ROGERS We wouldn't shoot directly into where the plane was coming from; we'd try to catch it from a cross-shot and of course we weren't very smart so... But it was fun.

COLE: When Phil came you really got involved on the cable side and began to grow and grow through acquisitions and franchises and my recollection is that not only did you grow in Canada; you acquired some very valuable properties in the United States.

ROGERS: But before we could do that, we had to make right what we had here. We had to get the thing so it had a semblance of breaking even and moving forward and Toronto had many new Canadians, people coming from Europe and different countries and they didn't speak English. So our salespeople going to the door would not make a sale. This was tragic; we were running maybe 35-40% penetration. We didn't have enough money to pay the interest, and so Phil came up with an idea and that was, we were only twelve channels in those days, we'll get converters. We'll increase the channel capacity and we will start to program separate channels with different language programming and then we'll hire some language salespeople and go to the door and say, "Guess what we've got for you? Programming in your own language! This is unique; you can't get it anywhere else but Rogers." So we went from 35% to 45% to 55% to 60% penetration. Now the bankers were smiling and actually paying for lunch and now we could move on, but Phil sort of thought before we do anything we should try to maybe do a merger here in Canada and then move into the United States.

LIND: I suggested maybe one merger but of course Ted said, "One more."

COLE: One's not enough.

LIND: One's not enough; what about two or more. So not only did we acquire Canadian cable systems, and Jack, you were there at the time. You were representing Canadian cable systems.

COLE: Another one of my clients gobbled up.

ROGER: The thing that was astounding to me was, we went to them and said, "Look what we've done here with multi-language programming, we're the very best in engineering, we can help you people. So we'll just sort of merge our companies and take over your management."

LIND: And they were outraged because they were like four times our size and they said, "Why would you merge with us? We might take you over but you don't take us over." Well, we did.

COLE: Phil, was that the first big merger in cable?

LIND: During the '70s we grew ourselves. We just tried to get, like Ted said, we got extra channels and we grew our business but then in the late '70s we started to get on the acquisition trail.

ROGERS: For example, Canadian Cable Systems had Syracuse.

COLE: Yes.

LIND: But even before the States. We were interested in CCL and we acquired CCL and then in 1980 we acquired Premier Cablevision out west and so at that point we were huge in cable.

COLE: You were by far the largest Canadian operator.

LIND: Yes, and at that point, the CRTC said, "Mr. Rogers, we don't want to see your face up here for the next ten years, anyway." And so we said, "What can we do? I guess we go down to the States." Canadian Cable Systems had Syracuse at that point and we thought, "Well, there's something to do down there." So we started down there.

COLE: And you had some major franchise acquisitions down there.

LIND: Oh, absolutely.

ROGERS: Well, his first one was Minneapolis.

COLE: I remember that!

ROGERS: We won it and we lost it and we won it.

LIND: It took us many years because Storer was...

COLE: And lots of legal fees.

ROGERS: Oh yes, you're right.

LIND: Lots of legal fees. And then we had Portland, Oregon. We had the suburbs of these areas too. We had lots of communities in Orange County in California. It just grew and grew and grew.

COLE: As a matter of fact, Phil, weren't you at one time the president of the Canadian Cable Association and I know you were on the board of directors of the National Association in the United States and I don't believe anybody else has ever held those dual positions.

LIND: No, never.

ROGERS: Now, you know what's interesting back in the early '80s – the engineering plant that we built, I'm going to brag for a moment...

COLE: Please do.

ROGERS: ...was so good that all of the channels then were on channel, we didn't have leakage and things like that, and secondly they were interactive in real time. Interactive in real time, which I mean, now they're just starting to get this stuff to work.

LIND: Yeah, and guys like John Malone were very, very interested in what we were doing in interactivity, but you think of it, it's 20 years later and we're still trying to get things done.

COLE: Find the right box.

ROGERS: Yes, that's right. It's ridiculous.

LIND: We were there in the early '80s. We had printouts where we watched every house, every six seconds or something, are you on, what channel, etcetera, etcetera, automatically. At the NCTA board meeting I'd always sit there and I'd always bring these read outs and Malone would just sit right beside me every time because he liked that stuff a lot.

ROGERS: We could tell at any half hour period what all our customers were watching. In other words, you might have 82,000 were watching channel 10 and 91,000 were watching channel 12.

COLE: So much more sophisticated than the polling processes that they were using.

LIND: Absolutely. And we saw things like HBO winning in number three and number two spot at say 11:00 at night, things like that which were unheard of. I mean, HBO second in cable households? True, you know, but not widely known.

COLE: And not true in a speculative or guessing kind of way, but specific figures.

LIND: Absolutely.

ROGERS: But there were storm clouds. There was trouble. Because my friend Lind, he would be winning franchises and then Watson, he'd be building them.

COLE: Promises v. performance.

ROGERS: And then they're all looking to me to finance them.

LIND: Yeah, what's the matter with that?

ROGERS: And Phil was getting to be too successful. Just to give you one example, we had a system at Mulino, Portland, and I think the same chap on regulatory is still there.

LIND: David Olson.

ROGERS: David Olson. David, if you're watching this, good luck my friend and we love you. But you see, Mulino was spread out and was going to cost a lot of money and you'd have to build a business case and go to the bank and the bank would say, "Well now, we'll loan you money and we'll give you so much money per customer you have or it would depend on the cash flow." There would be always a formula deal as you know, so we would work this out and go in and the manager would approve it and it would have to go to head office be all bedded. The problem was that while it was being bedded, we were maybe not doing so well and by the time they came back and said, "It's approved." We'd say, "Well, there's a problem here. We're in default." And they guy would say, "How can you be in default on a brand new loan? How do I process that?" So we went through that six times.

COLE: It must have been some comfort that you were not alone in that.

LIND: Well, it was some comfort, but it wasn't much comfort to us. I mean, the fact was, none of these franchises made any sense economically unless you considered terminal value. Well, they wouldn't let you consider terminal value.

COLE: Banks were not fond of that.

LIND: And we were lucky because we had Canadian banks who were familiar with cable more so than U.S. banks.

ROGERS: So they helped us and as a matter of fact, the Toronto Dominion would go and set up sort of wooden shelters where we were in Orange County and open up branches and things like that. They're all closed now but we had a lot of support from our Canadian banks and from some U.S. banks. I think the banks were very kind to Rogers.

COLE: Well, when you got those franchises, and Phil, I know you had a great deal to do with the franchising part of it, it was an environment I recollect in the United States where you had to promise the world even to play in the game and the franchising process was a little bit of "can you top this?" And the high bidder gets it and then it became a process of building a system that had some financial realism to it.

LIND: There was a certain amount of once you got the franchise, a year or so later you had to go back and have a day of reckoning with the...

COLE: Do a little bit of adjusting.

LIND: Yeah.

ROGERS: This was a big of a racket, by the way. This was his guaranteed income. It never stopped.

COLE: Phil had a reputation in the United States of being a master at that task.

ROGERS: We call it the get back program. You see, the first thing is you give them all these bonuses for getting the franchises and then Lind comes to me and he says, "Okay, here's my criteria for next year." And it's to get back. I'll never forget, we promised to plant 100,000 trees in Portland or some such place. 100,000 trees? I mean, there wasn't space to plant 100,000 trees. So we had to deal with our friend David Olson and I don't know what we gave him instead of 100,000 trees.

LIND: But by and large we had really sterling relationships with our cities in spite of the fact that we had to get back. We had some difficult people to prove.

COLE: Part of your job was to cultivate those relationships and to cultivate some manner of trust existing between the franchise authority and the operator.

LIND: And we always have had very good relationships that way.

ROGERS: Not to flatter Phil, but I think that's totally because of Phil personally and the people that he brought around him, had a feeling of trust and confidence and so on. I think it also helped that we were from Canada. I think that they felt Canada is a small country and over the years it's been a good neighbor to the United States and notice where these markets are – Minneapolis; Portland, Oregon, in other words, not too far from the border.

COLE: Border states really.

ROGERS: Border states so if things went back we could sort of run out fast.

COLE: Phil, why don't you tell us something about those days when you were engaged in the franchising of systems and your competitors were the fellas south of the border who were the local boys.

LIND: Well, that was always something that we had to deal with obviously, because they were Americans and we were not. And they used to make a big thing of that, say, "Well, there's a foreigner, don't go with them." So one of things we did was we always had a high degree of local content. In other words, we had 10%, 20%, 30% of local ownership in these and they were tax driven deals.

ROGERS: Limited partnership.

LIND: Limited partners, but they had to put up money. They weren't like these rent-a-citizen deals.

COLE: They were real business deals.

ROGERS: Yes.

LIND: Yes, and so we did that and we always found really good local partners to partner with but that sometimes wasn't enough. I remember one time when it was an energy crisis and somebody in Canada, the Minister of Energy said, "We're going to stop gas going down to the States." And we were like, "Oh my God, this is awful!" But then, one time this Iranian embassy, well when the Iranians flipped over and had a revolution and then Khomeini or whoever and then the Americans were...

COLE: Held hostage.

LIND: Yes, held hostage and then they escaped through the Canadian embassy.

ROGERS: Ken Taylor.

COLE: Yes.

LIND: Well, that was huge for us. For example, we went down to the Minneapolis Star & Tribune and took out a full page ad – "Thank you Canada" from Americans. But we were the Americans. We played Canada. And things like that. I mean, we wanted to say that we were two countries very aligned. I mean, we weren't foreigners in the classic sense. I remember another case where there was a guy associated with another group in Portland and he stood up and said, "You in the city council shouldn't have Canadians down here in Portland." And I thought, "My God, he's the president of a major paper company, pulp and paper company, that also has interests in BC." So I called up the Minister who was regulating that in BC and I said, "You might want to hear what this guy had to say about this." And then he called up the guy and he said, "If you're going to say that then your BC licenses are in jeopardy." He said, "Oh my God, we're not going to say that." So he had to get up then the next day and apologize for everything. So of course all that played well for us. We just wanted to be like everybody else, that's all. Actually, we wanted to be more American than them. We wanted to out-American the Americans. That's the only way to win franchises in the States.

COLE: Well, it must have been successful because you got more than your share.

ROGERS: No, we didn't get more than our share.

LIND: We did actually.

COLE: Yeah, you did.

LAUGHTER

LIND: We got almost everything we applied for. We didn't win in Miami and we didn't win in Clearwater, but outside of that I think we won almost everything we applied for and that was fairly rare.

ROGERS: Well, Phil, again not to flatter him, but Phil a) because of his personality, his background and interests and his ability to attract a good team really caused that to happen because they're looking to the people who they're talking to and judging the applicant by those people.

COLE: Well, you two gentlemen have been a good team for quite a long time now and as I see it complement each other very well. Tell me a little bit, Phil, about when you decided, and I'm not sure when this was, when you decided to sell your U.S. properties because it was not too long ago, was it, that you got out of the United States.

LIND: Well, we did it in two times actually. The first time was in 1979, where all of these things that we've done – we should discuss Bobby Rosencrans too, and the UA Columbia thing.

COLE: You got a lot of little systems. Some were little. San Antonio was huge. That was a very nice acquisition that you all made.

LIND: Ted?

ROGERS: I bought that phoning from Quebec City from a hotel room. I more or less made the deal on the phone. I probably overpaid but we ended up 50/50 and if I knew then what I know now, I would have dealt with it differently. I think we could have done things differently. We had partners who were of strong opinions and we were of strong opinions. Rosencrans ran it, an outstanding individual.

COLE: Absolutely, a perfect gentleman.

ROGERS: And we were very short of funds as well and that caused us to have to take certain positions. You know, I wish we could have developed it all together but we couldn't. We had what we had won in the franchise and then we had this other interest and we never sort of got them all put together.

LIND: And the debt load was huge for us. Huge.

ROGERS: And the phone calls kept getting more intense. (LAUGHTER) It's all very fine until the work out squad starts to go around the floor. We still remember that fellow.

COLE: It's an experience that many cable entrepreneurs have undergone.

ROGERS: Four times. Four times mortgages on the house. But I think '87 would be the final...

LIND: Yeah, '87.

ROGERS: I think we bought that 50% interest in '81, I'm just trying to pull it out.

LIND: That's about right.

ROGERS: We sold in '87 because we were in wireless in Canada.

LIND: '89 was actually the termination of the sale, in '89.

ROGERS: We couldn't do both. Financially we couldn't do both, so we had to make a decision. Was it the right decision? Financially, probably not. We probably should have stayed in the States and not done wireless, except we were convinced you had to be a certain size in the States and I couldn't figure out how to put them together with the limited resources we had. Remember, I started with just that FM station I paid $85,000 for, so I didn't have a lot of equity.

LIND: If we'd had more equity we could have been a major player in the United States. At one point we were like third or fourth or something in the States.

ROGERS: We like the people in the States.

LIND: Oh, wonderful.

ROGERS: We got along with them well. They loved Phil; he was on the board for many years. We never really had any arguments. We treasured the opportunities we had in the States and just felt really good about it and in fact, still do.

COLE: Well, I couldn't agree more that Rogers has always enjoyed, because of its people and you two, a marvelous reputation in the States for integrity and just good people.

ROGERS: Thank you. Maybe they don't know us too well.

COLE: Maybe they don't get here too much, huh? Phil, you took a major part... when you all acquired McLean Hunter here in Canada, that raised a bit of an uproar, did it not, at political levels?

LIND: In Canada?

COLE: Maybe a concentration of control?

LIND: Yeah, but you know, we managed to put that one to rest pretty quickly. There was an uproar at first but then we were able to, Ted appeared at that press conference, remember? And I think we talked about selling Canadian stories, Canadian ideas, things like that. We managed to put that to bed and for the most part, most people supported the acquisition of McLean Hunter throughout. The biggest problem was in selling that U.S. piece because Ted Rogers, you know, likes to make challenges and in this case it was a real challenge because he had, what? 90 days or 60 days or something that he had to get this thing through. Not by the regulator because this was an open tender and what did you have? 60 or 90 days?

ROGERS: Something like that. Yep.

LIND: And we had to get permissions from the States. We couldn't close until we had permissions and so...

COLE: Did that mean dealing with every franchise authority?

LIND: Yes, absolutely. And we had, honest to God...

ROGERS: Here we go again for the bonuses.

LAUGHTER

LIND: Yeah, well, I practically didn't sleep at night on that because it wasn't like most of the time when you have a year or two and so you can take your time with it and the recalcitrant ones you don't care about for awhile. This time we had like this much time to get them all and we were terrified and then the biggest problem was the FCC because initially we had with McLean Hunter a hostile takeover. And that's okay at the FCC, they have rules for that, but they don't have rules for a friendly takeover within 30 days or 60 days. They don't have those rules. They can't do that. They don't have that.

COLE: It makes no sense.

ROGERS: I know. It makes no sense.

LIND: But my God, I was just sweating bullets and Les Adler of your firm was the greatest. Absolutely the greatest.

COLE: I appreciate hearing that and so will Les.

LIND: Well, he was and we had our people fanned out all over everywhere trying to get these cities to approve this deal quickly. So we had guys in Florida and guys in Michigan. Remember Don Vardan in Detroit? We were just frantic trying to get these things approved so quickly.

ROGERS: But it worked out. I wish we hadn't sold Fort Lauderdale, I mean what a wonderful market.

LIND: Exactly.

ROGERS: But you can't do everything. That's the trouble. We're very fortunate with what we have at Rogers.

COLE: Ft. Lauderdale would be nice this time of year.

ROGERS: Well, we'd have to go down and inspect it. Always of course at this time of year. And the boat show is in Ft. Lauderdale too, in October.

LIND: And San Antonio's always a great place to go and visit.

ROGERS: And what do they call it? The Walk?

LIND: Oh, yeah. The Riverwalk.

ROGERS: Unbelievably nice.

LIND: So it's a great place. We wish we were still there, but...

ROGERS: We made a lot of friends.

COLE: There's no question about that. You all did make a lot of friends and preserved a reputation that was richly earned.

LIND: And Drosis? Angela Drosis? Let me tell this story. Missy Gurner was asked by Ted to sort of work up a memo on the subject. They had the San Antonio Spurs; they had made a deal with the previous – Rosencrans – and boy, oh boy, Rogers looked at this thing and said, "We're losing. How could anyone have signed this deal?" Rosencrans signed it because he was after the franchise at the time, but the deal wasn't too sensible a deal and Rogers said, "I've got to get out of this. This is crazy." And Angelo Drosis, who owned the San Antonio Spurs at the time was hearing this and said, "Oh, Rogers says he's going to get out of it, ay? I'll fix him." So this is all lined up for a great battle of the giants when Ted went down to see him.

ROGERS: To have breakfast.

LIND: Well, Ted just had one more thought. He said, "I've got an idea." So he said, "You go up there, you go up to his office." And Ted was on the phone and then about half an hour later he arrives to meet Angelo Drosis and I don't know what you said exactly, but you said, "You know, Angelo, I know that you're a tough bargainer and I've got something for you. I've got something for you!" And the door opens and in walk these guards with a million dollars in paper money.

ROGERS: Five dollar bills. See, we owed them and they never paid him and that was another huge argument. So I thought the way to start a relationship with him is to not just give him a million dollars but to...

LIND: But really give him the million dollars.

ROGERS: And the deal was that they were in great weighty sacks and they were to load them up on his desk and then leave and then of course he says, "Wait a minute, wait a minute! How do I get to use my desk?" He told that story all the rest of his life.

LIND: The number one picture on the wall, on his "me" wall, was he and Ted with this million dollars in five dollar bills all over everywhere.

ROGERS: We amended the contract and reached an agreement.

LIND: No, he amended it and he gave us what we wanted and he swore that he wouldn't do that. I mean, he made the contract livable after that.

ROGERS: But you know, when we had to sell, when we sold – we didn't have to sell – but when we sold, you know you negotiate with people that are going to buy it and we negotiated in the case of San Antonio a flat amount. In other words, we'll sell you this system for x amount, but at the last minute they came back and said, "Well, what if you don't have the number of subscribers that you said you would have? What happens if you lose 10,000 subs or something? We want to have a formula so we don't pay you as much." We resisted that and said, "No, no, a deal's a deal and we're not going to change it." But finally, after intense pressure, I said, "Well, will you make it reciprocal?" He said, "Of course I'll make it reciprocal if you get more subs." So I said, "Okay." So we amended the agreement and then we went out and hired a fellow who was an extraordinarily popular Hispanic and he did our ads. And the ad said something like, "Rogers Cable: Tremendous, tremendous service and a tremendous bargain. In fact, if you subscribe today, if you call right now, there will be no installation fee and if we don't install it within four hours, we'll give you a $100 cash."

LIND: No, in groceries.

ROGERS: In groceries, that's right. Groceries. So anyway, thousands and thousands of new orders came in and isn't it strange, we were so incompetent that nobody got installed on time, and so...

LIND: But we were after subscribers.

ROGERS: Right. So then the owners, who didn't seem to have a sense of humor, were furious because I think there were 28,000 extra subs at $2,800 bucks a piece and they knew that it cost us $100. So they were so mad they cancelled the closing dinner. I mean, can you imagine?

COLE: Poor sports.

ROGERS: I didn't start it. I wanted to just have what we agreed in the first place.

COLE: Well, I know the story of Rogers doesn't end with cable. You are still big in television and you have moved in in a big way to professional sports.

ROGERS: Well, Phil will tell you about that because what we have is, years ago... I've got to tell a story. Years ago, Lind got us into this pay-per-view business in hotels and this was to be a great business and a future – pay-per-view and all sorts of things. What he forgot about was that sometimes, you see, there is a light cord there that is plugged into the socket and what happens in a hotel is that the counter for the service sometimes gets kicked out and so everybody gets free movies, right? So we called this business, because it had a certain degree of consistency in losses, we called it the "Lind Lemon". Very unfair, very unfair because we soon hardwired it in and it made a lot of money, so...

LIND: But then they didn't call it the "Lind Lemon". That was a genius idea; that was a perfectly ingenious idea.

ROGERS: And now we have a new "Lind Lemon". Would you like to tell them what you...

LIND: It's the Bluejays.

ROGERS: Oh, you go ahead.

LIND: The Toronto Bluejays and it's the next "Lind Lemon" at the moment.

COLE: At the moment, at the moment.

LIND: At the moment it's a lemon, but over time and if we get the Sports Net work that we can use it on, you know to use the three hours a night times 160 games, it will be a brilliant acquisition because really sports teams now have to be owned, or most of them are owned, by media companies.

COLE: In the U.S. and everywhere.

LIND: They have to be owned that way.

COLE: Even in Europe now.

ROGERS: We think, although in the short-term, we're kidding here, in the short-term there will be significant losses. We have a problem that the income is in Canadian dollars, people attending the games and the costs of the players are in U.S. dollars.

COLE: That is the problem.

ROGERS: And the Canadian dollar doesn't deserve to be called a dollar anymore, it's a peso, and so there are serious problems, but putting together a situation where you've got the sports team, you've got your large cable group, your large wireless group, your media group, it just makes all the sense in the world if you get off a plane in Philadelphia, you'll go by and you'll see Comcast...

COLE: Well, it seems to me that all of the great strategic planners are looking at it just like that now.

ROGERS: I'll tell you one reason why. You've heard of the new technology, there's two of them, there are two of these boxes that have a hard drive and can record many hours of television.

LIND: Like TIVO.

ROGERS: TIVO, and when they do that they can delete the commercials. So what is the value of ordinary programming if the commercials are deleted? What is the value to the broadcaster? It gets smaller and smaller. There is one kind of programming that will not be effected and that's live programming and when you think about it, sports and live news are the type. You're not going to be recording a sports event and watching it the next day because you know what the results are. So that's going to be live; you are going to see the commercials. So, we think that sports franchises will become more and more valuable and be quite unique assets.

