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Clive Runnells

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Interview Date: Monday January 12, 2004
Interview Location: Houston, TX
Interviewer: Paul Maxwell
Collection: Hauser Collection
Note: Video not available at this time

 

MAXWELL: I'm Paul Maxwell, and I'm here with Clive Runnells to participate in the Gus Hauser Oral History series for The Cable Center. We're talking to Clive in Houston, and it's January something, the 12th, I think.

RUNNELLS: January 12th.

MAXWELL: Clive, I wanted to ask you the first time you remember television.

RUNNELLS: The first time, basically, I remember television, I'd moved down here from Chicago. I was working in Wilson's Supply Company, and this was out on Maury Street. I was working in the backend of the pump department and across the street was a café called Wilson's Café, no relation to Wilson's Supply Company, and every morning after you had your coffee, or during coffee, they had a discussion about what they saw on Channel 2 the night before.

MAXWELL: It was the only channel in Houston?

RUNNELLS: The only channel in town.

MAXWELL: So what year was that?

RUNNELLS: About 1951. So that's the first year I knew anything about television, and of course I got a ratty old set after a while and watched it, too.

MAXWELL: So what then got you in the cable television business?

RUNNELLS: Well, I'll explain it very simply. In 1955, I think it was, I'd left Wilson Supply Company to do things on my own, and a friend of mine's uncle asked me if I'd be interested in helping a group that had bought the cable system in Williamsport, Pennsylvania.

MAXWELL: A long way from home.

RUNNELLS: It's a long way from here, and I said, well, I don't know, but let's go talk. So I did, I went to talk to one man named George Bruce, who was the uncle of my friend, Buster Vandergord, and then to Aaron Farfell, who was more or less ram-rodding the group. The group were all people older than I was, and I had no experience in cable television at all. So I said, okay, I'll go up and take a look. So I went up to Williamsport, and when you went to Williamsport in those days, you went from here, you went from Houston to Idlewild, not Kennedy at that time, Idlewild, and then if you had a little money you took a helicopter from there to Newark, and then got on Alleghany Airlines, a DC-3, and bounced over to Wilkes-Barre, and then on to Williamsport. You landed in Montoursville. So I landed, not feeling very well after bouncing around.

MAXWELL: DC-3s were great.

RUNNELLS: They were something else. And Ray Schneider was the resident manager, and Ray was a fellow who had, I think, gone to college in Williamsport, Lycoming College, played a little football. The people who had owned the system before were the G.H. Whitney & Company people, and Jerrold and Milt Shapp at Jerrold Electronics, and the two guys were very nice guys. One's still alive, one's dead. They were both Ivy Leaguers, they'd gone to Princeton. I happened to be an Ivy Leaguer also, and I'd gone to Yale. Ray wasn't sure whether he really wanted to have another Ivy Leaguer as his boss, but I was a different type of Ivy League because they lived in New York City and I lived in Houston. So, that evening we sat and had, I think, about three or four martinis a piece and agreed to agree. We looked over the system and saw what was going on. At that point you were charging $3.50 a month to retransmit the signals off the top of the mountain, and then we paid Jerrold either 15 or 25 cents royalty fee for using their equipment that you had bought.

MAXWELL: One of Milt's smart moves.

RUNNELLS: Right. So that was my introduction, and I stayed with that... That was the days also you could invest in a company, as I recollect the tax laws were that when you sold a capital asset you did not have to recapture your capital gains so you could depreciate the company, which this group did, and I at that time was allowed to buy a small percentage. The most anybody had was 10%, and so we kept the company until 1960 when it was sold. It was sold to... Charlie Glatt represented them, a wonderful, wonderful guy, and Murray Cantor was involved in it. In the meantime though, when I first got up to Williamsport and I looked at the pictures, they were so bad. They were so bad you could not believe it. The cable line ran down the mountain and it absorbed all the moisture, any rainfall and anything, you could take a knife and stick it into the cable and water would run out. So one of the first things I did, I told Ray we had to go ahead and replace that cable, and it was expensive, so the first year we didn't make our payments because we were rebuilding the system. They were all tubes – God knows how many tubes you had in there, but they were all tubes – and they were RCA tubes and they went out quite often, too. So that was my introduction to cable.

MAXWELL: Do you remember how many subscribers Williamsport had?

RUNNELLS: We were the largest system in the country at the time under one headend. I think we had about 6,000, something like that.

MAXWELL: That's early '50s still.

RUNNELLS: That was middle '50s, '55 to 1960.

MAXWELL: How big is Williamsport today?

RUNNELLS: I have no idea.

MAXWELL: No, I don't either.

RUNNELLS: After we got done I didn't go back for pleasure reasons or anything, but I remember how bad the hotel was.

MAXWELL: It was probably one of the old downtown ones.

RUNNELLS: The Lycoming Hotel.