COLE: I think you have a lot of company in that concept with your colleagues south of the border here. It seems to be a direction that many people are heading in. Big companies, and even some smaller ones. And it's happening in Europe.

ROGERS: It's not all wonderful. I mean, there are issues and problems, but what it will do is, especially here, we bought it, it was owned by people in Belgium, and the owners weren't here. So I think the city feels that Rogers has restored local ownership and we get a lot of people who thank us for that and I think they'll give us a nod on our cable and wireless products. It's just another factor. I must say, I'm told that it hasn't been run as well as it might have. Even the food concessions, the food's not very good and it's too expensive. We want to surprise and delight our patrons. We want them to come and enjoy the night, feel that they're not ripped off on pricing, they've got good value and they're surprised and delighted. And they say, "You know, it was good of Rogers to restore local control here and they're giving us good value." So it's another reason to stay with Rogers Cable or Rogers AT&T Wireless. And likewise, we think that those businesses with the millions of customers they have, we can promote the Blue Jays and sell an awful lot of tickets. We've got a field over there that's what? 50,000 it can hold, they only sell half. That's the bad news. What's the good news? They only sell half.

COLE: So you've got a good upside.

ROGERS: We've got a good upside. And even if you literally give away the top seats for five bucks, now people start to see the field filled, they see it on television and they say, "Those guys from Rogers are miracle workers!"

COLE: And it becomes a much greater attraction and can build the fan base.

ROGERS: Yeah. We've got a great guy running it too, Paul Godfrey. He's Mr. Toronto and an outstanding individual.

COLE: This opportunity has been a special pleasure for me to sit down with two of the titans in an industry that we all three have come to love so much and I would like to ask each of you to sum up your feelings and attitudes about your life in the industry and if you want to say anything about the future that you see down the road, I know that people would be pleased to hear it.

LIND: Well, I think looking back first, two things come to mind. One, is the type of individuals that we've been fortunate enough to attract over the years have been wonderful, wonderful people to work with. I think the second thing is the type of person generally in the cable industry and in the regulatory side has been very, very interesting, in the States, especially. The type of people in the cable industry and peripherally, like Terry McGuirk and Ted Turner and all these people have been so marvelous. I mean, they're very, very fabulous individuals and they've been marvelous to work with over the years. I think the second thing is the cable industry itself. It sounds sort of corny, but it is a really fascinating, fabulous field because it is so ubiquitous. I mean, it has everything. It has entertainment, it has sports, politics, everything that we're interested in it has and so everyday has been a joy to be at work. And everyday in the cable business is fantastic as far as I'm concerned. Now where does it go in the future? More of the same. I mean, we haven't begun to fight the kinds of battles that are going to be in cable. I mean cable can offer so much to so many people. We're sort of at phase 2 of a five phase deal, I think. We're at the bottom steps of what we can offer and you can offer us by interacting back to us. The future is huge. No doubt.

ROGERS: Well, I agree. And I think it's useful for some of the people who may see this tape, they'll be younger and they won't appreciate that when we started television was mostly, what I'll say, homogenized. You had a number of television stations over the air and they put on news and sports and movies and different things at different hours and there was no such thing as a channel really just doing one thing. The reason for that was there wasn't enough channels over-the-air. Channels were very restricted and so the real hope for wired broadband cable is to be able to offer a whole lot more channels than would be available through the air and that made possible a revolution in programming. The thought that if you like golf, you can watch golf at any time of your choice. Now people will say, "Well, you don't want to watch golf all the time." Actually some do, but you want to be able to watch the programming of your choice when you want it and that's what cable is all about. That's really what's driven cable to be able to start to have specialized programming channels where people can tune in at any time. My wife likes game shows - so it's unbelievable – she can actually watch a game show 24 hours a day. Someone else enjoys news, which I do, so you've got a number of choices. So that's really what cable has done. It's a revolution. Now I think that's going to continue and the next stage of it is going to be not just that you tune into a golf channel or a sports channel or a news channel or a music channel, a jazz channel, but that you can pull out specific programs at the time of your choice and that's where interactivity comes in and that's where we move into so much more software involvement with our cable, with our broadband cable. And then you get into a new world, which is data and digital, which is where the world is going and we've got this large pipe and we now can put high-speed modem service on it. Hundreds and hundreds of thousands of Rogers customers are already on that service. So we're on the same pipe, but now on a fraction of the pipe we're starting to put down the high-speed Internet service and soon we will have local telephony sharing that base and also the digital. So you will have it all going together. Now this is incredible, this is incredible, but it's part of the trend, moving from homogenized provision of programming to a very specialized. Now, we'll be able to pull it out video wise or even Internet wise. I think it's terribly exciting. What I've enjoyed, and maybe if we were in the cement business or the car business or something else, we could say the same thing, but I don't think so, listening to other people. This is a North American business and we've been privileged to be a part of it. Everybody, I guess, says that, but I really mean it. We were there at the very beginning. I mean, you know a person like John Malone for 30 years. The man is first of all, I think, a genius; he's a thoughtful man. He's a man who has no airs, who will sit and talk with a person who's climbing the pole or talk to the Vice-President.

LIND: Bud Hostetter, the same.

ROGERS: These are unique people that you consider your friends.

COLE: I think you could say, and I have often said, that it is quite a fraternity.

ROGERS: It is. It's a family, a fraternity, a family. And somebody like Dolan, who has matched the engineering brilliance and the programming acumen – I think he is a unique person. But the Roberts family are unique in different respects.

COLE: The Gene Schneiders.

ROGERS: That's right.

COLE: There are so many people that you're so proud to call your friends and your colleagues.

ROGERS: And you can call them. I enjoy saying, when I'm with Ralph and Brian, I enjoy saying about their company that Brian, in my opinion, could have got the job as President of Comcast even if his last name was Rogers.

LAUGHTER

ROGERS: So what it's meant to my life, it's brought a lot of chuckles, a lot of happiness and I don't think it's over. I know the number of businesses are getting smaller and people are retiring, but somehow I think we'll all keep going as long as the good Lord lets us and truly, as I always like to say, the best is yet to come.

COLE: Well, on that note, I think we'll wrap this up and I will try to correct a mistake from the beginning. This is February 15th in the year 2001 and we're in the offices of Rogers Communications in Toronto and it has been a special pleasure for me to talk to these two gentlemen. Thank you.

ROGERS: Thank you very much.

LIND: Thank you.

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  BACK TO ORAL HISTORIES

Robert Lewis

Robert Lewis

Interview Date: Wednesday December 17, 1997
Interview Location: Denver, CO
Interviewer: Jim Keller
Collection: Penn State Collection
Note: Audio only

KELLER: Mr. Lewis is a Cable TV Pioneer and has been in the industry for almost 40 years. I believe the date of his entrance into the industry was 1958 or 1959?

LEWIS: 1958 – April 8th.

KELLER: 1958. Bob is particularly interesting as a basis for history in our industry because he has a combination of very early experiences, and through four decades, also continues to operate at an executive capacity in today's industry. Mr. Lewis also has great experience in very small systems, both as a manager and as an entrepreneur, and in large corporations as a chief executive of many companies. Today he is the managing general partner & CEO of InterMedia Partners (IMP), a partnership, of which TCI and others, are limited partners. Mr. Lewis has consented to give us his views on the industry and we'll start by getting a little bit of background on Mr. Lewis.

Bob, tell us a little bit about yourself.

LEWIS: Well, Jim, when I was attending the University of Oklahoma in Norman, Oklahoma I was working at the local theatre company—had to work to go to school--and I kept hearing about something called community antenna TV that had been started by a subsidiary of the theatre company I worked for, which was Video Independent Theatres. I kept hearing about this thing called community antenna TV and I started checking into it. But Jim, I think I'll digress a little bit here and give you a little bit of my personal background.

I was born in a little place called Mena, Arkansas or close to Mena, Arkansas. I was one of three children. I have a brother and a sister. We moved to Oklahoma when I was about six years old. I went to high school at a little town called Haileyville, which is in the southeast corner of Oklahoma. Then my parents moved to Norman, Oklahoma so I was able to attend the University of Oklahoma. As a matter of fact, while attending the university, that is where I met my wife of 47 years, Norma. We married actually before I finished college. But I did graduate. Also, I got a commission in the ROTC and had to go into the Army for a couple of years and spent that two year period of time down at Ft. Sill, Oklahoma.

But now, go back to my story about theatre work. I was working the theatres and I kept hearing about this community antenna TV. So when I graduated I told the company that I would really love to try to get into that business when I got out of the Army. Of course, having to go spend two years in the Army I didn't know if I would have an opportunity or not. But they told me to be in touch with them, which I did when I got out of the service. They offered me a job in south Texas to manage a couple of theatres and if I would do that for them then they would give me the first opportunity that came along in cable, or at that time, community antenna TV. So I agreed rather reluctantly. I really didn't want to be in the theatre business, but I knew that if that was the way to get into the cable business then it was probably worthwhile. And sure enough, it took about 20 months until an opportunity came along in the cable business. They sent me to the town of Clarksdale, Mississippi which is about 75 miles south of Memphis on the Delta. That was where I got my start. This was in April of 1958. That is my first experience in cable.

So I was sent there as the manager - it was strictly a start-up situation - and I was able to take that little system and get it going. I didn't stay there too long, and that was okay with my family. We weren't too fond of Mississippi. Then I got transferred to Sherman, Texas. That was a little bit larger system and one that was still in the start-up phases. I only got to stay there for a couple of months and they wanted me to go to Hugo, Oklahoma and not only manage the cable company but also manage a couple of theatres. I didn't want to do it, but again, the company pretty well insisted. And by that time having two children I didn't have a lot of choice so I took it.

KELLER: May I interject here, please?

LEWIS: You bet.

KELLER: The company was Vumore?

LEWIS: Yes, it was. They called it Vumore Company and it was a subsidiary of Video Independent Theatres.

KELLER: Okay. Video Independent Theaters?

LEWIS: Right.

KELLER: How many subscribers were in Clarksdale, Mississippi?

LEWIS: I think when I got there, there were about 300.

KELLER: And how many in Sherman, Texas?

LEWIS: Sherman had, if my memory serves me correctly, we had about 1200 to 1500. Boy, that was a long time ago, Jim, but I think that is about right. By the way, I started under a Cable TV Pioneer, Larry Boggs, who was running the Vumore Company at that time. That is when I first met him and got started with him in the business.

KELLER: Was Vumore the subsidiary for only cable television or did Vumore also own theatres?

LEWIS: No. Video Independent Theatres was the parent company and Vumore was a subsidiary and it was strictly for cable operations.

KELLER: When you consider that Video Independent Theatres, was that the name of it?

LEWIS: Uh-huh.

KELLER: It would be one of the first . . . corporations in cable television outside of Jerrold Corporation.

LEWIS: Well, I think so, Jim. They actually started in 1950. That is when Larry Boggs got the idea of building the first cable system and that was in Ardmore, Oklahoma. As you know, the industry basically got started in 1948. But let's face it that was very preliminary. So he started a system in Ardmore, Oklahoma. They also had the theatres in that town—Video Independent Theatres did. He started individually and then he basically brought the theatre company into the ownership of that system and then that was the beginning of Vumore Company.

KELLER: That was going to be my next question. Larry Boggs actually started the system on his own? Then did he sell it to Vumore or did Vumore finance him?

LEWIS: I think they started to finance it. He had some connection with the theatre company there through relatives or whatever, but it was then very shortly after that, I think it was either 1951 or 1952, that Video Independent Theatres actually made it a subsidiary of their company.

KELLER: It would have been interesting to see how he convinced the board of Video Independent Theatres to finance him in that early year.

LEWIS: Well it would have been because frankly it was sort of "competition" to the theatre business if you recall back then.

KELLER: And an entirely unknown business at that date.

LEWIS: Oh, absolutely.

KELLER: But they did put their money into it at that point.

LEWIS: They did. Ardmore sat about a hundred miles south of Oklahoma City and a hundred miles north of Dallas and, therefore, was a perfect community for community antenna TV. They couldn't get any reception to speak of without the cable system.

KELLER: So we have established that Vumore and Video Independent Theatres were some of the very early corporate entities in cable television?

LEWIS: Absolutely.

KELLER: And you were associated with them at this point. We left you in Hugo.

LEWIS: Yes. Hugo, Oklahoma.

KELLER: Well, we digressed a bit.

LEWIS: I went to Hugo reluctantly because it got me back in the theatre business which is, of course, nighttime work. In fact, my work hours there were from about 8:30 in the morning till about 4:00 in the afternoon and then from 6:00 until about 11:00 at night. The hours for "a family man" were not too good. However, as it turned out it was probably one of the best career moves that I could have made because when I went there the company had under 600 subscribers in the cable system. I was there a little less than two years. They had told me that was probably the most that we would ever get out of the system. They didn't think we would get any more subscribers. Well, I left there less than two years and we were over a thousand subscribers.

KELLER: What basic percentage of the community would that have been?

LEWIS: Let's see.

KELLER: Of the homes in the community?

LEWIS: I think there were about 1,800 homes in the community.

KELLER: So you achieved more than 60% penetration?

LEWIS: Yes, that's right. And that was still back at times when people were somewhat reluctant to pay and we were charging a smaller installation fee, and $7.00 a month was sort of the magic number we were using.

KELLER: But you were not charging them big money for installation like they were doing elsewhere - $100-$150?

LEWIS: That's right. By the time I got to Hugo we were charging something like $10 or $15 for the installation plus the $7.00 a month as opposed to many systems that started at $100.

KELLER: That was a departure?

LEWIS: Yes.

KELLER: Yes. That was a departure from what the norm was at that time.

LEWIS: It was. That's definitely true. In fact, the system that I left in Sherman, Texas had done just that. They had charged a large installation fee and smaller monthly fee. But in Hugo it was a pretty poor town and people just wouldn't come up with a $100 bucks. They had already decided to make that change.

KELLER: Well the industry had learned by now. We found that from a marketing standpoint it was much better not to get that big hit up front.

Now how many channels were you carrying in Hugo at that time Bob?

LEWIS: Five channels.

KELLER: Five channels. What equipment were you using?

LEWIS: I think we had primarily Entron.

KELLER: Entron?

LEWIS: Yes. It was a mixture. But I believe that a lot of the amplifiers were the old tube type, of course with the smoke stack boxes.

KELLER: Low band, broadband?

LEWIS: Low band and strictly five channels. Yes, that was it. We were actually microwaving signals from Texas.

KELLER: That's interesting.

LEWIS: We were part of a microwave company that was bringing signals in to Parris, Texas, which was south of us. Then we added a microwave hop into Hugo in order to get three channels there.

KELLER: Was that an independent microwave company or was it AT&T?

LEWIS: No, it was independent. It was kind of a co-op deal that was part of the Parris, Texas system. It was part of Midwest Video out of Little Rock, Arkansas.

KELLER: George Merrill's?

LEWIS: George Merrill, absolutely. So we added a hop from there on up to Hugo when that system was built. I think it was three channels we were bringing them.

KELLER: And that was even before the Carter Mountain Case?

LEWIS: I think so.

KELLER: That came in 1953?

LEWIS: Oh definitely. Yes, definitely. Because I was in Hugo in 1959.

KELLER: So under the revised rules that were about to come, you would have been subject to Federal Communications Commission's (FCC) regulations at that time because you were using microwaves?

LEWIS: Right.

KELLER: But at that time you weren't because they didn't come in with that regulation till sometime later.

LEWIS: That's correct. Other than, of course, the microwave license themselves that we had to have to run the microwave station.

KELLER: You are now in Hugo and you have approximately 1,000 subscribers.

LEWIS: A little over, yes.

KELLER: What happened after that? And Vumore's still moving pretty rapidly? Are they still expanding?

LEWIS: Yes. Vumore had built quite a few systems by that time. Ardmore was a system they had developed from the beginning and it had grown quite a bit.

Well, Larry Boggs gave me a call one day and asked me if I would be interested in moving to Ardmore, Oklahoma. Which I think he knew the answer before he asked me. The deal was that I would become the company's first district manger. I would have Ardmore and manage it, but I would also have Hugo and Sherman, Texas. Those three systems would then be mine in the district. I, of course, immediately said yes and moved there in 1960. Let me think a minute. These dates are hard to remember. I should have jotted some down. I am sorry I didn't take the time to do that. Let's see.

KELLER: It had to be before 1960 because Larry died in '60-'61.

LEWIS: Or '62.

KELLER: Maybe it was early '62.

LEWIS: I got to think back on that date. It may have been '61 when I actually moved to Ardmore from Hugo because I was in Hugo almost two years--about 21 months I think. Anyway, I did go to Ardmore and that system, by that time, was up to 12 channels. I think we had some of the first transistor type amplifiers in that system. It was in the process of being rebuilt to 12 channels. I was manager of that system. Then, as I said, I did look after Sherman and Hugo.

KELLER: So you were rebuilding Ardmore with 12 channels and transistor amplifiers . . transistors only on the--was it the input?

LEWIS: Jim, not being an engineer . . .

KELLER: I am not either, as you know. I remember the first transistors were AMECO amplifiers, right? They were the developers.

LEWIS: Yes. I think that's what we were putting in there. We were converting that to a 12 channel system. There again, we had microwave coming from Dallas and Oklahoma City to serve that system. We added the Oklahoma City channels after I got there because we couldn't get the reception even off of a 400 hundred foot tower. It was still difficult to get decent reception. We had a lot of experience with microwaving. In fact, we put in, one of the—probably not the first—but one of the first CARS band microwave systems to bring in the Oklahoma City channels to Ardmore. We actually used Jerrold equipment on that. I remember that one for sure.

KELLER: You owned that hop then?

LEWIS: Yes. It was a CARS band owned by the system. The other was a common carrier coming up from the south from Dallas. It was a common carrier system.

KELLER: So we are still in the early '60s and probably around 1960 or '61 you were in Ardmore. How many subscribers did Ardmore have?

LEWIS: Ardmore at that time I think had about 5,000.

KELLER: And Vumore in its entirety?

LEWIS: Oh, Jim, I am not sure. I think something over the 50,000 mark maybe.

KELLER: It had that many subscribers at that point?

LEWIS: It could have been 40,000. But they had a number of systems out in the western part of Oklahoma. Some other Texas systems were being built--had been built. I think we were at about that number at that time. It is very difficult to recall.

KELLER: Did Vumore have the systems out in the Panhandle of Oklahoma?

LEWIS: No. We didn't have the Panhandle. We didn't have Guymon, for instance.

KELLER: You had Bartlesville?

LEWIS: Yes.

KELLER: I want to go into that a little more in detail when we get to that point.

LEWIS: Okay. Actually it wasn't a cable system as you probably remember. It was a movie system. But we'll go into that a little later

.

KELLER: Yes. I do want to go into that in detail.

LEWIS: I was not directly involved in it. They had systems in Altus, Hobart, and Mangum, Oklahoma; a bunch of systems in the western part of Oklahoma. While I was in Ardmore we expanded a great deal and built systems. For instance, we built a system in Ponca City, Oklahoma, in which we were partners with two of the television stations out of Tulsa, and that was under my responsibility at that time. What happened is, as the company grew then my territory grew. I kept adding systems to my division and in about 1968 - again I am not positive of that date - I was named the regional vice president for the company. We sort of divided the company into five regions at that time. I ended up having most of Oklahoma, not quite all, but most of Oklahoma, then the systems that were in Kansas and Texas. I ended up with about 20 systems. I still headquartered there in Ardmore although I had, by that time, named a manager in Ardmore. I just officed there and worked out of there.

KELLER: That's interesting. I wasn't aware that Vumore was in partnership with the Tulsa television stations.

LEWIS: We were . . .

KELLER: Within their grade "B" contour?

LEWIS: They were just outside. Ponca City was just outside. They were able to keep it for quite a number of years. They didn't have to divest it. But it was channel KVOO and KWTV, two stations out of Tulsa that were our partners there. Ponca City turned out to be an excellent system. It used Anaconda cable and amplifiers which was one of the first to do that. They had some problems with it but it did work. Also Jim, not too long after that we made a deal in Amarillo, Texas and brought in two of the three broadcasters there as our partners. We got the franchise and built Amarillo, Texas. I still stayed in Ardmore, Oklahoma but I was responsible for the construction and building of Amarillo.

KELLER: Who's idea was it at that point to go into partnerships with the television stations?

LEWIS: I think by that time Bob Clark was the president of Vumore Company. That is after Larry Boggs passed away, which we kind of skipped over. We'll go back to it in a little bit. But anyway, I think the idea was number one - that we still were not blessed with a lot of money and so you needed some help; but also to get the franchise. In that case now, of course, those were the systems sitting right in the community and we still didn't have the cross ownership rule at that point in time. So they were able to be part owners of that system. We were responsible for building it and managing it. Amarillo became a very successful system. It's owned by TCA now.

KELLER: Did your partners who were the local television station(s) allow you to import the network stations that they were carrying from Dallas or Oklahoma City or elsewhere?

LEWIS: No. We didn't import networks. Did we import the independent stations out of Dallas-Ft. Worth? There was an independent station. I forgot the number, channel 11 or something like that. I think there was another independent in Lubbock.

KELLER: In any event you were not importing network stations or going in direct competition with them, but you were importing independents to give them decent programming?

LEWIS: That's right. And then started running movie channels, I think HBO, as soon as it was on the satellite.

KELLER: That didn't come in until '71 or '72.

LEWIS: That's right. Those were obviously landed later. Those were the two systems that I had that I really started totally from scratch--Ponca City, Oklahoma and Amarillo, Texas.

KELLER: Now, was Vumore - I am really interested in this thing - was Vumore in partnership with any other television stations within your area of responsibility at that time.

LEWIS: No. And I don't think they were any place else that I can recall.

KELLER: That is really interesting because in most other sections of the country they were at each others throats.

LEWIS: Yes.

KELLER: Both back east and elsewhere.

LEWIS: We tried to do the same thing in Tulsa. We didn't get the franchise. Gene Schneider did . . . . . . but we tried to. We partnered with the same stations that were partners in Ponca City. They joined with us to try to get the franchise in Tulsa and it didn't work. That was the only other place that I am aware of that we actually partnered with the local TV stations and tried to get the franchise.

KELLER: There had been other partnerships and there has been other ownership's by local stations. Grand Junction is an example, and some of the other places, of course, Austin, Texas.

LEWIS: Yes.

KELLER: That is interesting that you were able to do that. As long as we're on the subject of television stations, were there any areas up to this time where you were having difficulty with the television stations?

LEWIS: Yes. In Ardmore, Oklahoma. We were bringing in the stations from Oklahoma City and Dallas - network stations. There was a local station assigned to Ardmore and Sherman, Texas. It was a two city market. It was really the same market but the station was assigned basically to the two markets. We had a lot of trouble on non-duplication. We fought that battle forever. Also then, the station out of Ada, Oklahoma, which barely put a grade B in Ardmore--I mean barely. And the reception was such that it really didn't do a very good job. They also made us non-duplicate their programming which was ABC. The Ardmore station was NBC. So we had non-duplication running out our ears and we were never able to overcome that at least for the time I was there.

KELLER: That didn't occur until after the Second Report and Order?

LEWIS: That's right.

KELLER: And that's in '66 was it, '65 - '66? It's before the freeze and that was in '68.

LEWIS: Yes.

KELLER: The reason I say that is because I am looking at some of these dates here.

LEWIS: Yes . . . . . . you're one up on me. That is right. I was thinking it had to be the late '60s.

KELLER: Because then they took advantage of the non-duplication after that.

LEWIS: Oh, absolutely. Of course, at that time we didn't have sophisticated non-duplication equipment. You had clocks that had pins in it. It was really a nightmare. Finally, one of my engineers though did manage to hook up some kind of a system where you could change channels by telephone. By calling in and pushing buttons you could change channels. At least that saved some trouble.

I had the unfortunate pleasure of living very close to our tower. So guess who got to go to the tower when something didn't happen--set the clock or whatever?

KELLER: Brings back a lot of memories.

LEWIS: Yes. It was a nightmare. But you know we had to live with it and we still survived.

KELLER: You're now a regional vice president of Vumore and have most of Oklahoma, parts of northern Texas, and southern Kansas at this point. Was there anything else in Kansas?

LEWIS: Actually it was everything we had in Kansas.

KELLER: Were you experiencing at that time—we're still back in the middle to early '60s . . .

LEWIS: Middle to late '60s.

KELLER: Okay. Were you having any difficulty with the telephone companies?

LEWIS: Over pole contracts?

KELLER: No, including pole contracts.

LEWIS: Yes. Pole contracts we did have a lot of trouble, and power companies for that matter. I remember the little system that we started to build. We bought out a fellow named Jim Monroe, who is still in the industry, in Idabelle, Oklahoma. He couldn't get contracts. So he starts setting his own poles. When we bought him out, and he remained as the manger of building that system, we set our own poles and did the whole community with our own poles. It was a little unusual. That happened, of course, in some other systems. But we had trouble with pole contracts in many situations. I don't think we had any other kind of problems with phone companies, just the poles.

KELLER: That was settled by the FCC or by court rule, wasn't it?

LEWIS: Yes, it was a court rule. They had to give permission. You know, we mentioned Larry Boggs. Can we go back to that?

KELLER: Yes, please.

LEWIS: Larry was a great guy and I clearly enjoyed working for him and certainly felt like he was responsible for getting me into the business and then tutoring me along the way for at least awhile. Jim, I am sorry but I can't remember the year he moved to Denver and went to work for Bill Daniels.

KELLER: It almost had to be '61.

LEWIS: It may well have been. If not, in '62. Anyway, he did resign from Vumore and moved to Denver and went to work for Bill Daniels. I'll never forget the day he flew down to Ardmore to tell me what he was going to do. We were sitting in a restaurant having a cup of coffee and he said, "Well I am going to do this. I just think it's the thing to do." He said, "But you know there is something wrong with me and the doctor just can't seem to figure it out." Sure enough, Jim, it must not have been eight months or less than a year after he moved to Denver, that he died of cancer. It might have been a year. I am not sure. It wasn't terribly long.

KELLER: I joined Daniels in early '61. He was just coming aboard as I remember and died very shortly after.

LEWIS: It wasn't very long. Less than a year.

KELLER: I am not even sure he had moved to Denver at that point in time.

LEWIS: Might not have.

KELLER: But he wasn't around there very long. That's true.

LEWIS: He was a great guy. One of the awards that is still given by NCTA, although not now named for him, started out as the Larry Boggs award. He was a true pioneer, he really was. He obtained a lot of franchises and responsible for building an awful lot of systems that Vumore owned. By the way, when did Vumore become Cablecom-General? When did RKO General enter the picture?

KELLER: Well that's going to be a question I have.

LEWIS: We need to get into that.

KELLER: I want to get into that. Before you do that there is an interesting aspect of this whole thing - how the early franchises in all of these smaller towns were acquired?

LEWIS: We didn't do too much of the "rent a citizen" deal back in the early days. I didn't have a great deal to do with getting the franchises in many of the systems. I did in the case of Ponca City and Amarillo. In those smaller communities, generally speaking, people were pretty anxious to have better television reception. However, . . .

END OF TAPE 1, SIDE A

BEGINNING OF TAPE 1, SIDE B

LEWIS: Digressing a little bit if I may here concerning Larry Boggs. When I got asked to move to Ardmore and become the first district manager for Vumore Company it was really right after the owner of Video Independent Theatres—it was not a public company it was independently owned—Henry Griffing had been killed in an airplane crash. He and his family. It was about a year after that that the company actually was sold to RKO General. That happened in about early '61. They didn't change the name until we decided to take the company public and that is when the name was changed from Vumore Company to Cablecom General.

KELLER: This was owned by the General Tire Company?

LEWIS: It was actually owned through their subsidiary RKO General, and that was owned by General Tire and Rubber Company.

KELLER: RKO General, was that a theatre company?

LEWIS: Primarily they had become a television company. They didn't own theatre operations themselves other than when they bought Video Independent Theatres. But they owned the RKO studio, all the films.

KELLER: They were a production company?

LEWIS: No. They had bought the films and everything from Howard Hughes, as a matter of fact. They owned the old Republic Studios films so they changed it to RKO. They may have been in the production business some but by that time they had bought the library primarily.

KELLER: So now Vumore was sold to RKO General?

LEWIS: Right.

KELLER: Was this before or after the Bartlesville experience?

LEWIS: This was after. Bartlesville came somewhere in the '60s. I believe it was called Tele-movies. That's what they called the experiment. They built basically a cable system in Bartlesville but didn't build it for the purpose of the community antenna system. Which I personally have never been able to understand because Bartlesville was far enough away from Tulsa that they could improve the reception and then they could have brought some Oklahoma City stations in as well which they didn't receive off air. Anyway, what they did was to make it basically a two channel movie service. It had movie machines running and sending it out over the cable, and they tried to sell people on home subscription to movies. It was just before its time. It was before HBO. I mean they really were before their time. Of course, it was a little bit crude in the way it had to be done. Still it worked but they couldn't get enough subscribers so it was eventually closed down.

KELLER: So, in fact the theatre and the projection equipment were basically the headend.

LEWIS: That's right. They did it just like you would be doing it in a movie theatre. That's basically what they were doing.

KELLER: When that failed did Vumore then convert it into a cable system?

LEWIS: They did not. For the life of me, as I have said, I have never really understood it. I was not at that time in anyway connected with it. I was not involved in that experiment. I never really got a real answer as to why they didn't convert it to a cable system. I don't know why.

KELLER: Bartlesville then was built some time later but was not built by Vumore?

LEWIS: By Vumore or Cablecom General. No. It was not. In fact, what is it the Reynolds . . .

KELLER: The newspaper company.

LEWIS: Yes. Newspaper company ended up . . . It may have been that at the time they got permission to do the movie experiment, it may have been the city just did not or would not grant them a franchise for cable or television.

I started to go back awhile ago, and I know were jumping around an awful lot, but I want to get this one in. When I got out of the army and they said "Would you manage those theatres down in south Texas?" It was the little town of Cuero, Texas which lies to the southeast of San Antonio about 85 miles and just a little north of Victoria, Texas. When I got there I put up an antenna and tried to get TV reception. Well, you couldn't get any reception hardly at all. We applied and tried to get a franchise Cuero, Texas, I can't believe some of the stories that came out. The city kept saying "Well, you know if you put this in you're liable to interfere with the reception for everybody else." Engineers came in and told them no. They said, "Yes, you put up that big 400 foot tower you'll suck all the signals out of the air." You've heard that story before haven't you?

KELLER: . . . Yes.

LEWIS: We got turned down. It just made me so mad I didn't know what to do. Shortly after that I did get my chance to go to Clarksdale, Mississippi and get into the cable business, but we could not get a franchise there. That town sat there until the '70s without a cable system. The LBJ Company got the franchise and built it later.

KELLER: There were many communities that refused to grant franchises based on that same assumption.

LEWIS: I guess the story got around.

KELLER: Well, the antenna manufactures and the television stations all jumped on that at one time.

LEWIS: I thought that was so funny.

KELLER: We are at the point now where RKO General and Cablecom General bought out Vumore after Mr. Griffing's death?

LEWIS: Right.

KELLER: Spell Griffing would you please.

LEWIS: G-r-i-f-f-i-n-g. Henry Griffing. Unfortunately, he had learned to fly. Larry Boggs, of course, was a pilot too. Anyway, Henry Griffing flew a private plane back to New York to pick up his wife and two children and fly them back to Oklahoma City. They crashed in the mountains of Pennsylvania on the way back and killed all of them. The only heirs were his brother and his son and they decided they didn't want to operate the company. That is why RKO then entered the picture and bought the company.

KELLER: That was a giant step for a major company to come in and buy cable television at that point.

LEWIS: It was. It was definitely that. Unfortunately, while they did it they never seemed to really realize what they had bought in getting the Vumore cable company. Over the years of their ownership they really never supported cable like we had hoped they would.

KELLER: You think they were primarily interested in the theatres as opposed to cable?

LEWIS: That was difficult to understand. I guess that's really where their greatest interest was. And, of course, the theatres were still making pretty good money at that time, no doubt. I am sure they wanted to see about this cable thing. They were interested in it. At least RKO at that time was primarily a broadcaster, they were not as supportive of cable. They kept thinking, "Well it may not be here in a few years it may go away." I know we got that impression from some of the people from RKO General.

KELLER: So you stayed on then as a vice president of now Cablecom General?

LEWIS: As I said, they didn't change the name until we went public in the '60s.

KELLER: Late '60s?

LEWIS: Yes. It was in the late 60's. It remained Vumore for quite some time. Then it became Cablecom General and became a public company with RKO retaining about 80% of the stock.

KELLER: So when you went public you were well over 50,000 subscribers?

LEWIS: By that time we were close to a 100,000 if not more.

KELLER: How many systems at that point? Roughly.

LEWIS: Probably around 30 to 35 systems at that time, but growing. We grew to about 40 some odd systems before I left the company.

KELLER: These were primarily what we refer to today as classic markets?

LEWIS: Yes. They basically were. I guess Amarillo would have been one of the most non-classic because they did have the three network stations there in the city. I would say it was not a classic system.

KELLER: Go into that, Bob. I think this is an interesting aspect that is often lost. Would you agree that in the early days both from an entrepreneur standpoint and from a financing standpoint that if a city had all three networks it was very difficult in the minds of most people to build a system and almost impossible to finance. Would that be true?

LEWIS: Absolutely. In the very early days, even one television station made the early pioneers of this industry a little skeptical.

KELLER: But by the '60s, though, if there were three stations in the market you pretty much . . .

LEWIS: It was tough. And Amarillo didn't take off like gangbusters. We had to really fight for the subscribers. As I said, we brought in independent stations and educational stations that they didn't have and started doing some local programming which was pretty primitive at the time.

KELLER: Was that before we were mandated to do local programming?

LEWIS: Yes, it was before we were mandated to do it. Until they started getting satellite reception I would not say that Amarillo was a raging success. It was paying its way but it wasn't a success until satellite reception with HBO, channel 17, Turner station, and all those things started becoming available.

KELLER: You stayed with Cablecom General?

LEWIS: Yes.

KELLER: The companies gone public with a successful initial offering, and you said at this point that Cablecom really didn't appreciate what they had in the cable business.

LEWIS: I don't want to be unfair to RKO General about that. What I really mean by that is it was at the point where franchises were turned down because we didn't have any financing. Even RKO did not support the financing. We basically had to do our own financing within the company, Vumore. Vumore going public helped. That got us some money to build some systems and so forth. But there still was not full support from RKO General. They did introduce us to bankers which helped some but as far as guaranteeing loans and that type of thing, they did not. They didn't put any of their own money into the company except for the purchase of the company itself. We were pretty much on our own.

I can remember Larry Boggs telling about how he could have gotten the franchise in one of the Mississippi towns that later became a pretty big system, at least by the standards then. Can't remember what it was.

KELLER: My guess would have been Baton Rouge.

LEWIS: Well, I don't think that was it. It wasn't. It was Greenville or something. It became a pretty successful system. He had to turn it down because he didn't have any money, and thus, couldn't build it. There were other examples of that. But, I guess going public was certainly a positive and that was done under RKO General.

KELLER: They still retained a majority of the stock?

LEWIS: They did, definitely. I think only 20% was sold to the general public. I stayed in Ardmore, Oklahoma for twelve years. My area kept growing because we either purchased or built systems, for the most part, we built systems.

We had another television station partner - Lufkin, Texas. We were partners with the television station there as well as the Buford's out of Tyler. They were our partners. In fact, I later bought them out of that partnership and it became wholly owned by Cablecom General. But that was another connection with the television stations.

KELLER: You used the term earlier in our discussion of "rent-a-citizen. That became an nefarious term in the later franchising efforts. Companies would go in and get influential local citizens and give them a piece of the action for systems. So you didn't go for individual citizens you went for local media companies.

We're now at the point where Cablecom is a public company and your still continuing to build but not at the rate that you would like to. Bob Clark is now the president of Cablecom General and you're still operating vice president based in Ardmore. The next question that comes to mind in relation to Cablecom General is Colorado Springs.

LEWIS: That's about the next step here. Through Bob Clark having association with Daniels they went to Colorado Springs and managed to get the franchise there. Shortly after that Bob Clark decided to move the Cablecom General headquarters from Oklahoma City to Colorado Springs. And you know by the way, I don't think we were a public company yet. I think it was still Vumore because the name in Colorado Springs was Vumore Video. We were not a public company when that move took place. When they got the franchise in Colorado Springs it was a joint venture with Bill Daniels company and Vumore Company and I think maybe some locals. I am not sure.

KELLER: This had to be after '66. I think it was '67 or '68.

LEWIS: Right. So they got the franchise to build a system in Colorado Springs. Even Bill would admit today that it wasn't a good franchise. Had a lot of problems there.

KELLER: There were two things that he had, as I remember, that he had to offer to get the franchise. It became nefarious in the industry. One was total underground the other one was a relatively large franchise fee.

LEWIS: And I can't remember that percentage, Jim. Can you?

KELLER: Yes, I can.

LEWIS: Okay. What was it?

KELLER: Twenty-five percent.

LEWIS: That I didn't remember exactly. I knew it was way up there but I had forgotten what it was.

KELLER: Of course, that was subsequently thrown out when the FCC set a cap on the franchise fees. It has infamous notoriety within the cable television industry at that point to offer those two things. Probably started the demands that cities were going to make on companies coming in requesting cable franchises.

LEWIS: Obviously it had to spread from there to some degree. I think that is correct.

KELLER: I remember it was the first one that really demanded concessions.

LEWIS: It was evidently very, very tough. Bob Clark felt that it was so important—that system was—that he decided to move the corporate headquarters from Oklahoma City (not for the theaters because he wasn't running the theatres - Vumore was being run separately) to Colorado Springs. Bob Clark was on the scene there and moved a lot of his corporate staff, not that it was that large at that time, to Colorado Springs to be there were that system was being built. In all honesty the system was not a success because of the underground and huge cost. Also, a lot of bells and whistles. It had a big origination studio, a lot of things like that. Today it is a good system. Back then it was a drain rather than a money maker. That's for sure.

KELLER: It almost bankrupted Cablecom General at that time?

LEWIS: I don't know that it did that. It certainly didn't help. Again, I was not responsible for the system and was not in on what was really going on there -just what we would hear through reports and through my talks with Bob Clark from time to time. He didn't stay in Colorado Springs to long. He found that travel out of Colorado Springs wasn't the easiest at that time. So he moved the corporate headquarters to Denver. Again, I think that must have been in 1969 early '70 maybe. Because I came to Denver in 1971 from Ardmore and became the executive vice president of Cablecom General and we had gone public at that time. Anymore about Colorado Springs? I can't tell you a whole lot.

KELLER: That's probably enough. That would be your recollection. Cablecom General had something to do with Baton Rouge. I am a little out of focus as to exactly what it was, but didn't Bob Clark get the franchise there and build it?

LEWIS: It was Bill Daniels. Let me go on with where I came in. In 1971 Bob Clark then asked me to come to Denver and be the executive vice president of Cablecom General, which I, of course, accepted and moved here. Eight months later Bob Clark left the company and went with Daniels. It was because they had gotten the franchise in Baton Rouge - at least that was part of it - and Bob actually moved to Baton Rouge and was the general manger of that system. Which was kind of strange in some respects, but he had always kind of wanted to be involved in the construction of a brand new system. He did that and probably had some ownership with Daniels in the system. But, that's where he went.

KELLER: But Cablecom was not involved?

LEWIS: Cablecom was not involved in Baton Rouge. When he left Cablecom General, RKO asked me to take his place as president of Cablecom General. I had only been in Denver for eight months so it was kind of a shock in a lot of ways. But I agreed and that was in 1971. At that time we had about 150,000 subscribers. We were operating about forty-six systems altogether. We had by that time also built Modesto and Santa Rosa, California and Topeka, Kansas, during that period. Topeka was probably just getting started by the time I came to Denver. These were fair sized cities.

KELLER: By this time you were able to import a number of signals as long as you didn't duplicate. And by 1971, HBO is on.

LEWIS: Yes, HBO came along which helped a great deal. Going back to Amarillo, that certainly helped as far as the system there was concerned. When did Turner come on? In '74?

KELLER: I don't remember. Something like that.

LEWIS: Which was another big boost, of course, to the industry by being able to get his signal. That brings us up to the time that I then became president of Cablecom General. That is where I got the full taste that RKO General was not as supportive of the company as I thought they would be. It was very difficult to get enough financing to do everything that we wanted to do. But, we operated and we were doing pretty well making good cash flow except in Colorado Springs. That, then, did become my problem.

KELLER: It was a drain on cash flow.

LEWIS: It was a big drain on the cash flow. I don't know how much of this you want to get into. Bill Daniels came to me one day and said "Look, I will buy Colorado Springs. I still believe in it. I would like to buy it." Rather a long story short, we basically had a hand shake deal. By that time RKO had decided to bring a chairman in to Cablecom General. His name was Richard "Dick" Forsling who had been at CBS at one time. He was involved somewhat with the CBS cable operations.

I had made a deal with Bill Daniels at a price which certainly could put us in pretty good stead, and I got vetoed on that deal by Mr. Forsling and Mr. Poor, who was chairman and president of RKO General. Mr. Forsling decided that we could turn that thing around and we could make it fly. He brought in another operating guy. He gave it a try for one year and wound up selling the system to Leonard Tow and Time Warner, which was then ATC, as a combination for 3.25 million dollars--less than I had it sold to Bill Daniels for the year before.

Well that was beginning of the end as far as I was concerned with RKO General and General Tire. We sat down and agreed to disagree in '75 and I left the company. They made a big, big mistake. It really was draining our cash flow and selling it to Daniels would have been the best thing we could have done for our company. I felt terrible. Bill never blamed me because he knew I was willing to go forward with it and RKO just would not agree.

KELLER: It was sold to Leonard Tow and ATC at that time and it was at that time that the industry started to turn around in the major markets.

LEWIS: That's right, although it took a few years.

KELLER: That's your point. But it was that interim period where it was a major drain on your company at that point.

LEWIS: It was keeping us from being able to build extensions in systems. We couldn't go for franchises because we didn't have enough money to build them. So we weren't even trying at that time to get any more franchises.

KELLER: It is interesting that it went to that combination of people because I know from experience that Monty Rifkin was not particularly interested in going into major markets at that time.

LEWIS: I think Leonard was the catalyst there. As Leonard Tow will admit, I got him in the business. His first purchase was some systems in southern California where RKO owned a television station. Because of their ownership of Cablecom General they had to sell the systems that were located in southern California.

KELLER: This was after the cross-ownership rule was adapted?

LEWIS: Yes, this was after the cross-ownership rules. We were basically forced to sell. They had KHJ in Los Angeles. We had systems in Brea, La Habra, and Yorba Linda; three small systems in the Los Angeles market area that we had built. We had to sell three northern California systems at the same time because they were in the same partnership. We did have a partner in those systems that Bob Clark had put together earlier. They were Albany, Benicia and San Pablo. There were those six systems in southern and northern California. We sold them to Leonard Tow. That is how he started his company, Century Communications. Then later, he bought the Colorado Springs system in conjunction with ATC.

KELLER: Is it still under that ownership today?

LEWIS: No, Time Warner traded their interest to Century for another property.

KELLER: Time Warner and Leonard Tow. Then you agreed to disagree with Cablecom General. What did you do then?