MAXWELL: Well, it was Lycoming College, right? So what was the next experience with cable? You sold that, and I presume came out okay.

RUNNELLS: Yeah, well, my little percentage, but yeah. I'd gotten to know... I was elected to the board, and then I was the treasurer of the association. The NCTA, when I first got on it at that time, had a budget of $110,000. Quite a difference.

MAXWELL: That's the light bill now.

RUNNELLS: That's right, that's exactly right. And then I got to know a bunch of the guys – George Barco, an outstanding guy, outstanding guy. Marty Malarkey was there, Bill Daniels was there, Fred Stevenson, Toby Flynn – all of the old timers were there. Fred and I got to know each other pretty well, and he was working for Senator Fulbright. The Fulbright family owned a cable system in Arkansas, and he wanted to branch out on his own, and I said, okay, we'll do it together. So we looked around and we ended up with a system in Nevada, Missouri. It was a franchise which was a long way from here. But the one in Nevada, first of all they didn't want to give us a franchise. The other fellow, a lawyer by the name of Boyd Yealing, took up the cudgel force and he was the founder of the savings and loan laws in the state of Missouri. Boyd was something else. He drove his car and talked to you at the same time, like this, going down the road. His car had dents and nicks, God knows! Just awful. So we got our franchise, and we built that up.

MAXWELL: Where's that town?

RUNNELLS: In Nevada, Missouri. Nevada, Missouri.

MAXWELL: In Nevada? I don't know what part of the state.

RUNNELLS: Nevada is south of Kansas City, 120 miles south of Kansas City. Fred and I had a good time. Fred, actually though, he had a heart attack in the late '60s and he got scared, and he wanted to really travel, so I bought him out and we really hadn't finished building the whole town, so I built the whole town, got it in good shape, and it was a good little system. I had my family involved in it, but it was off the beaten track for me, and I was also at the same time in the ranching business and the mutual fund business, so I had those things going and I couldn't spend that much time. Jack Tyler was my manager and Jack did a very good job for me. As I recall, in about 1975 I went to try to get a rate increase, and I thought everything was fine, why not get a rate increase. Well, the senior citizens of the town objected so much at city council that they said no. I was a little irritated by that, a little irritated, and in the meantime, I had seen the mutual fund business in the '70s and the market going badly. The ranching business was great, but it was more a labor of love because it's so capital intensive plus land intensive. So I decided I'd look around here, here being Houston, and in Houston my ranch headquarters were down near Bay City, Texas, which you've got nine miles southwest of here, and it was Bay City, and it was Horton and El Campo. I thought, well, I'd look at those communities, and I found, my attorney when going through the records found that actually Communications Properties' predecessor had gotten franchises and had done nothing with them back around 1970. So I decided I'd go ahead and go for the Bay City franchise, and my attorney and I, because I had business and did business with the ranchmen around here I was known, and I went through all the proper things to do, and the mayor, Mayor Gussman was very nice, and so I got the franchise in Bay City. Then I went to Horton and I got the franchise in Horton. Then I went to El Campo, which I presently own, and somebody else sort of stepped in and said that they'd already franchised there, so I didn't get that. At that point I went ahead and was building Bay City and Horton and things around there, I got Sweeney, a couple things like that, and Markham – little towns, but they were all good cable towns. Here in Houston the signal was not that good, you didn't have all the choices. That was prior to the days of the dish, and I'm going to step back a little because during this time I saw a friend of mine going for city council down here in town asking for the franchise for Houston, and this was 1972. So I went and called a friend of mine, and I called Crosby at CPI and said would you guys be interested in trying to get the Houston franchise. Well, we got a group together, and we went through everything. We had two very, very strong groups. We came up to the hearings down here at city hall, and Louis Russ was mayor, a good mayor, good mayor. The only problem was Louis had friends on both the competing groups. Our group, which was Gulf Coast Cable, lost. Then, as it turns out, there were some people who said cable's a monopoly, which I turned a deaf ear to, and then said we want more than one. Well, the more than one campaign actually was run by Cathy Whitmire's former brother-in-law, as I recall. And it came up for a vote to the city, and we won the referendum, so that negated all cable in Houston. In the meantime, Gulf Coast Cable had made a commitment to the city of Bellaire. So we got to build Bellaire, and of course it was a money loser but it got our foot in the door, and that's when I went to Chicago to the national convention and we bought the first dish down here. And man, it was expensive!

MAXWELL: I remember that, yeah.