LEWIS: I tried to get into business for myself. Again, the banks weren't very kind to the industry at that time. I did a little consulting work during that interim period of time. Looked at several systems for purchase. I had gotten to known Glenn Jones, not very well at the time, but he had been involved with Daniels and they had obtained a lot of franchises in the metro Denver area. The old Mountain States Video Company which Vumore, or rather Cablecom General, had an interest in along with Daniels. The systems had not been built.

Anyway, that is how Glenn Jones had sort of gotten involved in the industry. Then he started Jones Intercable. He kept talking to me and one day he just said "Bob, I want you to come on board." I told him he couldn't afford me even though I wouldn't demand that much money. I just said "How could you afford me?" The comment from him was "I can't afford not to." He had a great idea, and that, of course, was the limited partnerships. It was a new idea to cable. He had trouble getting brokerage firms to even look at the company for selling the partnerships. He needed somebody on board that really knew cable operations. I think that is really why he wanted me, or certainly somebody like me, to be involved with the company.

After a lot of thought and consideration I felt like Glenn and his brother Neil, who was there raising the money for the partnerships—making that happen—I just felt like it was a pretty good team and decided to join him. I did that in January of 1976. I came on board as president and chief operating officer and a director of the company, which at that time was already public. Stock was very low priced. One of the first things I attempted to do and was successful at was meeting with Boettcher and Company, which was a major regional stock brokerage firm that also sold partnerships, real estate, oil, and things of that nature. We met with them and convinced them within about three months after I joined the company to sell our limited partnerships. That was the beginning of getting a number of regional firms to start selling the partnerships. We started raising a lot of money and started buying quite a few systems.

I started in 1976 and we continued to grow. When I joined Glenn he only had a little over 10,000 subscribers - very small. We grew fairly rapidly after that and started acquiring systems. Our partnerships were public. We had them registered and that was, of course, helpful in getting the partnerships sold by the brokerage firms.

We were able to get a number of regional firms like Foster & Marshall in the northwest and Robinson Humphrey in Atlanta to become retailers for our partnerships. By the time we had those three major brokerage firms selling, we were raising capital rapidly and our acquisitions were numerous. It was a fun time but not only was I looking at system purchases, doing due diligence, etc., I was also running the cable operations.

END OF TAPE 1, SIDE B

BEGINNING OF TAPE 2, SIDE A

KELLER: We've just changed tapes. We had a little break while we did so. Bob, we are now where you are in the development stage of Jones Intercable and the Jones limited partnerships. Where do we go from here?

LEWIS: Just to backup a minute and talk a little bit about Glenn's idea of raising money through limited partnerships for the industry. He was certainly the pioneer in that and it was a great idea. We had Neil Jones there, and he was in charge of raising money and working with the broker dealers, and once we got them on board that started growing very well.

We started raising considerable amounts of money in the public partnerships. We looked for systems throughout the land. We didn't have any geographic barriers as to where we would go. (This was before clustering became important!) We bought systems throughout the country. Jones Intercable grew to a little over 400,000 subscribers in the eight and a half years that I was there. It was an interesting time because we also cycled out some of those early partnerships while I was there.

KELLER: So you were not only buying but you were selling also?

LEWIS: Yes. For instance, number one, a little system up in the mountains which we bought into Jones Intercable by taking the partners out. Number two, we had a system down in Alabama which we actually sold to someone else. Then number three was one of the first public partnerships. I think those systems—they were small systems—I believe up in Idaho, and we ended up selling those systems. Number four, we had a system in Smyrna, Georgia, which we also ended up selling to another party. Then our Jones Fund Five, we called it, was the largest fund to that date and we bought the system in Alton, Illinois from the Anaconda Company. Anaconda had to repossess it from the people who had built it originally. We bought it for not very much, a little over $2 million. We grew that system from a small number of subscribers (about 3,000) to well over 10,000 subscribers in about five years. We ended up selling that system to my friend Bob Magness, at TCI. I went over to visit with him and told him it was for sale. They had other systems close to that one. You know how Bob was--we sat there and chatted about everything else. About forty minutes into the conversation we talked about the system and he wrote something down on the back of an envelope and said "Well okay. I'll give you a call tomorrow and tell you what we want to do." The next day I had a deal. Had to negotiate a little bit with him but at that time it turned out to be a real success. Our limited partners actually received about seven times their investment in that system. We kept the system for about five years. That success story made it even easier to sell the partnerships as we went forward. I am trying to remember the year that we sold Alton. It had to be about '81 or '82.

We continued to raise money and buy a number of systems in Wisconsin, from the Fitzgerald's, and a lot of other areas that I am having trouble remembering. I know that one of the last deals that I did make before I left Jones, which was in August of '84, was some systems around Buffalo, New York. A fairly large complex of about 20,000 subscribers.

I finally did go into business for myself. I bought some systems from a little company headquartered down in Texas. Two in Texas and about four in Kansas and one in Nebraska. I started my little company called LEWIS: Communications in '84. Right about that same time Carl Williams started talking to me. One day he came to me and he said "Bob, can I buy a little bit of your time?" I said "Well, what do you mean?" He said "Well, I need some help." Again, a long story short, he was having some problems and decided he wanted to bring his operation headquarters to Denver, which was located in Walnut Creek, California. I agreed to do that--I was just running my own little company more or less out of my home. He decided I could do both from his office. We made quite a transition with Televents which was the company name. We moved the operations to Denver. Didn't really move any of the people but we reestablished the operations. I hired a controller and a few other people and we started the Televents operations. I was running my company and his out of his office here in Denver. I did that for a little over two years. We had about 130,000 subscribers primarily in California. Although one in Florida and a couple in Wyoming and a couple here in Colorado.

KELLER: Had he built Coronado, California at that time?

LEWIS: He had already traded it to Time Warner. In the trade he got the system in the Bay Area, which was, I believe, Moraga.

KELLER: One was adjacent to Martinez as I remember.

LEWIS: Yes. Anyway, that was a trade that he made which I think was good for both parties actually. Time Warner had systems around Del Coronado. The Contra Costa system of Televents was a large system, about 70,000 subscribers. In fact, grew to about 75,000 by the time we sold the company.

It was a great little company. The problems that Carl really had were simply a lack of experience. The people running the company, the president, had come from a programming company. Apparently he had been too optimistic on some of his projections and the banks were a little nervous even though they had no good reason to be. We got the banks satisfied in about six months. We made some realistic projections and produced the necessary results. In fact, that happened to be the Bank of New York which was also TCI's lead bank at the time. We had a good time with that company.

Carl decided in '86 it was time to sell. Oh, and John Malone was on our board. And Carl said, "I've always told John that they get first crack." So he sent me to see John. We negotiated a deal to sell Televents to WTCI not just TCI, but to WTCI.

KELLER: That was a microwave company wasn't it?

LEWIS: It was. They wanted them to be in the cable operations business as well. It was a separate company at that time. It had been spun out. Although, I think plans were already in the works to bring it back which did happen shortly thereafter. It happened when the Marcus deal came together. They brought it back into the company after Jeff Marcus left. I digressed there. I'll go back to that later.

I did negotiate the sale of Televents to John Malone. At the same time I decided to sell my little company. Prices were pretty good at that time and I felt like that's what I wanted to do. I sold my company to Jay O'Neil who had been in the business and owned some systems. He had put together some investors and I sold my company to him. Ironically, we closed the sale of Televents to WTCI on Christmas Eve of '86 and then I closed the sale of my company to Jay O'Neil on New Years Eve of '86. We had a busy year end!

John Malone had asked me to continue running Televents for WTCI. I said I would for a while. I didn't really know what I wanted to do. But I said I would be glad to do that for a while. Then about three months after that, and this is now in March '87, he called me over one day and asked me if I would like to come over and be the vice president of corporate development and do mergers and acquisitions for him. I jumped at that chance because I had done a lot of acquisitions at Jones and loved doing deals. That was April the 1st of '87. That was fun. It was a lot of fun working with John. We did a lot of deals!

It wasn't but a year after I went there that we got involved in the Storer deal and ended up partnering with Comcast to do that deal. For many years that was the largest cable deal that had ever been done. It was $3 billion total purchase price of Storer Cable, which had a million and a half subscribers.

KELLER: This was in '87?

LEWIS: No, it was 1988 when we started working on it but we didn't close until '89.

KELLER: By this time though, TCI was on a good solid footing and their banking connections were solid at that point too.

LEWIS: That's true. Actually, the deal was negotiated twice and fell apart. Kohlberg, Kravis & Roberts owned Storer at that time.

KELLER: That's right. What do they call those things? Leverage buyouts?

LEWIS: Yes. They had bought all of the Storer properties. They had already sold the television stations to Gillette.

KELLER: Leverage buyouts.

LEWIS: It was a leverage buyout deal. They had already sold the television station and they had the cable left. The third time that we finally sat down we were able to strike a deal.

KELLER: So, at this point TCI needed a partner to make that deal?

LEWIS: Basically they felt like they did. As a matter of fact, it went even further than that. I wasn't directly involved in the Group W deal, I was on the tail end of it - but that's where the consortium of operators went together and brought Group W - Westinghouse Cable Group. The same philosophy was being used in the Storer deal. As a matter of fact when we started it was Time Warner, Comcast and TCI - all three of us. Time Warner dropped out later.

KELLER: This was just Time at that point? Wasn't Time Warner?

LEWIS: Time had bought . . .

KELLER: Had bought ATC.

LEWIS: Yes.

KELLER: But that was before they merged with Warner Brothers wasn't it?

LEWIS: I think you're right about that.

They did drop out after two attempts to negotiate the deal failed. They dropped out of the picture so it just left Comcast and TCI. But we did manage to negotiate the deal. TCI went to Knight Ridder in Miami and brought them in as a partner with us in part of the systems that were going to come from Storer. That was how TKR was born. Telecommunications & Knight Ridder combination. The systems in Kentucky - Louisville, Bowling Green and Covington - and some in New Jersey became TKR.

KELLER: At the inception of that agreement which you have - Comcast, TCI and Knight Ridder, was the thought to separate the systems based on geography--did that thought even entered the deal.

LEWIS: Basically that is true. Comcast was taking primarily eastern systems. Although they did take the Florida system—Saratoga.

KELLER: So that could really be what would later be called clustering.

LEWIS: It could to a degree.

KELLER: I don't remember any one else looking at deals on that basis at that point. You at Jones sometimes looked at those deals, but you wanted to look at where those systems could possibly be sold, is that correct?

LEWIS: Well, that's true. Yes.

KELLER: Based again on clustering.

LEWIS: Yes. We would buy groups of systems. We didn't necessarily say that any geographic area was off limits. By the same token we were reluctant to buy little systems that were scattered. If it was a group of systems—even if it was Wisconsin or California or whatever—we would buy them. We weren't trying to keep our operations strictly in a particular geographic area. However, we didn't want to buy single systems that were small and located where we couldn't sell them as a group later on.

KELLER: Nonetheless, when you bought a system for Jones through limited partnership you knew that within a period - five, six, seven years, whatever period it was going to be - you had to sell it.

LEWIS: Had to sell it, yes.

KELLER: So you were also looking at the front end as to where you were going to get out in the back end of these deals.

LEWIS: That's true.

KELLER: Is that correct?

LEWIS: Oh yes, no question about it. You always looked to see what your exit strategy was. Of course in some cases the strategy became more to buy them into the Jones Intercable operations and buy the partners out. But that didn't come until after we had quite a few successes because there wasn't any way that Jones Intercable itself could have financed them until the company got pretty healthy financially. Also, the public stock of Jones Intercable had to become worth a lot more than it had been earlier.

KELLER: So now you were working on the deal with Comcast and Knight Ridder to buy Storer, and you worked on that deal for TCI?

LEWIS: John Malone was involved and I worked with him. He made a couple of trips back to New York with me, but I practically lived in New York for quite awhile trying to get that one done. Once we had struck a deal it was still the negotiations and all the terms of the deal that were very, very tough. Kohlberg, Kravis & Roberts (KKR) started to walk out several times.

KELLER: Tell us about KKK.

LEWIS: Let's not get it confused with the Klu Klux Klan. .

KELLER: No, no. I don't want to do that.

LEWIS: It's KKR.

KELLER: KKR, okay. Well maybe that was a Freudian slip. In any event, you were looking to buy out KKR investment company?

LEWIS: Yes.

KELLER: And KKR had purchased Storer for the purpose of selling it?

LEWIS: Absolutely.

KELLER: Were they difficult to deal with?

LEWIS: Yes, very. As I said, they walked out of conversations with John Malone and I and Time Warner and Comcast. We were all in the KKR office in New York and we came back to them with a proposal and they just said "Gentlemen that's not acceptable. We'll see you later. Goodbye." I mean we were in his office like three minutes and we were gone. I think John was just as surprised as most of us but we had just never been treated quite like that.

It still kept coming around. They didn't have anybody else clamoring at their door to buy it. It was a big deal. It was a huge deal. I think I told you the price—that was wrong. It was a $3 billion dollar deal that had a million and a half subscribers. I said $1.3 earlier, but it was $3 billion. The largest deal that had been done in cable up to that point and for quite some time afterwards.

We finally did get an agreement on price. But then getting the terms negotiated was difficult. It was almost killed two or three times because of that. It took us weeks to get a contract actually signed.

KELLER: What were the major hang ups after price? Because I thought they were primarily interested in price.

LEWIS: Yes, but then when you get to asking them to warrant subscribers and homes passed and things like that – they said, "No. You're buying it as is." For $3 billion dollars we weren't buying it "as is". We were saying we've got to have some guarantees. It was those kinds of things. Account receivables became a big issue. They had not done too good a job of collecting their past due accounts. The ordinary things you go through, but they were being so adamant that they weren't going to give on them. There were times when it looked like the deal was going to crater again. But finally we would get through them. We just took them one at a time. It took a lot of negotiating.

KELLER: How did you as a little guy from Oklahoma feel going up against KKR? One of the big financiers in New York.

LEWIS: Fortunately I wasn't by myself. I had Julian Brodsky of Comcast. Of course, you know Julian – he is never bashful. But we had him and I had John Malone to help me when I needed him. It was actually probably one of the most stimulating deals that I have ever done. Because of the size and maybe the fact that we were sitting there with KKR people. Of course, they were just like a lot of people. When you get right down to it, just tough to deal with.

KELLER: But they had the R.J. Reynolds deal under their belt by that time didn't they, or did that come later?

LEWIS: I believe that came later.

KELLER: Anyhow they were very experienced at making these kind of deals.

LEWIS: Yes, they were. On the other hand they really didn't know the cable business even though they liked to think they did. Ken Bagwell was still running Storer.

KELLER: I was going to ask who was advising them from an operating standpoint?

LEWIS: He was. He was obviously on their side but in a sense he was a fair guy and all.

KELLER: Well he knew how to guarantee subscribers or accounts receivable and things like that.

LEWIS: I think that behind the scenes he was certainly able to—not during the discussion—but he was able to convince them of some of these points that we were bringing up that were very important.

It was one of the most stimulating things I ever did. I loved working the deal. As I said, John made a couple to three trips but he really didn't get involved in those day to day negotiations. It was fun to work with him because John is the kind of person you can tell him just a few things and he's got an answer for you just like that. It always amazed me at his vision and all. It was just fun to do the deal and work with the guys from Comcast. TKR wasn't involved in these negotiators. They came in later.

KELLER: As Knight Ridder?

LEWIS: Yes, as Knight Ridder. I am sorry. Knight Ridder was not involved in the early negotiations. We really brought them in after we had a deal struck with KKR. So they were not at that negotiating table at all. We only put part of those systems into the TKR partnership. The others like Houston and a lot of the other systems that we got were not part of the deal with TKR. TKR was already formed and had some systems in New Jersey. Then the Louisville and other Kentucky systems were added to that partnership. Of course, they came up with their equity money which was good for us. We needed some extra equity.

KELLER: So in effect TCI brokered some of those systems?

LEWIS: To our partnership with Knight Ridder. But not brokered outside.

KELLER: Yes, I understand. But still internally was a brokeraged system.

LEWIS: That's right.

KELLER: To various subsidiaries of TCI then?

LEWIS: Yes. But it was just the one. The Knight Ridder was the only one that we brought in.

KELLER: But that became then kind of a trademark of TCI after while did it not? Shifting systems from one of their existing subsidiaries to others. It's going on even to this day as we speak.

LEWIS: That's true. In fact, we'll get to the InterMedia situation one of these days in our conversation, Jim.

Anyway, we got that deal done and then a lot of smaller deals. We bought a lot of systems that were next door to our operations that we already had. Because my philosophy was if you can add 5,000 customers to a 20,000 customer system you just made the whole thing more valuable. We did a lot of those kind of—I won't call them just fill-in, but—additions to systems that we had all over the country.

KELLER: The clustering again.

LEWIS: Yes, definitely. The time that I spent at TCI we did an awful lot of that.

TAPE INTERRUPTED BRIEFLY FOR EXCHANGE OF MESSAGES

KELLER: Now, Bob, you are at TCI right now and you're in the process of making deals. The Storer deal, the joint venture with Comcast and Knight Ridder had been made. You went on to do other deals. How many subscribers did you bring in the deals that you did when you were with TCI?

LEWIS: I've never gone back and added them specifically, but we did make an estimate one time and I think it was a little over two million subscribers' altogether. I don't have the exact number. It was something I never thought too much about.

KELLER: And those were the ones that were actually brought into TCI?

LEWIS: I will say that probably includes all of the – no, I'll back up. That's true. It was about two million that we brought in - 750,000 of them coming from the deal with Storer.

KELLER: So about a 1.3 million in addition to the Storer deal?

LEWIS: Yes. I don't believe that's correct. I think when I added those up we added the whole thing. I was talking about the deals I was involved in that we did and it was the million and a half. Then I think there was about 550,000 to 600,000 additional subscribers that we brought into TCI. But TCI only got credit for obviously half of those subscribers in Storer. However, keep this in mind, the Storer deal was kept in tack. It was run as Storer Communications for some period of time even though Comcast ran the systems they were going to take out at a future date, and we ran the systems that we were going to take out. It was still run as a corporation, a Storer corporation because it was a stock deal. We couldn't break it up for at least two years.

I was on the board and we had board meetings. J.C. Sparkman was on the board from an operational standpoint as well. So we held regular board meetings in Miami. The headquarters of Storer remained in Miami for some period of time. We promoted a guy there to be the president. Julian later took him to Comcast and we brought Bill Whalen back as president. He had been the operations vice president of Storer. So we brought him back for about a year before Storer was divided. We took our systems out and Comcast took the corporation. That is the way the systems got divided. But for some period of time there we were operating Storer as Storer Communications.

KELLER: The intent anyhow of the joint venture, to use a broad term, was that these systems would be pulled out and go to various geographical area.

LEWIS: At some point. And they were. We couldn't do that initially for obviously many reasons. That is basically the story. As I said, that was a very interesting time. I did stay on the board for those two years. We had a great time running Storer. It was a good partnership with Comcast, Julian and Brian Roberts. They contributed very much to the deal itself and to the operations of the company as we kept it together for two years. Where do we go from here?

KELLER: You at this point were with TCI in the development area for two years, three years, what?

LEWIS: You mean how long did stay in it?

KELLER: Yes.

LEWIS: Nearly ten.

KELLER: Was it that long?

LEWIS: I became a senior vice president in '91, with the same responsibilities basically. I was running what a lot of people called the M&A division we called it corporate development at the time. It was primarily mergers and acquisitions. During this period of time is when Leo Hindery decided to get into the business. In '88 I first met Leo. He had talked with Malone and Donne Fisher and they had basically agreed to be partners with him if he could find systems to buy.

In fact the first group of systems that he ended up buying were systems that were owned by the Hearst Communication company out of New York.

END OF TAPE 2, SIDE A

BEGINNING OF TAPE 2, SIDE B

KELLER: We are going to finish what Bob has started and leave the rest until our next session.

LEWIS: Jim, as I was indicating that one of the deals I had started working on and had pretty well negotiated a deal was with Ray Joslin of Hearst Communications and the Hearst properties that they owned in the Bay area of San Francisco. They had about 70,000 subscribers out there in smaller systems south of San Francisco. We had been looking at those for TCI but at about the same time, Leo Hindery had been looking for his first deal for InterMedia Partners. One day I was in talking to John Malone and telling him what the deal was with the Hearst properties and he said, "You know, that's a deal that we ought to let Leo have." So I got in touch with Leo then and told him about the deal. We went back to New York and negotiated some more with Ray Joslin and his folks and got that deal signed up for InterMedia Partners. That became Leo's first cable deal.

KELLER: Now Leo was with the Tribune Company wasn't he?

LEWIS: The Chronicle.

KELLER: The Chronicle Company who also owned systems in the Bay area.

LEWIS: Yes they did. They owned some there and of course some down south as well. Leo had left the Chronicle. He was the chief financial officer for the Chronicle for quite a while. He had left and decided to form InterMedia Partners and go after systems. He had Ed Allen, who you know, a pioneer in the industry. Ed had been running all the western properties but had retired from that sometime before. But he was one of Leo's initial partners in InterMedia Partners. Anyway, he was looking for a deal and so we let him have the Hearst deal. I think part of the reason was we wanted to get him in the business and so we decided to do it that way. That was the beginning of InterMedia Partners. I think that deal closed in late '89. He had formed the company in '88 but I believe that deal got closed in '89.

KELLER: Did he buy the Tribune systems then?

LEWIS: The Chronicle systems?

KELLER: The Chronicle systems.

LEWIS: No, he did not. I did that for TCI later, quite a bit later. In fact, just before I left TCI, before I retired, that really was the last major deal that I did was to buy the Western Communications systems for TCI.

KELLER: Bob, this is apparently a good place for us to stop. We will setup another date when we can finish.

END OF TAPE 2, SIDE B

KELLER: This is the second session with Robert J. LEWIS:. The date is January 7, 1998. We are once again in Bob's offices at 15504 East Hindsdale Circle in Englewood, Colorado. The time is approximately 2:00 p.m.

Bob, when we left off you had just made the Western Communications deal for TCI. I believe the pertinence of that was that it was the first time you met Leo Hindery. Is that correct?

LEWIS: Well I had met him way back. Remember we were talking earlier about how we (TCI) gave him the first deal. So I actually met him in '87. He formed InterMedia Partners in '88. Then we gave him the Hearst deal, the properties in California, which we talked about earlier.

KELLER: You're referring now to InterMedia Partners. Is that correct?

LEWIS: When Leo formed InterMedia Partners in '88 and TCI agreed to be a partner with him then we actually gave him the first deal, which we have already discussed - the Hearst properties. Okay. That closed in '89. But I closed the purchase of the western cable company from Chronicle Publishing Company. We contracted the deal in '94. It actually closed after I retired. But we had the deal done. We had struck the deal and everything had been signed. Well anyway, when we got Western agreed to, that was probably the last deal I did for TCI before I retired.

KELLER: Let's see if I understand. You were with TCI making deals and TCI was parceling off some of these deals to other companies like InterMedia Partners and others that they were bringing in as partners in other deals?

LEWIS: Well, that had been done over the years previously by John Malone, like with Bill Bresnan. A deal was done with Bill Bresnan, some time ago. But I didn't negotiate the deal on the Hearst properties to take it and give it to InterMedia Partners. But as we got into the process and we had basically struck a deal with Hearst, John Malone and I were talking one day and he said, "You know, this would be a perfect deal to let Leo have so that he can get started in the business." That was really the only one of those that I was involved in where we took a deal and gave it to one of our partners.

KELLER: How would you or John Malone or both of you decide which one of these deals you would allow the Bresnans or the Hinderys or some of the others that you had deals with. How would you determine that?

LEWIS: It was usually almost an afterthought from time to time. Certainly the Hearst deal was. We had no intention of not taking that one ourselves in the beginning. It really was not a, if you will, a formula or any particular policy. It was just as things would come up. In this case, I think part of it was the fact that Leo had not found a deal yet and we wanted him to get into the business and thought that this was probably as good a vehicle for him to get started as anything. There has never been any particular policy. Just sort of a case by case basis.

KELLER: I think I can enumerate some other deals that TCI has been in partnerships with such as Falcon. TCI had a piece of Falcon or they had certain deals together.

LEWIS: Well they do now. I mean as we speak, they have signed a deal. Prior to that, not really. TCI didn't have any ownership in any of the Falcon systems.

KELLER: How about any others that TCI did have ownership in that you recall? Other than Bresnan and Hindery?

LEWIS: There has been a number over the years. That really taxes my memory because I wasn't involved in a lot of those. Let me think. Well, Time Warner.

We had two major deals with Time Warner. One was Memphis, Tennessee where we were fifty-fifty partners, and Kansas City, Missouri, where again there's a partnership fifty-fifty. In both cases Time Warner was the managing partner. As a matter of fact it was in the early '90s we decided that it was time that Memphis be bought by one party or the other. There was no particular reason to keep that in joint venture at that time. We had a buy-sell arrangement. It was kind of fun. I got to pull the trigger on my friend Dave O'Hare at Time Warner. So I wrote him a letter and said we will buy the system for x-amount. They, in turn, then had the right to say "No, but we will buy you at that same amount." They decided to buy the system. Which was not unexpected because they were managing the system. So we ended up selling our share of Memphis, Tennessee to Time Warner – for a very healthy price.

KELLER: I think I can recall hearing John Malone state that in any of these partnerships where there is a buy-sell agreement, you name a price and he'll tell you whether he is going to buy or sell. Is that basically correct?

LEWIS: That's right. Except in this case I did it for TCI. I named the price and they said, we'll buy.

KELLER: Yes. Usually the deals he gets into are just the opposite. You give him a price and he would make the decision one way or other. Is that true?

LEWIS: But I think actually it was always whoever pulled the trigger first. It was a true buy-sell where either partner could pull the trigger. In our, case as far as Memphis was concerned, we did it. They could have done it. It was mutual. Either party could do it. But the party that made the offer gave the other party the right to buy or sell. Anyway, kind of fun.

KELLER: Now there is, I think, still in existence a company in Pennsylvania or New York where TCI has a major interest.

LEWIS: I am remembering.

KELLER: I can't recall it either.

LEWIS: Obviously this past year, 1997, they have done a lot of joint ventures, which I certainly haven't been involved in because I haven't been there, with the exception of one that we're doing with them that we can get into a little bit later. I can't think of whom you might be referring too. Not Joe Gans. I honestly can't recall a partnership in Pennsylvania.

KELLER: I can picture the guy but I just can't put a name on him right now. My memory is as good as yours.

LEWIS: You know, there were several systems that had some minority ownership by either local people or other industry people, but I can't think of any that were in Pennsylvania. At least I was not involved with.

KELLER: I thought it was headquartered in Pennsylvania but I could be wrong. But that's not important. In any event, TCI was making these partnership kinds of deals initiated by them in some cases. You can't say what the reasoning was or how they got into these deals or why they wanted to make the deals. Did they want to get these companies off the balance sheet? Or was there a particular reason why these things happened?

LEWIS: I think in the case of the Hearst properties, for instance, that we let Leo Hindery take over and do that deal. They were not cheap. That was when prices were pretty high on cable systems. I think that one of the reasons was, in part, John Malone's thinking. It was simply, "Hey this is not a deal that we necessarily need to do right now and put the debt on our balance sheet." That may have been one of the reasons although it was not really spoken at that time. I think we just wanted to get Leo in the business.

KELLER: It's not an unusual situation to try get as much debt off the balance sheet as possible and then still be able to bring the systems or companies back when the timing was right. But he has made more and more of these over the last years. How many of those were you involved in, do you know?

LEWIS: As far as doing other deals with other cable companies and becoming either joint ventures with them or putting systems off to the other companies, I really was not involved in any more of those that I can recall than we talked about, i.e. Storer, Comcast. We did consortium deals where we would buy systems. The one that comes to mind of course is Jack Kent Cooke's company. But that was not a deal where we did a joint venture with someone. Leo Hindery and I put a bunch of companies together as a consortium to buy Cooke. Now there is where Falcon came in. Falcon was involved. TCA out of Tyler, Texas, Bob Rogers company. Adelphia Communications and ourselves and InterMedia Partners. There were five of us that went together as a consortium and bought Jack Kent Cooke's company.

KELLER: Why was this Bob? Why couldn't TCI have handled it themselves?

LEWIS: We didn't want them all. They were not strategic to us. We just wanted certain systems out of the group. And, of course, Leo Hindery couldn't have really handled the whole thing. It would have been too big for him. Of all five of these companies there were systems that were strategically located for those five companies. So that's really why we did it. Cooke's systems were quite spread out, quite scattered. It seemed to be the logical way to do it.

KELLER: Before you went into the consortium, virtually each company knew which of those systems they were going to pick up?

LEWIS: Pretty much. They knew which ones they wanted. We got together as a group and just said, hey, let's make a joint bid. After many cantankerous meetings and gnashing of teeth and pulling hair and so forth, we finally got a deal struck.

KELLER: I could imagine how difficult that would be with all those participants.

LEWIS: It was not easy. The consortium worked pretty good but Cooke was something else.

KELLER: Tell us about him.

LEWIS: The guy that worked for him, Jim Locker, was also something else. We finally negotiated a deal. In fact, I finally got it done with Locker sitting in my TCI offices here in Denver. We finally came to an agreement after many aborted attempts.

KELLER: If I remember, these were mostly small systems were they not? Relativity small.

LEWIS: Tucson actually was the largest system in the group. Hindery took that along with some other systems. We took some primarily in Oregon. Took a couple or three in Pennsylvania, some smaller systems. Primarily Oregon properties that were next door to other operations that we had and so forth.

KELLER: It's interesting. You had five companies involved in that thing yet you talk about Tucson. The Tucson system is surrounded to a large extent by Jones.

LEWIS: That's right.

KELLER: Yet, Jones wasn't involved in the deal.

LEWIS: No. I think that's primarily because - and I am not sure of this Jim so I wouldn't want this to be quoted as the truth because I can't remember exactly - but I think it may have been primarily because Leo Hindery had decided that those were properties that he would like to have in his partnership, and he had raised a certain amount of equity money. He basically needed that to be a part of his package. I don't think that Jones was invited into the deal. I can't recall that for sure.

KELLER: Because I would have been surprised. I know that when I was at Jones they had looked at Tucson with a gleeful eye for a long, long, long time. There were constant battles going on for various new areas as they were built contiguous to Tucson.

LEWIS: And they are still separate.

KELLER: They're still separate?

LEWIS: TCI does now own Tucson. They bought it out of the partnership, InterMedia's number one partnership. So they do own it.

KELLER: Are there still overbuilds in certain areas down there?

LEWIS: There is a little bit. I don't think there is a lot, but there is some.

KELLER: Bob, that brings up a thought now that you eluded to earlier - that is the term clustering, which seems to make a lot of sense. Larger companies right now are swapping properties and switching and selling to each other back and forth so that they can consolidate various systems around a central hub. When in your experience did you start thinking in these terms?

LEWIS: Well, actually almost from the beginning as far as my joining TCI after the sale of Televents to them. One of my objectives in my job at TCI was to look for and find systems that were next door to operations that we already had and buy those systems. Certainly if they could be interconnected. We did a lot of that, Jim. I can't even remember what they were because they were small deals, medium size deals, not very many large deals that were like that. With one exception we'll get into in a minute. That concept goes back ten or twelve years as far as TCI was concerned. Those were pretty easy decisions for us to make at TCI. If a system was on the market that was next door to one of our systems then we had every reason in the world to want to buy it. It didn't mean we bought them all because some of them we wouldn't pay the prices that the owner wanted. But usually we were able to successfully negotiate a deal that was fair to both parties. We did a lot of that throughout the country.

To me it was like adding an extension to an existing system. You make a small system larger it becomes more valuable. Now it has gone much beyond that today because now we are taking about clustering major cities like Chicago. I don't know if Los Angeles will ever get consolidated, but there are some things in the mill that will certainly help do that. I think TCI always had that concept but it was hard to get other companies to agree to swap a property because you know, "my system is worth more than your system" or whatever. Until, frankly, the last two or three years it has not been as accepted as it probably should have been.

One major exception to that was one of the deals I did do at TCI was to consolidate the Denver market. As you recall, the Denver proper system, Mile High Cable, was being operated by Time Warner and had various local partners involved when the franchise was granted. TCI had a lot of the suburbs but Time Warner had some of the suburbs. So my friend, Dave O'Hare, and I put together a deal wherein we would swap some of the systems that we had in other parts of the country that made sense to them for the systems here in Colorado. That included the Mile High deal. We brought in Bob Johnson of Black Entertainment Network as a minority partner in that deal. Anyway, we got that deal done with Time Warner and traded for their systems in Littleton, Northglenn, Wheatridge, Arvada, and several more.

KELLER:: And Aurora?

LEWIS: Well no. That was already United which had been bought by TCI. Time didn't have Aurora.

KELLER: I thought TCI had it because United had the suburbs.

LEWIS: Yes, that is how we got the suburbs in the beginning. That's true. Time Warner had those others.

KELLER: I know they had some of the northern suburbs, Thornton and some of those areas up there.

LEWIS: They had Thornton, Northglenn, I think Wheatridge and maybe Arvada. And then they had Littleton. So we swapped systems in various places. One was Germantown in Tennessee, which was next door to Memphis, which they had bought from us earlier.

We did that deal which consolidated the Denver market with the exception of what Jones still owned in the market. Of course, that's now since been done. So that TCI does have all of the market area in Denver. By the way, that was a deal that Malone didn't think I'd ever get done. But O'Hare and I stuck with it and kept on and finally it turned out to be a good deal for everybody.

KELLER: The concept or the term clustering seems to be relatively new--within the last two or four years--but as you point out it's not. As one of the things we had discussed earlier in the last session, when you were looking at properties to buy for a Jones Intercable partnership you were also at the same time looking for a potential out or potential sale of that system to a larger operator in the area. So it goes back that far.

LEWIS: That's true.

KELLER: I think even maybe farther than that. Anyway, I did want to bring up that term clustering because I am not sure too many people will talk about it from the perspective you have.

Okay. Now you're still at TCI. You're still making these deals. Shall we go from there and get into what you did after you retired from TCI the first time?

LEWIS: Well, I am not with TCI now.

KELLER: Then you were out putting together some of your own properties?

LEWIS: Well, no. When I left Jones Intercable that is when I actually formed my own company. We talked about that. No, when I retired I really didn't intend to be very active. Before I retired, Leo Hindery said to me, "You know if you're going to retire". In a way he hated to see me retire because we had done a lot of deals together at TCI and InterMedia, but he said, "When you do I want you to come on my board." It's really an advisory board because it's not a corporation, it's partnerships. So I agreed to do that. I started attending all of his management meetings and advised Leo on a number of things. I got involved with an internet company called On-Line System Services, Carl Williams and I did. I am on their board as well. Other than that and other than doing an occasional bit of consulting, which wasn't much, I was looking after some real estate investments I have and a few things like that. Thought I was busy then. But that lasted about a year and a half.

I did attend a lot of meetings with Hindery with some of his investors and also attended, as I said, his management meetings. I wasn't day to day active except by phone. Hindery was always calling me. Probably hardly a day went by that we didn't talk on the phone some because he was still doing additional deals. When he got the call then from Malone to come to TCI and be president, that is when he called me and said you just got to take my place at InterMedia. It was hard for me to say no because frankly I was very pleased that Malone had asked him to come to TCI. It was hard for me to tell Hindery no. So I agreed to become the managing general partner and CEO of InterMedia Partners. So that is what I am doing today and have been doing for nine months now.

KELLER: How large is InterMedia Partners now?

LEWIS: Our present customer cap is about 850,000 all in the southeast part of the country - Georgia, North and South Carolina and Tennessee. Now one of the deals that Hindery had already started with TCI was to take on all of their Kentucky properties. Primarily those that came out of the Storer deal which was run by TKR and the Telecable systems that you will remember, Lexington and some of those. That's when TCI had decided to offload some of the debt from their balance sheet and put those properties into a partnership with InterMedia. That had been started before Leo Hindery left InterMedia and went to TCI. We have continued to put that deal together and have an investor with the Blackstone investment group out of New York who will be our equity investor along with TCI. They will each own 48 ½ percent and then we will be the managing general partner of the Kentucky properties. The deal is signed and the franchises are now in process of being transferred. We hope to close at the end of March but it could go into April '98 before we get it finalized. That will put us at about a million and a quarter subscribers. That's an additional 430,000 subscribers.

KELLER: Which places you where on the scale of largest companies?

LEWIS: I think it puts us close to number ten. It depends, I am not sure. I haven't looked at the latest list because there's been some consolidations and all. But I think we'll be right at ten maybe even nine. Nine or ten. Mid-size.

KELLER: Would it be correct to assume that you're being saddled - you, as the managing general partner--are being saddled with a tremendous amount of debt?

LEWIS: Pretty high. .

KELLER: Has to be tremendous since you're getting dumped with the TCI debt. Your debt amortization has to be tough.

LEWIS: Of course, we don't take over their debt it actually gets paid off and we refinance everything and we brought in Blackstone with new equity. But we already have the financing in place with a consortium of banks. Toronto Dominion is going to be the agent bank. There are about fifteen banks involved altogether.

KELLER: But you still have to pay that off.

LEWIS: A lot of debt. Yes, that's right. But our projections on the systems show that it will work. It actually shows an excellent return to both Blackstone and to TCI over a five year period of time.

KELLER: Is that the term you're looking at, five years?

LEWIS: Generally speaking it is. It could be longer, could well be longer. But it also could even be shorter.

END OF TAPE 2, SIDE B

BEGINNING OF TAPE 3, SIDE A

KELLER: I am doing the oral history with Robert J. Lewis. We were interrupted briefly. Bob, tell me where you were, please.

LEWIS: Where was I Jim? That's a good question.

KELLER: You were making the deals and just joined InterMedia and we were talking about InterMedia Partners.

LEWIS: Something about the Kentucky deal actually.

KELLER: Yes, at the present time.

LEWIS: I was just on the phone about that.

KELLER: Which will bring you from about 800,000 to over a million plus subscribers.

LEWIS: A million and a quarter subscribers. Yes. We are hopeful of closing that transaction in April. This will be Louisville, Lexington, Bowling Green, Covington, and Hendersonville, Kentucky, which is about 430,000 subscribers. Primarily we'll have two basic partnerships. Our InterMedia Partners Four which has most of our current operations and this will be InterMedia Partners Six which will have all of the Kentucky systems.

I think we were talking about the financing of that Jim and you asked about the fact that they will have a lot of debt on them and that is true. By the same token our cash flow projections based on both actual and what we think we can produce out of the systems does definitely pay the debt, the interest, and what have you. It should be a good return to our investors once those partnerships are sold or refinanced or whatever the case may be.

KELLER: Your investors now from apparently what your saying are more corporate type investors as opposed to individual investors?

LEWIS: Yes. Even in the InterMedia Partners Four, while we have a number of investors, they are investment companies and various - even some pension funds and things like that. Just to name a few, we have Sumitomo Corporation as a partner in InterMedia Partners Four, along with General Motors Retirement Plan, General Electric Credit Corporation (GECC), and Center Partners which is an investment company out of New York. In InterMedia Partners Six there is only one investor but they represent a group of investors. It is the Blackstone investment group out of New York.

KELLER: Now are all of these limited partners? Are some of them limited partners and some of them general partners?

LEWIS: All limited.

KELLER: All limited. InterMedia Partners is the only general partner?

LEWIS: That is correct. TCI, of course, is also a limited partner in both InterMedia Partners Four and InterMedia Partners Six.

KELLER: Where does InterMedia Partners go? What are the future projections? What is it to be over the next five-ten years? Are you buying any of them back into another company as others have done?

LEWIS: Like Jones has done?

KELLER: Yes.

LEWIS: The answer is no. We have not done that nor do we have any definite plans to do that. In all honesty, the fact that Leo Hindery left and went to TCI probably gives InterMedia Partners a limited life. Now that could change and there are a number of things that could happen to make that change. My guess would be at this point would be that InterMedia Partners probably has about a five to a seven year life left. Might not be that long but somewhere in that neighborhood. Because I don't think that we will continue to do deals past this InterMedia Partners Six deal that were doing with the Kentucky properties. Now we may do some fill-ins, clustering, again. Adding systems to the areas where were already operating, but they will go in the present partnerships.

The scenario that could happen that might perpetuate InterMedia Partners as sort of an operating company could be that, when these partnerships are mature and it's time to basically sell the assets or do something with them, one possibility would be to put those two partnerships together and go public with the company. In other words, an IPO. That's a possibility. In fact, Blackstone was very interested in being at least able to do that. To me that's not the most likely scenario.

I think the most likely scenario are two others. One, that TCI may want to buy these systems out of the partnerships down the road assuming that they get their balance sheets in good shape. These systems are all good systems and they're going to be clustered and it would make a lot of sense. So that is one.

KELLER: Does TCI have the right of first refusal on this deal?

LEWIS: Not really, no. But they certainly will have a right, in other words, to try to buy them assuming that the other partners agree, but the other partners would have veto power. They could say no we want to put them out on the market and see what price they would bring. There is nothing that would keep others from being interested. Because you know how that works. If somebody has a right of first refusal it sometimes keeps others from being interested in the systems. Obviously, the outside investors are very concerned about that not happening to them in these deals. But TCI certainly would have the right to bid on the systems and could buy them back in if they wanted to.

KELLER: Who pulls the trigger?

LEWIS: It has to be agreed to by a majority of the partners. In this case of InterMedia Partners Four it would be a majority. In the case of InterMedia Partners Six you would have to have both parties agree. TCI and Blackstone agree that it was time to do whatever they intended to do.

The other scenario simply is to put them on the market and let whoever bid the highest price buy the systems. So, I have to be honest and say that InterMedia Partners is probably not a company that will be around for a long, long time to come. It was not designed as that kind of company. Particularly with Hindery being in his position it changed the company entirely because he is out of the ownership of InterMedia Partners.

KELLER: Where does Bob LEWIS: go?

LEWIS: Well, Bob LEWIS: retired once and he hopes to do it again. The question is, will I stick with it as long as it may take? I don't know the answer to that. Good Lord willing and I have a lot of fun, why I might do it.

KELLER: You're still enjoying it then?

LEWIS: Oh, I am enjoying it. Yes. I am enjoying it. Got a lot of good people and I can fortunately do most of my work from Denver. I travel a little more sometimes then I want to, but it works okay. I've got good people both in San Francisco, which is where our corporate headquarters is. And then our operations headquarters is in Nashville which is close to the systems. Of course, we have the Nashville system. It works out very well. Steve Crawford is our chief operating officer, he's basically responsible for the day to day operations of all the systems. So it is working very well.

KELLER: When you're looking at properties to buy do you do your own projections? TCI does their own projections and whoever the third party may be do their projection and you put them all together and see which one makes the most sense?

LEWIS: We do them. Then we, of course, furnish them to the other partners, as in the case of Blackstone. Then they take them and they go through them. This is not Blackstone's first cable deal so they are familiar with cable. They basically fine tune the projections and show them back to us and we get together. By and large, we do the projections because our people are the ones that are the most involved in operating the systems.

TCI, of course, in the case of Kentucky, those systems they had been running so they know what they are. But they accepted our projections on what we think we can do with the systems. A lot of rebuilding will be going on in those systems in the next couple years.

KELLER: So you in fact as a general partner do the due diligence for the other partners before getting into the deal?

LEWIS: Absolutely. Then we give them our information. We put together a whole booklet of information. A little bit like what the brokers do when they have a property that's on the market.

KELLER: Bob, we have brought your operating career to the present time. Looking back over your entire career, over forty years in cable television, what do you think were the major milestones both in terms of the industry and your personal association to the industry, over this period?

LEWIS: I think as far as the industry is concerned it's been the technological developments. The changes in the industry that I've seen over that period of time. That's by far the most important aspect of the industry because I started when we had amplifiers that carried five channels and look where we are today. When I say technological developments that includes obviously the satellite transmission and all of those things. I guess I am not as much of a visionary, I know I am not as much of a visionary as someone like Malone and people like that.

KELLER: That's going to be my next question. I would like you at this point just to think back over the forty years. What are your major memories both personally and from an industry standpoint?

LEWIS: To try to kind of take it in chronological order from both an industry and my own personal involvement's point of view. Again, back when I got into the industry we were only looking at communities that one, didn't have television stations at all because we didn't have a whole lot to offer. And that's what we were doing. We talked about this earlier. It was strictly a community antenna type system.

The order of development of the industry is hard for me to divorce from the technological advances. Which also then created the programming advances over the period of time. I remember when Ted Turner came to an NCTA executive board meeting in Florida, in about '74, and told us in a meeting that he was going to put his channel 17 signal on a bird in the sky and we could all get it in our cable systems. We sort of sat there with our mouths open. We said hey that would be programming that would really make the difference between being able to build a system that had three stations, or even maybe two stations, which was territory that we wouldn't even consider previously without having something else to sell. Of course, obviously, HBO had come along about that time and they were the first ones to go up on the satellite.

My vision of the past is tied with all of those technological developments. We had a lot of stumbling blocks along the way including the second report and order, and the FCC, and Congress, and all those things. There was a multitude of fights we had to go through - copyright and so many different things. But technological advances kept this industry moving. My personal involvement, obviously starting just as a non-experienced cable system manager and learning through the school of hard knocks, believe me learning about the industry and trying to learn enough technically to not be buffaloed by the engineers.

KELLER: We all went through that.

LEWIS: My interest has always been in "management." It was my major in college. Fortunately, I was able to advance with the old Vumore Company and then Cablecom General over that period of time. The industry never would have grown like it did without those technological advances.

KELLER: Do you recall, as I do, and I considered this one of the major turning points of the industry, the Miami convention in 1966?

LEWIS: Yes, I was there.

KELLER: President of the NCTA, Fred Ford, the former chairman of the FCC hired as the president of the NCTA. I have asked a number of people this question over a period of years and some of them remember it and some of them don't. Fred in his inaugural speech to the convention threw out a proposition that the cable television industry make a deal to be allowed to carry distance signals if they would give up the right to initiate programming.

LEWIS: I haven't thought about that forever, but you're right. That proposal was made, wasn't it?

KELLER: Yes, it was.

LEWIS: It absolutely was.

KELLER: I am absolutely frightened to think what would have happened if that had been accepted.

LEWIS: Boy, I had forgotten all about that. That would have been pretty disastrous.

KELLER: Catastrophic in my mind.

LEWIS: Yes, that absolutely would have been. Fortunately, that didn't happen and we did get the right to carry distance signals under certain conditions although limited at first.

KELLER: But we never gave up our right. In fact, we were required to program at one point.

LEWIS: Never gave up the right. Jim. Your memory is very good.

KELLER: Well some of those things are that striking I will keep reminding myself of what could have been the big difference in the industry. People. We've already talked about some of the people who had major impact on you. Larry Boggs?

LEWIS: Yes, definitely.

KELLER: Bob Clark?

LEWIS: Yes.

KELLER: Got to say John Malone?

LEWIS: Oh yes, and Glenn Jones.

KELLER: And Glenn Jones, okay.

LEWIS: You bet.

KELLER: Any others that you could think of?

LEWIS: Well, there are some. Going back to my early days. When I mentioned a while ago that learning enough technically to not be buffaloed by the engineers, I have to give credit to our chief engineer at the time at the old Vumore and Cablecom General companies, and that was George Milner. I learned a lot from him. There is another fellow that worked basically under him as sort of a field engineer, and both of these gentlemen have unfortunately passed on, but a fellow by the name of John Holmes. I spent quite a bit of time with him just learning the basics of what a cable system was about. Of course, then they were pretty simple compared to today.

I hate to think about if I had to go and explain the headend equipment to somebody today. I would not be very good at it. That's for sure.

As far as other people. I think those are the ones. With Glenn Jones I learned a lot about partnerships and financing in that manner, from Glenn and Neil Jones for that matter. That has certainly helped me down the road and even now because were involved with partnerships now.

But I give Larry Boggs a lot of the credit, and Bob Clark. Because Bob gave me a lot of responsibility and chances with Vumore and Cablecom General. So those are the people that I give the most credit. They certainly got me in the business.

KELLER: Bob, there seems to be some kind of a void or at least there's a mist in my mind. You're in Oklahoma and Vumore was operating in Oklahoma. The Schneider's came down to operate in various parts of Oklahoma at that point under whatever their various names were.

LEWIS: Genco.

KELLER: Genco was one of them. Ultimately, United Cable. Was there any time that you were involved with them or that there were joint ventures between the two of you?

LEWIS: We didn't have any joint ventures. We battled with Gene Schneider in Tulsa, Oklahoma to get the franchise and he won. At that time Cablecom General was the company and we were trying to get the franchise there and, of course, had been an Oklahoma company which had moved to Colorado. But we had two of the local television stations as our partners. At that time that was not prohibited. But we still didn't win the franchise, Gene Schneider did. But we never had any joint ventures with them.

KELLER: It was some years before that Tulsa system was built though wasn't it because of no importation and . . .

LEWIS: Well, you know . . .

KELLER: Or was that one that was built immediately?

LEWIS: I think it was built fairly early. I don't believe Tulsa at that time even had a independent television station. So I think it was built long before Oklahoma City got built. I think it was built fairly soon after Gene Schneider got the franchise. I couldn't say how long but I don't believe there was a big delay.

KELLER: I can recall down in Oklahoma that in some of the markets, and I am going to use Stillwater as an example, where they were getting signals both from Oklahoma City and Tulsa yet relied heavily on local origination in the early days. Bartlesville was another one, I think, they did that too. There was a big question as to the large expenditures required for local origination. Often times it didn't even work. Those systems were a tremendous cash drain for some time. Do you remember any of the other situations that were like that other than Colorado Springs?

LEWIS: Most of the systems, in all honesty, that I was operating I would consider more classic. I mean they were all pretty much in areas where they had to have our service to get decent television reception. We tried local origination in a number of the systems and it was very amateurish. It really was. One camera in a little corner of the room and you do a few little local shows and all. But very amateurish and really, I don't think ever got the attention of people in your community to the extent even that local originating programs today could do because they are much more sophisticated.

What you do, as you well know because you did a lot of franchising, you would always put that in your franchise application--that you would do a lot of local origination and sometimes to the extent that it cost so much money it was difficult to ever actually produce what you said you would do.

That's all I can remember. Certainly Colorado Springs was a big local origination type of franchise application. In fact, they had a huge studio there.

KELLER: When you were in partnership with newspapers, at least one as I recall was Bartlesville . . .

LEWIS: Well, I wasn't involved in that.

KELLER: Vumore was?

LEWIS: Not really. You're talking about the Reynolds?

KELLER: I was talking about the partnership with the newspapers in Bartlesville and also in some other communities.

LEWIS: We had a newspaper out of Topeka, Kansas. A publisher that was one of our partners in Amarillo, Texas, system I did build. But we also had two local television stations. They had the newspaper in Topeka but they also had a television station in Amarillo.

Bartlesville, the old telemovie experiment, was closed down because it was ahead of its time. They couldn't get people to subscribe just to take movies over a cable system. That system never did produce regular cable programming. It was closed down and then Reynolds . . .

KELLER: Reynolds Newspapers or something like that?

LEWIS: Well, the name of the company just escapes me. Many years later they came in and got a franchise to build the cable system in Bartlesville. Vumore did not.

KELLER: Then sold it to ATC. I know that.

LEWIS: Okay.

KELLER: And the newspapers still had a minority interest in it.

LEWIS: They may well have. I wasn't aware of it.

KELLER: My question and the reason for bringing it up is that often times when the local newspaper was a partner or had an involvement with the system, but they never used the news gathering facilities on the newspaper.

LEWIS: I guess that's right.

KELLER: I have often wondered why.

LEWIS: That's a good question and I don't know why, probably because it doesn't make sense.

KELLER: Are they originating programs from, say, the city room of major newspapers.

LEWIS: It still hasn't happened to my knowledge.

KELLER: I thought maybe it happened in Lexington?

LEWIS: Not to my knowledge. Now I've been to Lexington and seen their system and they have a local origination studio that is fairly inactive, quite frankly. I am not aware that they are doing that there. But I was only there for a few hours. I haven't spent a lot of time there.

KELLER: Where does the industry go from here Bob, in your opinion?

LEWIS: Good question. Obviously, I think getting into the data transmission, internet services, a converter (smart box) that will do a lot of different things.

KELLER: Including a modem?

LEWIS: Yes. That will be good for the industry. Although I don't believe that the TV set is where most people are going to want to do their internet activities. I think that the PC is still going to be the primary vehicle for that.

I don't want to rule out telephony but I am not sure that local telephony services are going to be a big play for the cable industry. Just as I believe most phone companies are thinking that cable is not where they ought to be. There is some exception with Ameritec, in particular, where they still seem to keep going after cable franchises. But I do think that getting involved in data transmission and maybe long distance type services through the cable system is an area which will develop. Local telephony will need major players to make it successful.

A lot more pay-per-view through the digital television. Expanding our channels through digital, which is happening today and will continue to happen, even down into smaller systems as time goes on.

Beyond that, I am certainly no visionary like John Malone, but I think I still see the business as a good, basic, entertainment and data type business. With ancillary type services adding to the cash flow. I still don't believe that direct satellite will put us out of business. I am well aware that they may start doing local stations.

I still think that a good cable system is still the best way for people to get their entertainment, information, internet, and data.

KELLER: Do any of your systems have a web site at the present time?

LEWIS: Yes, in the sense that one of our systems in Kingsport, Tennessee where we have put in an internet service, we have a web site there. Also, we have @Home Service in Nashville. If you're talking about an identification web site on the internet, yes.

KELLER: Where you can provide information to your cable customers?

LEWIS: Yes. In fact, in Kingsport, which is about a 30,000 subscriber system, we will be going a step further and having local content and local advertising over the internet. That will be part of what we will be doing this year. We just turned that one on in August or September '97. We have close to a thousand subscribers. Part of them are just dial up subscribers because we didn't have the cable modems ready until about sixty days ago. We had some problems with the modems and had to get some bugs worked out. Now a lot of the dial-up customers are switching over to modems because of the high speed whereas the dial-up is a much slower speed. But we are encouraged by that business. Our @Home Service in Nashville has been in operation for only about three months and we have over a thousand subscribers there. That service, of course, is high speed and it's two-way on our cable system. People love it. We don't have anybody disconnecting from it unless they move out of town or something like that. But it also is not cheap. Its $44.95 service. You're not going to get huge numbers but you don't need huge numbers to make cash flow.

KELLER: Let's do a "what if." We're looking right now in the industry, and correct me if my figures are wrong, at roughly $500 per year per subscriber give or take a little bit.

LEWIS: You mean in revenue?

KELLER: Yes.

LEWIS: It's not that much.

KELLER: Okay, $400?

LEWIS: Yes, about there.

KELLER: Okay, say $400. When you're looking at a subscriber, let's say five years down the road, what percentage of the total revenue do you think would be derived from the subscriber as opposed to whatever is going to be built on top of that $400? What portion of the total revenue will that $400 be?

LEWIS: Oh boy. I think it will still be a substantial portion. I don't think, especially if you spread that over your whole subscriber base, because not everybody is going to take the internet services. Certainly over a five year period of time we would be happy if 10% takes those other services. On an average I think it will probably still be 75% of your revenue. That is a guess on my part.

KELLER: Do you use that number in your projections for five year out? Or don't you even anticipate using that revenue?

LEWIS: What we do is budget our normal service, or "cable service." Then we are budgeting separately our internet and digital services so that we can keep a good record of what we do there. But we are budgeting our internet services separately. Obviously, you combine it in the end because it's a part of that cable system but we want to see exactly what the internet service will do. We don't do it the way you suggested, we do it separately. I think our projections, for instance in Nashville, at the end of two or three years we hope to be at a 10% level of internet users.

KELLER: We use to call it "blue sky" - those services we couldn't absolutely pinpoint as to what the revenues were going to be. I remember a time when the financial institutions, the bankers and others, would not permit us to use any of the pay television revenue in our projections. Is that still the case today in looking in the future?

LEWIS: They're more open to allowing some projected cash flow. On the other hand, we don't use it for our financing purposes at this point. Because we don't know.

KELLER: You don't need it then probably?

LEWIS: Well, no. We really don't know what those services are going to do. It's just be safe, being cautious. But the banks are a little more optimistic about these services then they were about pay-per-view.

KELLER: Not only pay-per-view but pay television itself.

LEWIS: Pay television. I know. Absolutely, oh I remember that. You couldn't get any allowance for that potential cash flow.

KELLER: Even though we had 100% penetration.

LEWIS: How long did it take to . . .

KELLER: I was going to ask that question of you.

LEWIS: I know they haven't been allowing for that probably more than ten years, if that long.

KELLER: I would be very surprised if it's been that long.

LEWIS: Eight to ten, something like that.

KELLER: It would have to have been more than that. I would say right around twelve or fifteen years.

LEWIS: Hey Jim, we're getting old you know. HBO came into being in what '74 or so on satellite, so yes, it would have to be ten to fifteen years, or something like that.

KELLER: It was a while though before they would recognize that this was going to be a major source of income for us.

LEWIS: Absolutely.

KELLER: Now what do you project? Is your pay revenue going to be 50% to 60% of your total revenue?

LEWIS: It's about 50%. That depends. As we go digital and have more pay-per-view offerings we hope that that will go up. Right now it's probably about 50%.

KELLER: That's not surprising. That's about where I had pegged it also.

Bob, can you think of anything else you would like to add to this oral history before we wrap it up?

LEWIS: Hmm.

KELLER: It's been an interesting travel back through time with you.

LEWIS: The memory does come back with a few things. I am sure there is a lot more back there if I could wedge them out. I don't know. It's been a heck of a ride and I guess I am still riding.

I have enjoyed it and have met an awful lot of neat people in the industry. It's been a lot of fun. There is nothing that I can think of that I would have rather done with my career. Now, admittedly, there were a few times during that career that I wondered what the heck I was doing!

KELLER: We've all felt that way.

LEWIS: We've all been there I am sure. It's been a lot of fun and a lot of hard work. The rewards are generally there if you work hard enough. It's been good.

KELLER: You've been a great tribute to the industry. I think a lot of people would agree with that. By reviewing these tapes and the transcription, it's going to show an awful lot of it. You also will have an opportunity to review this transcript and add, subtract, or delete anything that you might want to.

LEWIS: Well I am sure you will do that too, right?

KELLER: I will also do that.

LEWIS: Because I was going to say between the two of us I am sure we will find some rough spots and we will find some fill-ins that need to be made.

KELLER: But that's not necessarily all bad because its exactly what it is—your remembrance of what occurred. It's not supposed to be a novel or a biography or anything like that.

LEWIS: Sometimes I just wish the memory was little better than it is because it has been a long time.

I will say this. When you mentioned people from awhile ago and who had been important to me, I think I left out something that I have always felt and that is the people I worked with - the associates and people that I worked with. I am talking about down into the systems and that type of thing. That is really where the money is made in this business. I talked about executives that I learned a lot from and all. But, I think one of the most rewarding parts of my career is the fact that there are still a lot of people in this industry that I have been associated with over the years. But also just the pleasure of working with so many of those people and some that are not in the industry anymore. That was always part of what was fun to me. It was always fun to see somebody advance in the company. Be able to promote somebody in the company. Those people to me are some of the most important people that I've ever been associated with. But also that the industry, not just my people, but I am talking about all the people that are out in the field and that handle all the day to day problems and workloads. A great group of people in the industry.

KELLER: The managers are only as good as the guy working with the customer.

LEWIS: Yes, that's right. It's been fun Jim. I've enjoyed it very much. I appreciate you taking your time.

KELLER: Thank you, Bob. This will bring to the end the second session with Robert J. Lewis.

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Paul Levine

levinePaul5

Interview Date: August 2002
Interview Location: Denver, CO
Interviewer: Rex Porter
Collection: Hauser Collection

PORTER: I'm Rex Porter and we're at The Cable Center to interview industry pioneer and publisher, Mr. Paul Levine. Good morning, Paul.

LEVINE: Morning, Rex.

PORTER: Could you start us off by giving us a little bit about your background, growing up days, school days, and your family life, and so forth.

LEVINE: Sure. I grew up in Stanford, Connecticut, which is one of the suburbs of New York City. My dad was a pharmacist, my mom was a nurse. Moving on to college.... . I went to Emerson College in Boston, Massachusetts and got a B.S. in speech, and had classmates like Richard Levy, who was one of the founders of Furby – brought that to the marketplace. Henry Winkler was another classmate, who played The Fonz. It was quite a diverse school, specializing in speech, specializing in the arts and entertainment. From there, I went to New York City and got a job as a page at NBC, started out there giving tours, worked on the Johnny Carson Show. Many funny incidents – I worked election night and got myself in trouble that night, but that's... I don't know whether that's for publication or not, but had a great time, a good six-eight months there. I moved on from NBC, went into...

PORTER: Now what are the dates that you were a page at NBC?

LEVINE: Well, let's go back. I graduated Emerson College in 1968, and I basically started in '68 and I was there just until the early part of '69. And from there I went to work for a gentleman by the name of Phillip Lane, and what he did was he owned a company called Video Enterprises and they placed prize awards on all the game shows. So, my responsibility was to get clients like American Tourister and figure out how many prize awards they'd have on so many different shows. And I also did trade outs with radio stations, like Lucien Bacard watches that they had back then, which was a lot of fun and very enjoyable.

PORTER: Was this for all the networks?

LEVINE: It was for all the networks at the time, right. There was no cable at that point. Whatever cable they had they weren't getting any advertising, but really it was for the radio stations and TV stations that would do the trade outs and the networks were the ones where the game shows were taking place. So we did those projections and it was a lot of fun, a lot of fun.

PORTER: Now, were you married at this time?

LEVINE: No. I didn't get married until 1972, but there were other things I did, like live on Daytona Beach and sell earrings, but I don't know how relevant that is to anything. I took a break. And then I went to work after the Daytona Beach deal in Washington D.C. I was selling land in Arizona and I guess some people call me somewhat of a good salesperson. I remember one of the first sales I went on, it was a colonel. It was a referral from a general, and I gave him a whole presentation, a slide presentation – I know you'll get a kick out of this – and gave him a whole bit about the land, and he says, "I'm driving out there, what kind of trees?" So I took him to the door and I said, "Just like that." And it was in Show Low, Arizona where they just had the fire; that's where the land was. He bought 20 acres and went out and bought another 80, so I guess he believed me.

PORTER: You can see a lot of trees in Arizona. Beautiful trees up there.

LEVINE: His nickname is Johnny Appleseed. Anyhow, from there I went to work Al Warren at Television Digest, and Television Digest, as you know, is the foremost weekly newsletter, and also Television Factbook. I was there several years and then went to work for Bob Tisch at Cablevision Magazine and CED Magazine, and that was 1978, was when I became associate publisher at Cablevision Magazine, in August, and moved out here from Washington D.C. I was associate publisher.

PORTER: Now they were headquartered here in Denver?

LEVINE: There were headquartered here, right, and six months later I became publisher, but to back it up a little bit, I got married in 1972 to my beautiful wife, Susan, and we have three boys. Jeremy's the oldest, and Jeremy and Andy, they were both born in Washington D.C., so they're Washingtonians, and Nicholas, my youngest, was born here in Denver, Colorado, and that was 1981.

PORTER: So he has a state of residency then.

LEVINE: He's a local Indian, or cowboy, depending on who you talk to. So, here I was in 1978 out here as associate publisher in August, and six months later I was publisher of Cablevision and CED Magazine. I think it was about two years later I became senior vice-president of sales of the company, which had ten publications which included Colorado Business and we had another magazine that was the in-flight magazine for at that time Rocky Mountain Airways. We used to call it tailspins because it kept on going down; we thought it was the weight of the magazines. That was an enjoyable time and I left there in 1983, and in 1984 I actually started Communications Technology Magazine, and started that with the endorsement of the SCTE, the Society of Cable Telecommunications Engineers, as they're known today. They thought they had 2,000 members back then and they had three chapters. When I got the endorsement I was at the Texas show with Jim Emerson, and he was on the phone for a conference call with the other board members. It didn't take too long. They gave me the endorsement at that point. That was in January of 1984 and I actually came out with a publication in February 1984.

PORTER: Now was that the only magazine you had at that time?

LEVINE: That was the only magazine I had at that time.

PORTER: But the name of the company that was the parent was...?

LEVINE: Well, we actually had two names. The first name was CT Publications Corporation – was the first name. The Transmedia name came later on. But CT Publications Corp. was the name of the company; Communications Technology Magazine was the first magazine, and the first issue was in February 1984. We had $29,000 in advertising revenue. We were lucky to get the second publication out because what I didn't realize back then was what advertising agencies would do to you. They would collect the money and wait, and the average wait date was 57 days. I had a Porsche back then, so I had to sell the Porsche to make payroll and I remember people getting their paychecks and just basically leaving the building and going to the bank and pounding the checks. I don't blame them; I would have done the same thing except I couldn't afford to leave. But if I look at the first investors that I had, and Rex, you were one of them, I'll never forget calling you and you said, "Go to the bank." I said, "What do you mean?" You said, "Go to the bank, damnit! The money's there." You had wired the money before we were off the phone. You had your bank wire the money. I'll never forget that, and you were my first investor and I had Burt Harris was another investor. Bruce Brown, at the time, who was running Times Fiber, he was the president of that, gave me some money too, the day he was fired from there. I guess he believed in me. And the other original investor was Glenn Jones, and Glenn Jones was a little bit different. Glenn called me up on the phone and he said, "Paul, I have good news and bad news." I say, "What's the bad news?" He said, "Well, I left your business plan on the plane." Well, I was so paranoid, and at that point, so inexperienced on a bunch of different things I said, "You've got to be kidding me, Glenn, how could you do something that?" He said, "No, no, no, here's the good news – it was my plane." So, anyhow, Glenn came in, but what he did with his money, he couldn't give me the whole thing. He had to do another deal. He said, "Listen, I'll give this portion as equity towards the whole deal, but I want this portion going toward advertising for Jones Intercable." I said, "Okay, Glenn, whatever you want." So, those were the original four investors, which included yourself. We started with a circulation of – we printed 10,000, I think we were mailing 9,000.

PORTER: Do you remember your original staff you had on board?

LEVINE: Original staff, original members – Toni Barnett, who was my managing editor on CED originally, and she became my editor for Communications Technology; and Wayne Lazsly was my managing editor; Brad Hamilton was the artist. Rob Stewark I brought on. He called himself a "sales whore". He was a photographer, he used to love photography, and he used to do things with Rocky Mountain News as well. I turned him into a salesperson and he's now publisher of CED, and has been for quite some time. Jim Dixon came in – he wasn't one of the original people. Really, the original people were Wayne and Toni and Rob, if I remember correctly. People came along that were writing for me like Ron Hranac, who at one point was with Jones and then came to work for me as the senior technical writer, and he still is today. Ron did a lot of things, as you know, for research on new equipment, and he put up all those dishes at the Jones building. Bob Luff wrote for me when he was at UA, and that's how Glenn Jones came to know Bob because of his articles in CT and hired him as his vice-president of advertising. So it's kind of a fun way to look at things, and then we had your kind of cute articles on quizzing people, I think it was. What was it? Quizzes by Rex?

PORTER: It was called Cable Trivia.

LEVINE: Yeah, well, same thing. Cable Trivia, Quizzes by Rex. And you used to ask certain things, right? I can't remember exactly, but I remember you used to ask certain things and that's how I got you hooked into the editorial game. You never got over it, did you?

PORTER: No, apparently not.

LEVINE: Obviously you're doing okay.

PORTER: The questions were so old only the old people in the industry knew the answers.

LEVINE: Well, that's the only people who read magazines.

PORTER: And they weren't technical, most of them weren't, so they didn't get the magazine anyhow.

LEVINE: Well, young people don't read.

PORTER: When you set up the deal that you had with SCTE, you set it up so you became the official trade journal of the society.

LEVINE: We got that before we printed the first magazine.

PORTER: In return for that association as the official trade journal, you gave certain things back to the society.

LEVINE: Well, we did several things. We basically provided every member with a free copy of the magazine; we made sure each member got a copy of the magazine.

PORTER: As part of their membership?

LEVINE: As part of their membership, as a membership benefit. I think over the years what people really don't recognize – I did receive the award in 1984 - President's Award – for Communications Technology. We were giving not just the magazine, but we were giving advertising. We also originally printed the Interval as an insert in CT Magazine. It was a small pamphlet size.

PORTER: Which is the society's newsletter?

LEVINE: Which is the society's newsletter, which they send out separately today, and a portion of that is still paid today by Communications Technology Magazine. Back then we printed the whole thing and we put it inside the magazine, Communications Technology. It was part of the package, and in addition to that we gave them advertising, we tried to co-op certain events and things like that, and the other thing that I came up with – Bill Riker would laugh to this day – but I came up with the Cable Olympics, ad what I wanted to do at the first one, and Bill was so serious, he comes back and I said, "Look, I really want them to see everything. We're going to have these Olympics with the guys with different events and everything else. I want a dirt floor in the middle of the convention center, and I want to put a pole up. I want to see pole climbing, and I want to see trench digging." Bill said, "Paul, I don't know if we have insurance for something like that." That was the first time that we talked about it, and I told Bill, I said, "You've got to get these guys more involved at the shows," and things like that, and that's how that whole thing started.

PORTER: You've already touched on the fact that it was hard to meet payroll, especially with the speed that your advertising agencies would send money in, but when you started CT the SCTE was small. You said they thought they had...

LEVINE: They thought they had 2,000 members.

PORTER: They hoped they had 2,000. So the SCTE was not on sound financial footing then, anyhow, and here you are starting a magazine and you're starting it in the face of some relatively giant magazines that had been in business for a long, long time. You left CED and they had been a well recognized and well read magazine. You had magazines like Cablevision and TV Communications and all the iterations. Those had been in place since... actually, TVC had been in place since the '50s. Weren't you a little scared to start a magazine back then? What made you think that you had any future?

LEVINE: You know, that's very good Rex. It brings you back as to why you did something. Here I was in Denver; where was I going next? I have a lot of friends in the industry and I talked to a lot of people. I was at the Western Show, and that was in '83, and I had people come up to me with their checkbooks saying, "I'll buy an ad if you run a book. We really need an engineering book." The fact of the matter was, I was publisher at one point of Cablevision and CED, but what I didn't recognize because I'm not an engineer, never was an engineer, I have a good overview on certain things, but I'm not an engineer and never have been, although people mistake that at times that I know what I'm talking about when it comes to engineering. But I really started talking to people at the Western Show and what I found out was at the time the competition out there, all the competition, really didn't give good stories that really effected the engineering community, gave them information on how to do their job, or gave them information about a certain technology that perhaps could help them within their system – not only run the system better, but to help them save money or make money.

PORTER: And you brought it down to grassroots level, while you kept good quality, high level engineering, lab engineering information, coming to them. I think from the start your format was sort of to intertwine that high level engineering, bring it down to a basic understanding so a guy out in the field could actually apply.

LEVINE: Right. What I wanted to do was, the point was we wanted to reach engineering from top to bottom, and for the top guys they have to manage the guys so they needed more information to give the guys to do a better job with, and we wanted to supplement whatever the SCTE had out there. We were there to support the SCTE. One of the things I always referred to is spokes of a wagon wheel, or spokes of a bike. We were just one of the spokes helping the engineering community, that's all CT was. But within CT itself, we had different spokes that helped the magazine become what it was, which was a training manual in some ways, on a monthly basis, for the engineering community and a way for people to express what they were doing out there in the engineering community. We were pretty successful at it right from the very beginning and our leadership really grew. What was really interesting, as our leadership grew and to this day Communications Technology Magazine is still the largest published trade magazine in the cable television industry in North America – we went from 10,000 immediately up to 18,000 – what happened was the SCTE, the membership started to grow, the chapters started to grow, and today, as then, they were the fastest growing organization for our industry. What is the membership today? 17,000-18,000?

PORTER: I don't know – a little over. Getting close to 20,000.

LEVINE: Getting close to 20,000 at this point in time. And how many chapters or meeting groups – 80?

PORTER: At least.

LEVINE: At least about 80. So, I mean, it has really grown from 1984 and really, this is only 18 years later, and if you look at that growth pattern, it grew very quickly in those few years that it was there. Bill Riker did an outstanding job, and it just grew. Everything just grew. The industry started growing, but the organization was there for the people that they created it for – the BCTE, the certification program, and we were there supplying information for those tests. We were there to supply information for the Cable Tech Expo, the registration kits and things like that, so we did whatever we could to promote the SCTE, therefore we were promoting not only the SCTE and the society, but at the same time the magazine was being promoted along with that, and it was a win/win situation.

PORTER: At the shows, you and I have both enjoyed talking about and participating, at the shows you did some novel things. They were really grassroots – I guess down South we'd call it good ol' boy things – because you had...

LEVINE: I thought I wasn't supposed to talk about those.

PORTER: Oh, sure. That's one of the things that people remember that set CT apart from the other publications and magazines.

LEVINE: Well, one of the people who started this with me was a salesman who left and started another publishing company outside the industry. His name was Woody Sumner, and Woody was out of New York and he was my VP of sales. He was my original salesperson. But Woody and I, when we were looking at doing the magazine, we're at that Western Show, and at the time Brunswick had a bowling alley across the street from the Anaheim Convention Center and Woody and I, we're kind of lost between doing something and not doing anything, so we went over there – got a couple of bottles of champagne – went over and went bowling. And we said, "You know, what a great thing to do. You know, if we ever get this magazine off the ground, let's have a bowling party." Well, we got the magazine off the ground in February and in December of that year we started it. In 1984 we had a bowling party at that alley, and we had it switched to another one because they mowed that one down for a parking lot, but we ended up inviting every single one of the exhibitors, if they wanted to come over – engineering exhibitors because it was an engineering magazine – and we invited the board, the SCTE board, to come over and we had bowling and we started buying... we made our trip to the Knott's Berry Farm and got all those jellies because it was Christmas time coming up. We used to make gift packages – everybody got something. We even had midnight bowling, we turned on the lights... it was a lot of fun.

PORTER: You gave everybody T-shirts so they had something to take away and remember...

LEVINE: I forgot about that. Yeah, T-shirts. Oh, yeah. So they had T-shirts and the first year we did it, the next day we all wore bowling shoes on the floor. So, when we stopped that I was absolutely amazed by the number of people that would come up to me and say, "When are you going to have that bowling party again?" Because I thought it was passé. People just loved it. There was a loyal following, which I'd never really realized. I just thought people came out because it was something for them to do. Really, Tuesday night before the Western Show would open up on a Wednesday, people were pretty much set up at that point in time, and they would come over and just have a good time. They could sit back and have pizza and beer and have bowling, and that's what we did.

PORTER: It was a chance for people to let their hair down at the bowling alley and not have to dress up, and half the fun was you and your staff used to pick everybody up in a van and take them over and bring them back to the convention center.

LEVINE: I'm glad you remember that – I forgot.

PORTER: So it really was a novel idea. It gave people a chance to leave the convention floor and just almost return to normalcy that they would experience at home. So now you've got CT running...

LEVINE: I want to say one other thing about CT. The one thing I think I did that I think is a little innovative on the whole thing is I would not accept any advertising unless there was some engineering involved with the advertising. Most of the time people just took ads because "you got your name, we'll put it up there", and I said, "Look, I'm coming out with a technical publication, so if you're going to put an ad in there that's going to the engineers, make sure you have something about engineering in there, something technical that these guys can relate to. I think that's an important aspect. We did that. There's a few things – we did that, the other thing we did a few years down the road, one thing I recognized was that a lot of these top engineers, even if it was a Chiddix or a Luff or a Tony Werner, along those lines, wanted to give some information to let's say the top management, if they weren't technically involved, or had real technical know-how, they wouldn't know what they were looking at, so what we developed were sidebars to every single one of the features that we were writing, which explained in layman's terms what that technology meant to the bottom line, or at least what that technology would mean to a general manager of a system. And I think those are just two examples of some of the things that Communications Technology evolved to that helped the industry recognize that they were starting to become more sophisticated as well.

PORTER: And another thing that you had a complete understanding with your writers, any writers from the field, is that the articles couldn't be product specific. I've never seen CT take a product or a company and promote their products. They just couldn't do that, as much as that had been a rule with the SCTE.

LEVINE: Right, and Rex, you're absolutely right. That was the original philosophy that's still there today. At least I hope it's still there today, and it's something that I think really set the magazine above anything else that was being published at the time. It was a wonderful, wonderful time and we also, just to mention about technology real quick, we started the magazine as a pay stub. Everything was a pay stub. And now of course, everything's digital. It's just an interesting thing. Not many people realize that, but what was interesting was the transition going from pay stub to being computer and digital and everything else. My original artist, Brad Hamilton, made the transition, but the newer and younger people coming up, if they had a mistake and had to go back and set it, they fixed that mistake and all the sudden there was another mistake. So, it was pretty interesting.

PORTER: Some of your earlier issues took advantage – us being at The Cable Center and doing this interview as well as many others – you also gave the pioneers, although it embarrassed some of us, but you gave us a section in the magazine in certain months, and it was a little embarrassing because you called it the "Dinosaur Page", but I'm hopeful that at some point The Center can make sure that they get those stories, because you got Len Ecker's and the real old-times – Ben Conroy and Richard Schneider and these guys wrote stories about the '50s and '60s when cable was first getting started, and they were very interesting and very unique articles. You just always seem like you had an innovative idea for different segments of the industry so that even though they might not be engineers in the field, they had something to say about the history of engineering or making engineering more important to the industry, and you made that a part of CT. So, now you've got CT up successful, you're struggling, you're finally making your payroll. You have no Porsche, but...

LEVINE: I have no Porsche... that came actually right at the time when I went crying for help to Gene Schneider. Of course that was United Cable, at the time. Gene helped me out a lot. I mean, Richard was helping me out technically, Gene was helping me out with money, and I pulled up one time for a meeting with him and I was driving my father-in-law's... because I had to get rid of the Porsche, right? So my father-in-law had passed away and he left us his car, which was from Pittsburgh, Pennsylvania, and that was a '71 classic Camaro, and I got so mad at it one time because it didn't have springs that I kicked it and my foot went through the car. But anyway, you can imagine what a rust bucket it was, and Gene says, "What's this?" I said, "Well, I had to sell my Porsche." I think his jaw must have dropped at least a good six inches. Anyhow, Gene helped out and basically that was also based on not just Communications Technology, but we launched at that time something called the Tech Almanac, Communications Technology's Tech Almanac, and that was like a buyer's guide. If you go into a car parts store and you want to look up a car part? It was based on the same principle of looking up parts within the cable industry. Two things really happened off of that, and I went to quite a few people, not only Gene but Monty Rifkin, very pragmatic people, and taking a look at it he said, "Well, Paul, even if you sell it for this, you're still going to make good money on this whole thing." Well, I didn't realize how long it was going to take to get up and running, and secondly, I really didn't know the computer age was coming, and knowing what I know now, obviously, it's something that should have been put on the computer rather than on what we were trying to do.

PORTER: But at that time everything was in catalogs. It kept a guy from having to have shelves and shelves of separate catalogs.

LEVINE: Right. I mean, the idea was good, and we were selling some copies. We sold like 384 issues, if I remember correctly, but the day we decided to close it down was the day I got the U.S. Navy contract. I was trying to get the government contracts because what people don't realize is they have bases throughout the world, but they entertainment segments, communications segments, and they need supplies and equipment as well to man those various bases, and finally I had to go through all the government regulations and what have you, and the day we closed it down they called us up and said, "Okay, you guys can start selling to us."

PORTER: Well, you'd be proud to know that that Tech Almanac is downstairs in The Cable Center and is prominently displayed down there.

LEVINE: I'll have to see that. So anyhow, we went through that phase and we didn't make money, but we didn't lose money on that. It's just something that wasn't going where we wanted to go at the time, and so it was time to get out of it. At the same time we were looking at that, I started looking at the international market place and I talked to... the closest ally we had was the U.K. with their SCTE. Their SCTE was entirely different from what's over here. It was really more for the top engineers rather than for all facets of engineering. Anyhow, I started looking at it and I was thinking that the international market place has grown. I started seeing where people started doing things on an international basis. ANTEC was looking at that.

PORTER: Jerry Pruzan was over there.

LEVINE: Jerry Pruzan was there, but also I talked to John Dolcrest who was with General Instruments, as it was called at the time, and John was a big proponent. He said, "I really think that you need to come over here." So we started off the International Cable Magazine with just a UK distribution besides the United States, and we actually inserted their newsletter, the SCTE newsletter – the same concept and everything else. What we didn't realize was that we had to be very careful because it was going to the UK as well as the United States, and there was another world out there and there were a lot of people that wanted to be associated more on a global basis, not to be associated just with the UK and the United States. So we had to make sure the writers were from different parts of the world and we were going to different shows. We created the Brazil show that was very successful and we started to get real well-known internationally. I was invited to give some talks over in Beijing a couple of times. We became the official publication in China. I was in Taiwan a few times. And those were the things that really started to bring a lot of recognition to the International Cable Magazine. Where it was interesting, the International Cable Magazine wasn't as technical sometimes as what we had at Communications Technology, so we started developing also a readership in Communications Technology more so on an international basis. People wanted both. International Cable had more of an international flavor. So that grew very fast as well. It grew up to about 15,000 circulation.

PORTER: And this is about what year, now, that we're talking about?

LEVINE: 1989 is when I started that. It was five years later, and at that point in time, when I had International Cable, Paul Maxwell and I became partners and put our companies together and we looked at other acquisitions, which was interesting. The investors at that point, because United Cable – I guess it was at that point that United Cable was involved with United Artists, so Gene's board wanted him to get out of anything that had nothing to do with cable systems. So my new partners were Paul Maxwell, Terry Elks and Ken Gorman, with the Apollo Partners out of New York.

PORTER: Now this is Transmedia?

LEVINE: Now this is Transmedia Partners, and Paul and I just bid on something and it didn't work out. Actually we bid on Multichannel News and Cablevision and CED and we lost out to another company. We were out to lunch, and about the third bottle of wine I turned to Maxwell and I said, "You know, people aren't reading the way they used to read." You've got to remember, this is 1990. "People aren't reading the way they used read. They want things quicker, they want it faster. Why don't we mess with people's minds?" The fax machine was coming out then. I said, "Why don't we come out with something with a fax for the cable industry?" Max turns to me and says, "I thought of that three years ago." He says, "Yeah, we can call it CableFAX." And that's how CableFAX was born, and to this day it's the longest running business fax in the United States.

PORTER: Officially known as CableFAX Daily.

LEVINE: CableFAX Daily. And we came out on April Fools Day, I'll never forget that. And Max had a penchant for coming up with things to give away. He was very good at that. We came up with this dog called Scoop, had a little hat on it with a little CableFAX underneath his chin, but what we did, and it's something that I really worked on, we did a couple of different things, which is, I think, interesting. One is we worked with the secretaries because we wanted everybody reading this thing. So, we got a form and we got it qualified by our auditing system, which is the BPA, that's the auditing bureau for this thing, and they'd never qualified a fax, to the point where the president of the BPA – and they do thousands of magazines and books and things like that – came out to visit me and sit down and actually qualified this form that said people wanted to receive CableFAX because they were going to fax it back to us. What we did was we sent the form to the secretaries and said, "Put down whatever names you want this to go to and please sign it and send it back to us." That's how we qualified our circulation for our advertisers. And CNBC was one of the first advertisers to step up; they took a years contract with us and paid us upfront, and we were off and running. It was hard to sell... we came up with a price of, I don't know, $150 and then it was $50, and then it was get three issues free, but it caught on and became a very productive piece. People are reading it to this day, and it was a lot of fun to start that up.

PORTER: So you're running along now and you've got a multi-faceted company with publications and fax publications, so you've got probably the state of the art at that time, with fax because everyone was still using the fax, as you said, not many people were using the Internet. And this is now into the '90s, the early '90s.

LEVINE: Right.

PORTER: What happens... now we know that there comes a time where there are other people interested in your company as far as acquiring it and so forth. Is that about this time span?

LEVINE: 1993. It was Philips International, Publishing International, that was interested. Actually they came to us in '91. They wanted to buy us back then.

PORTER: Now they're out of Potomac, Maryland?

LEVINE: Out of Potomac, Maryland, and Tom Thompson was the president at that time and Tom Philips was the chairman, and Thompson wanted me to move to Washington D.C. at the time, and I just said to him, I said, "I have no plans to move back to Washington D.C." And basically it went by the wayside. In '93, at that time, Terry Elks and Ken Gorman wanted to get out, and I got in touch with... I just got through going through a cancer related illness and at that time we just wanted to see if someone was interested in the company, and they wanted us even worse than before, to the point that they said, "No, Paul, you can stay in Denver. I know the need of a Denver office. We just want to buy the company." So, at that point in time, Communications Technology and International Cable were separate from CableFAX. Paul Maxwell and I had split off just prior to that to where he took CableFAX and two other publications and went one way, and I had Communications Technology and International Cable and we took it to Philips, and not too far down the road from that, after they acquired us, Maxwell was looking at some help and seeing what we could do with CableFAX, I got him to sell CableFAX to Philips, and they made him a very good offer. Of course, he's still writing for it today.

PORTER: So you stayed around with Philips during the transition period?

LEVINE: In '93 they gave me also a five year contract to stay with them, to be the senior publisher – founding senior publisher, whatever, titles, it changes by the day. But I stayed with them over the five years, past the '98 cutoff date to about '99.

PORTER: And about this time, similar to your and Paul's, or whoever came up with it, but apparently to put it in action there were two of you, seeing that the state of the art was the fax machine, now you develop an idea that's inline with the data side of the business. Would you care to go into that a little bit? Because it really was your idea, I was around and I can remember us discussing...

LEVINE: 1995. I wrote a business plan that was called InterCable, back then, for Philips, utilizing basically the Internet, and it really relates back to what happened with the Tech Almanac, realizing that the Tech Almanac at that point in time should have been on the computer. So I wrote a business plan and included a site that would include not just specifications of equipment, but it would include the CableFAX, CT, International Cable. It would include information that was pertinent to the cable industry. It would include marketing information, data that they can use above and beyond the specifications. Specifications catalogs, that was a separate button, so to speak. So I wrote it back in '95 and in between running the magazines and everything else, it was something that Philips wasn't ready to throw themselves into, or had a hard time understanding.

PORTER: And to think, one of the problems that you and I discusses, even at the outset, the opportunities were so limitless that it was hard to tie it to a specific avenue because once you put it onto a website and put it on the Internet, it had unlimited uses.

LEVINE: Right. And the fact of the matter is the engineering community, which I really probably am closer to than any of the other facets of cable, quite frankly needed their information quicker, faster, and easier. If you go into some of the – probably to this day – some of the MSOs, they have catalog rooms you walk into and if they have to look up a piece of equipment and compare it to something else, it's a chore. I really looked at trying to make it easier for that particular community as part of that specification situation, and that was the key to everything that was there. At one point in time, when I was doing this whole thing, there were a couple of operators that were ready to step up with huge checks just for me to start doing it, but it wasn't everybody. So if it wasn't for everybody I couldn't take one from one and not to it all the way down the road. Anyhow, what happened was the Internet started to become more prevalent, companies started to create their own sites, and Philips needed to have some kind of an Internet site, and Maxwell came back and was talking to them about it. We basically started BigPipe, which included all of the above of what we talked about, and it came at a time that we were trying to build it and it really got out of hand in some different ways. We had the original investors were Philips, Motorola and Gemstar, but along came September 11th and the economy and Motorola had a lot of layoffs, as well as Gemstar.

PORTER: As well as everybody.

LEVINE: As everybody. And it's hanging in there. It's still up today and it's still being viewed, but it's not everything it could have been.

PORTER: But at some point when the economy – he said as he crossed his fingers – when that straightens out, once again, its uses really are unlimited.

LEVINE: It is. I think it's something that's there that's of tremendous value that can be utilized. Depending on which way the economy is going to turn, what they're going to do, I think that the site can be of tremendous use.

PORTER: So in the meantime, with all of those cutbacks, just like every industry in the United States, you've gone away from that for the time being.

LEVINE: Right.

PORTER: I don't want to get into your personal business, but you've got a few irons in the fire going forward. We'd like to see you back in the cable industry, but probably you're more well-known throughout all of the segments of the industry. There are a lot of guys that are known from the programming side, and there are a lot of guys that are known from the operations side, and there are a lot of guys that are known from the engineering side. You're probably the only guy who could go to any segment of the industry, the operators from the top CEO down, would all know who Paul Levine is. The engineers certainly would, and the programmers always felt like you were one of them anyhow, because you've worked every side of this industry. There are very few people that can say that they've done that.

LEVINE: Well, thanks, Rex. I know a few people here and there, and it's always been a lot of fun. I've been very fortunate in the sense that I've had some outstanding people that have always been there for me, you being one of them. I talked about Gene Schneider, John Sie, Tony Werner, Bill Bresnan. A smile comes to your face when you start thinking of all these different stories. I've also sat on the board of trustees for many years with the Kaitz Foundation, so most of the people on that particular board are either the MSOs or the presidents and CEOs of all the programmers. This is one of the things that they support, and as you know, the Kaitz Foundation is for...

PORTER: And you went into the Cable Pioneers in what?

LEVINE: '96, in Los Angeles at the Peterson Museum. You don't forget, you know? You don't forget. Even with the Kaitz Foundation, everything that I did... I printed the programs for years for the Kaitz Foundation. They did the cover because they always wanted the artistic thing, and I did the inside. The sold everything and kept the money. (LAUGHER) But we had fun. One year, I'll tell you, when it originally started, Maxwell and I brought wine, when it was small. Now you go and it's 2,000 of your closest friends. So, that's a real source of pride for us in the industry. That and C-SPAN. Brian Lamb used to be western bureau chief for our Cablevision Magazine. You think back to all these different things. Paul Fitzpatrick, who used to be my editor-in-chief, became president of several different things including the Golf Channel, and he was president of C-SPAN when Brian was chairman, he still is chairman. I can go back to... well, I won't tell you one story.

PORTER: Well, I'm sure that now that we're at the end of the interview you'll remember in the next 30 minutes 47 stories you can tell me.

LEVINE: I don't know if I should spend that much time on camera though.

PORTER: Maybe we'll do a part two one of these days. In the meantime, I want to thank you for joining us at The Cable Center today. I've enjoyed the interview. I hope I haven't stepped on your toes as you've tried to tell your story too much. I just tried to keep you moving.

LEVINE: It's hard when you're sitting here to remember everything. I probably left out a lot of different people.

PORTER: At our age it's hard to remember anything. Anyway, thank you for your time, I enjoyed it.

LEVINE: I did too.

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Nathan Levine

levineNathan5

Interview Date: Tuesday January 13, 2004
Interview Location: Dallas, TX
Interviewer: Paul Maxwell
Collection: Hauser Collection

MAXWELL: I'm Paul Maxwell with The Cable Center and this is part of the Gus Hauser Oral History Project for The Cable Center. Today we have Nate A. Levine of Dallas, Texas and somebody I've known for damn near 30 years, I guess.

LEVINE: Damn near.

MAXWELL: What got you into the cable business, Nate?

LEVINE: I had to make a living.

MAXWELL: Couldn't do it otherwise?

LEVINE: No other way, right.

MAXWELL: So what brought you to it, though?

LEVINE: Well, I started going to electronic school in New York at a school called the RCA Institute of Technology when I got out of high school, and I got interested in electronics. When I graduated cable was just getting started.

MAXWELL: So when was that that you graduated?

LEVINE: It was around 1960, and a friend of mine by the name of Ken Distel was working with a guy called Dave Weiner in Ellenville, New York, and they were building a cable system. It was probably the first or second cable system in New York State. It was an area that didn't receive any television at all. It was right behind the Shawangunk Mountains and 100 miles from New York. It was a completely dead town of about 10,000 homes. The interesting thing was it was also the headquarters of Channel Master Corporation, which was the largest antenna corporation in the country and you couldn't receive a darn thing on one of their antennas. So, we got interested in cable and I got working with Ken and started wiring the town and working there weekends and summers, and got a little interested in cable. Then I finished school and I went on and got a job in a neighboring community in Sullivan County, and again, the people that I was working with wanted to go into the cable television business. They didn't know a great deal about it and they asked me if I would join them and we formed a little company called KLM Video and we wired a little town up in Sullivan County called Woodburne, New York.

MAXWELL: How big was that town?

LEVINE: That town had about 500 homes, very small. We hooked everybody up.

MAXWELL: What did you bring in? Three channels?

LEVINE: No, we brought in seven channels at that time, and later converted it to a 12-channel system. At that time cable was starting to come into being. I worked there and fixed televisions and worked on the cable system and owned a piece of it. And then I ran into a fellow by the name of Alan Gerry, his own cable system about ten minutes away, and we got to be friendly and he said, "You know, Nate, I'm expanding my business and why don't you come work for me?" I said, "Well, I own this little cable system, or a piece of it, down here." He said, "Well, I'll buy that and you'll come work for me." He was a good salesman, and I did. I ended up working for Alan.

MAXWELL: How long did you work for Alan?

LEVINE: I worked for Alan for about five years and actually ran his service center. He had a big TV repair and appliance service center, it was the biggest in that area, so I ran that department and also oversaw the cable operation, as well. It was small town; we only had about a thousand customers, so the big part of his business at that time was really selling televisions and appliances and so on. But then that business started to deteriorate and Alan decided that he needed to expand this cable business. He wanted me to stay on with him but I never thought it would really grow as big as it did in that part of the world. So I saw an ad in the paper for a field engineer for Jerrold Electronics in Philadelphia and I applied there, was hired and moved to Philadelphia.

MAXWELL: Went to work for Milt. Was he still there?

LEVINE: I went to work for Milt – Milt Shapp was there at that time, and Bob Beisswenger was there, and Lee Zemnick was there. I got a job as a field engineer and it was very exciting for me because I hadn't traveled a great deal and this gave me an opportunity to really see the world and travel all over, and being a rookie, the first jobs they gave me were really, really terrible – Devil's Lake, North Dakota in the middle of the winter, it was 22 below zero when I got off the plane.

MAXWELL: At least there was a plane that went there.

LEVINE: Right. I always said I'll go to Bismarck and I'll take a dogsled the rest of the way, but I prevailed and then I was in Chambersburg, Pennsylvania, which was also very cold, and then I got a great assignment and that was being the lead engineer on the system for LBJ in Austin, Texas, and that was right after Kennedy had been shot. He was elected President so there was a lot of hoopla about that job. I stayed down there approximately about six months, met the President, went out to the ranch and out to his headend site.

MAXWELL: So was Pat Nugent running the...?

LEVINE: Pat was there, right. So we built that system for LBJ and it got a lot of press.

MAXWELL: Yep, it did. I think in some of the magazines I had back then, too.

LEVINE: I met him a couple times and he was something. People were scared to death of him, he was something else. I remember one thing... he had great big ears, you know...

MAXWELL: Very big ears. I knew him fairly well.

LEVINE: Did you really? And his language was very salty.

MAXWELL: To say the least.

LEVINE: He was something. So that's how I got started working for Jerrold. I stayed on the road for Jerrold, I don't know, two, three years or so, and then I got engaged to my wife, who's been with me now close to 40 years and hopeful we're going to make it another 40. She said, "Gee, you know, I don't mind you traveling but if we have a family it's going to be a little tough." Jerrold was a real nice company to work for and I said, "You know, I'm getting married and I'd really like to get off the road," and they said, "Alright, you've been with us awhile and have done a nice job. We'll figure out something else for you." And they did, and we moved to Harrisburg, Pennsylvania where they were putting in this big system. We stayed there for six months and then they promoted me to chief engineer and I moved to Philadelphia. So that was exciting. I'd never lived in a big city before and here we were with a big major company, a public company, and I was chief engineer of operations – kind of exciting.

MAXWELL: So how long did you do that?

LEVINE: I stayed with Jerrold until they sold their operating division. They sold it to Sammons Inc. I believe it was 1974. I said to Ann, "How would you like to move to Dallas, Texas." I figured she'd say no. She said, "Dallas, Texas! I've always wanted to live in Texas. Let's go!" I said, "No kidding?" We sold our house and next thing you know here I was in Dallas, Texas and Mr. Sammons offered me a job with about three or four other people from the company. I was now vice-president of engineering for Sammons. A lot of promises – we were going to go public and I was going to be a rich fellow, and all that. It was exciting from the engineering end, and it was exciting moving here to Texas. Nice people.

MAXWELL: Cable systems were what? How many channels then?

LEVINE: They were 12 channels at that point. Bill Karnes, at that time, was the president and he hired me and he hired Jeff Marcus, and that's how I got to know Jeff.

MAXWELL: Right, I remember well those days. I used to visit down here to write about things you guys were claiming to do in building systems. So how big did Sammons get while you were with them?

LEVINE: Sammons was about 350,000 customers, but what happened, what was interesting is that Jeff and I were at Sammons and we'd been there, oh, I don't know, three or four months, maybe, maybe five months, and we were going to go public. We had all the prospectuses all printed up and we all went to New York for the interviews with Wall Street and all that. We were going to come out at $15 dollars, I remember, and then the price went to $13 while we were there, and then the next day they said they couldn't do it at $13, they might do it at $12, the market started to go, and then it was down to $10 and Mr. Sammons got very annoyed, I remember. We'd spent, I don't know, a million dollars to put the thing together and he killed the deal. He said, "Nope! We're not doing it. We're not going public. We'll just go home." And we did.

MAXWELL: So what year was that, do you remember?

LEVINE: It was probably about two years after I started, so that would have been approximately 1975. So we stayed private and then an interesting thing happened – when the auditors did the books they found that the numbers that we'd had weren't quite the way they should be. I think we were depreciating things and that should have been written off and the numbers when you really put them together probably weren't as good as they should have been. Had we gone public it would have been a disaster, so Mr. Sammons was very angry about the whole thing and fired just about everybody in the company except for Jeff Marcus and me, just the two of us. He fired Bill Karnes, the president, the operations vice president, and the vice president of finance. He left a few regional managers and Jeff and I. Neither one of us had every run a company and so I was still vice-president of engineering and Jeff was vice-president of marketing. We both got a bright idea: why don't we go see Mr. Sammons and convince him that we ought to run the company. Not we together, just I should run it and Jeff thought that he should run it. So I called Mr. Sammons and told him I'd like to come down and see him. He said, "Oh, come on over, Nate." Going down the hall I passed Jeff. He was just coming out of Mr. Sammons' office. He had the idea, also. So we chatted, Mr. Sammons listened to me and said he'd let us know. About three or four days later he called me back and he says, "Nate, we're not going to make you president, we'll make you executive vice-president because you seem to have the background and you know the old Jerrold systems. I hope Jeff stays on," and all that. He liked Jeff, too, a great deal. So I became Jeff's boss, and so the two of us sat down and I said, "Jeff, we've got to put this company back together." We did. We got it back together and got it running.

MAXWELL: Talk a little bit about Mr. Sammons. He was a bit of a larger than life character around here.

LEVINE: He was. He'd started in the Depression selling insurance door-to-door for I think 25 cents a month, and collecting door to door. He always told the story of how he ran out of gas in North Dakota and almost froze to death in his car. He slept in his car for two or three days in a big blizzard and he was barely alive when they found him, but he prevailed and kept on selling insurance and he turned it into one of the largest insurance companies in the state of Texas. He invested into other things as well. He invested in the Jack Tar hotel chain and built three or four large hotels. One is still out there in North Carolina, and one in the Bahamas. He owned a lot of real estate downtown, he owned a distribution company, United China and Glass and Briggs Weaver, a distribution company for machinery.

MAXWELL: He owned it all himself, too, right?

LEVINE: Yeah, he didn't like partners. He owned it all himself. He was worth, at that time, over a billion dollars. A very conservative guy – he didn't like to spend money on anything that was not necessary. In fact, I remember one story where he had just bought a new suit, and it was a dark suit, and someone said to him, "Mr. Sammons, why'd you buy a dark suit? You have a dark suit." He said, "Well, to tell you the truth, if I'd bought a brown suit I would have had to buy a brown pair of shoes." So he bought another dark suit. That's the way he was. He was a real gentleman but very conservative. I remember having lunch with him one day in a restaurant and I picked up the check because he never carried any money and I left a two dollar tip for the girl and he picked up a dollar and gave it back to me, and said, "Now, you'll ruin the waitress." And it was his restaurant! That was Mr. Sammons. He was really a legend in his own time.

MAXWELL: Yeah, he was. You're running the company then, but just as an EVP.

LEVINE: Right. I'm running the company as an EVP and Jeff is doing the marketing and we're hiring some new accounting people, and most of the regional people stayed on. The company was doing quite well. Then they decided, after four years that they may want to take the company public again. I don't have that background coming from the engineering. I was lucky to get the job as executive vice-president. I didn't have the background to take the company public and so they figured they'd bring in some hotshot guy that knew the finance area and they did. They bought a fellow in by the name of Jim Whitson, and they made him the president, and that was okay. Jim was a bright guy and I enjoyed working for him. We never went public. Shortly thereafter, Jeff left. He saw that he'd gone about as far as he could go and he got a job with TelePrompTer, as you know, and the rest is history. I stayed on probably another couple years and when I reached 40 I decided, perhaps it's time for me to do something on my own also. I noticed that people in companies, if they reached 60 or even less, many times end up without a job, so I just felt I didn't want to be 50 or 60 years old and be down here in Texas not having a job. I thought perhaps it's best to just leave and do something on my own. I didn't know exactly what it was going to be but I was going to do it. I checked with my wife to see what she thought – she had a lot of confidence in me – and she said, "Nate, I don't know what you're going to do, but whatever you do you'll probably do fine. So you go ahead and do what you need to do." That was all the inspiration I needed. I went in and resigned. Then I went home and tried to figure out what the heck I'd done.

MAXWELL: That's a big step, though. You had a family.

LEVINE: I had a family and a boat, two cars, three kids. Fortunately, Ann went to work. She started selling real estate and she did okay until I figured out exactly what I wanted to do. I didn't realize how tough it was to leave a company and start out on your own. It was lonely. I didn't realize how lonely it was. I had no staff, and I'd had a big job with a secretary and the Wall Street Journal on my desk every morning, and now Ann went off and went to work and I just sat around and watched reruns of Perry Mason. I tried to get my act together and figure out just what is it I'm going to do with a limited amount of capital. I probably had about $12,000 to my name, and it was very scary. Very scary, indeed.

MAXWELL: So how'd you come up with the idea for the business that you did start?

LEVINE: Well, it's interesting how things work out. I met a fellow while I was with Sammons, met him at a New Year's Eve party. He drove up in this big Lincoln and his wife had a mink coat and he was dressed in a double-breasted suit – he looked like a million dollars – and his name was Stewart, and I said, "Stewart, what do you do for a living?" He said, "Well, I'm in the collection business." I said, "Really? What do you do? You go out there and beat up people?" He said, "No, we just collect some money for doctors and dentists and so on, send them some letters and tell people they ought to pay their bill or they're going to get in trouble with the credit bureau and so on." I said, "Really? Well, could you do that for the cable business?" He said, "Well, we've never done it for the cable business. Do you have some bad debts in the cable business?" I said, "Yeah, they're small, they're only about ten dollars." He said, "Well, turn them over to us and we'll see what we can collect." I did and I noticed that he was collecting some money.

MAXWELL: It works!

LEVINE: It worked, and it didn't look like it was a lot of work sending out some letters. I said, "Gee, I can do that." And you didn't need a lot of capital. I knew a lot of people, since I'd been on the board of directors at the National Cable Television Association and had a lot of friends in the business. I put together a series of letters and a business plan and went on the road with a package telling people how much money I was going to collect for them on all these bad debts that they had written off. I remember my first call was up in Tulsa, Oklahoma where Gene Schneider...

MAXWELL: United Cable, or was it LVO still?

LEVINE: It was United Cable. I remember I waited and waited to see Gene. I didn't realize what it was like to be a salesman, you know, you have to sit out in the hall and just wait for somebody to say, "Come on it, I'll give you three minutes." I spent a thousand dollars to fly up there in a snow storm and rented a car, almost broke my neck to get there, and I'm waiting and waiting. Finally I got in to see Gene. He was very nice. I told him the story about the collection business: I was going to collect a lot of money for him, how it was going to work, and he looked me straight in the eye and he said, "Well, it sounds like a good idea, Nate, but who are you doing this for?" I didn't know what to say. I said, "Well, I'll tell you the truth, Gene, you're my first call." He said, "That's nice. That's honest. That's an honest answer; I like that. I'll give you twenty systems to try it out on." He did. "Well, this is easy," I'm thinking to myself, "This is an easy sell. I'm just going to go off to Denver now and visit all the MSOs there." Monty Rifkin and John Malone, who I had known. While working at Jerrold I'd met John. He was working with McKenzie at that time, so I got to know John a little bit and always like him. Every place I went they said, "Well, let's see how you do with Gene. Come back and see us." So I did. It took about four months before I had any results. The first year, I remember, I made $800. That was my W-2 - $800. Fortunately, like I said, Ann was working. But then the business also started to grow. We started to get some volume and so on. Then I decided - I probably should get back in the cable business because I really know that better than the collection business. I'd been in the cable business all my adult life. I thought, well, maybe I could get a franchise some place and raise some money. So I put out the word that I was looking for some franchises and let people think that I had a lot of money. I didn't have a lot of money, but they didn't know that, and sure enough, Hershel Tyler – remember Hershel Tyler? Hershel Tyler invented the weather scan, right? He had a franchise in West Lake, Louisiana, and it was interesting how he got it. A fellow by the name of Bill Green actually got the franchise, and he didn't know what to do with it. He was a bandleader, and he met Hershel and Hershel said, "Bill, you give me that franchise and I'll give you 10% and I'll build it." Bill said, "Okay, it sounds like a good idea. I don't have any money. I'll do that." So Hershel sat with this franchise and then he ran into me and he said, "How would you like to buy a franchise?" I said, "Really? What have you got?" He said, "West Lake, Louisiana. I'll sell it to you for $100,000 and Bill Green comes with it." I said, "Okay." Bill didn't know what happened but Hershel made money on this deal, but maybe Bill didn't care because I ultimately did build the system. So I signed a note for $100,000 and I said, "Well, Hershel, I don't really have any money right now, but I'll have some in 30 days I'll buy it." So I signed the note and then I got home and I got thinking, "Well now I need to raise some money. How am I going to do that?" So I put together a little business plan that showed if we built this cable system we could make some money and maybe I could raise the money by getting some investors. So I got all dressed up again, put on the one suit that still fit, and I went on the road and I visited with some people. The first call I made was Dow Lohns and Albertson, the law firm that had represented us when I was at Sammons and also with Jerrold, so I knew the people there and I told them I had this franchise in West Lake, Louisiana and I needed some operating capital. If they would invest a half a million dollars, I'd give them half the deal and they'd make a lot of money. We talked about it for a couple hours and lo and behold they wrote me out a check for half a million dollars on a franchise I hadn't even bought yet and didn't have any money to finish it or anything else, but they had a lot of confidence in me. I said, "Well, I'll give you the tax benefits, and if I don't get this thing built in six months I'll give you back your money." They said, "Okay, that's fair enough. We know you, Nate, and we have confidence in you. We'll give you a try." So I left with a half a million dollars that day. I called Ann and said, "Hey, guess what? I've got half a million dollars. Let's go to Mexico." So I had the half a million dollars and I put it in the bank, but I didn't have enough money to build a system and the banks wouldn't loan me any money.

I was at a convention shortly thereafter, and was sitting at a bar and as fate would have it there was a fellow sitting alongside of me and we get talking. I said, "What's your name?" "Walter Corcoran." I said, "What do you do, Walter?" "Well," he says, "I'm president of Magnavox Credit." I said, "Really? What's Magnavox Credit do?" He said, "We loan money out for broadcast companies, TV stations, cameras and equipment like that." I said, "Well, did you ever think about doing anything in the cable business?" "Not really," he said. "Well," I said, "I've got a half a million dollars and I've got this franchise and I need about 3 million dollars to finish it out. Do you suppose you could convince your company to go in the cable business and lend money to the cable industry?" At that time Jimmy Carter was in office and I think interest rates were 20%.

MAXWELL: The inter