RUNNELLS: But we had HBO on though, and that was a real winner. HBO was great. So I had a guy working for me, Don Loggins. We didn't know if it was going to make it or not, let's put it that way. But as we added some customers there, we also went and got the town of West University, which is not far from here, and Southside, and we built those little communities so they were all tied into that Bellaire headend then, knowing that something was going to happen with cable sooner or later. In the meantime, I was still doing my own thing over here. I was not on any salary. It was a group deal, and I was the general partner, so I had to fund. We built a line, a cable line, from our headend in Bellaire out to The Villages. And so we started building line and getting the franchises in The Villages, which as you know, is the Memorial Drive area, very affluent, but a hell of a lot of trees. Lots of trees. You could pull ahead in a clear right of way and before you got it built the trees would come back. Well, we fought that and we had to buy a million dollars worth of equipment, and we bought from RCA and I had to go in the back of the note. So I fund that for a million bucks and it went over pretty well. With that we were spread... they were entities of Gulf Coast Cable, of which I was general partner, and I had a guy who came on board after a while. First I had Jerry Horton – I don't know if you ever knew Jerry, Jerry was an old-timer who did a great job for me – and we struggled to keep this thing going. On the other hand, I snuck down below and I finally got El Campo in '75-'76, and I had Sweeney, El Campo, Matagorda, Blessing – I didn't have Blessing then, I have it now – Horton. So those little communities were Mid-Coast Cable, which was mine 100%, and I had a guy who was working for me there to take care of this, and that worked out fine. Then the time came when Jim McConn became mayor, and he told some of the people that he wanted to have a cable franchise in Houston and talked to someone. They said, well, Clive Runnells seems to be doing a good job elsewhere, why don't we talk to him. We had a PR firm, Chamberlain Flaherty, they're both, I think, deceased, and Bill knew the mayor pretty well, and I got to know the mayor and we had others in our group who did, and then there was another group that came up, and I hired, because of what I had done to the Villages, I hired a fellow named Dick Barron, who actually had worked for Lester Cayman who was one of our opponents. Dick was from Massachusetts, and I give lots of credit to Dick. He was a fellow who knew how to get things done, and he loved working, loved cable, loved selling PR, a good guy, still a good guy, smoked one cigarette after another, a lot of irreverence but still, he was fun and I recall the day we got the franchise finally. We whopped and hollered and we got to celebrate. It was a great moment in our life when we got that franchise. Dick did all the work. I was the front guy, let's say, but Dick ran the organization. In the meantime, Jake Landrum who used to be with CPI went to work for me down in Bay City and he ran Mid-Coast. Of course by that time, we had dishes and we had all sorts of... we had bells and whistles for the whole systems, and I can remember the night we turned HBO on. Dick helped me with that, and he was a sales person. We went on the air and he said there's only 20 places left to get on here, and people would come up there with their nickels, dimes, and quarters to get it. At that point you had HBO, and you had Showtime and Cinemax and the whole shmear and then they took all of them, and today it's not different. So that's basically what's happened with cable. We built the cable system here, part of it, and then Gus Hauser with Warner Amex came in, and frankly I really didn't care about selling the system but my partners said they wanted to so it was sold. ???? shortly got sued, got taken to the courthouse, it all worked out. I kept my small systems until the late '80s, and I still have 6,500 subs in El Campo.

MAXWELL: Oh, you do?

RUNNELLS: Yes, I still have a few systems, and got a fellow named Wayne Neil working for me, very, very good, a good guy. So, it's been very good for me, a very good business to be in, and I made a lot of acquaintances in the past. I don't go now, if I got to the national conventions it's a whole new ballgame.

MAXWELL: I'm afraid it is. Almost no one is still around.

RUNNELLS: No, they all have left, or they're all dead or too old to get around.

MAXWELL: Or sold off and go off and do other things. So, how big was the Houston system when Warner Amex bought it from you?

RUNNELLS: I really can't tell you, I don't remember. Maybe 10,000-20,000 subscribers? It wasn't a whole lot, but all we had really built up at the time were those smaller communities.

MAXWELL: I remember when you built Bellaire, and that was right at the distant signal brouhaha just before HBO started.

RUNNELLS: Yeah, we built that and then we got HBO. That was a big kicker for us.

MAXWELL: That was a huge difference in the business. That actually helped Dick Jackson put the dish in in Vero Beach, Florida.

RUNNELLS: I've got pictures of the one when we put ours in.

MAXWELL: When you put yours in? That was the first one in Texas, wasn't it?

RUNNELLS: I don't think so, no.

MAXWELL: No? Who else had one before you?

RUNNELLS: We used CommScope cable, Times Wire, all that stuff, and Ray Schneider went to work for Times Wire. He did a good job. Poor Ray died, he smoked one cigarette after another.

MAXWELL: After another, I remember him. And Jake just had a tragedy.

RUNNELLS: Jake, I saw him the other day at the service, and Jake still smokes like a chimney.

MAXWELL: I know, he's a good guy.

RUNNELLS: Yeah, he is, he is.

MAXWELL: So were you active in the Texas association back in those days?

RUNNELLS: Not really. I let Jake... I was the Texas representative on the national, so actually I was on the national board four decades. Let's see, I was on '56 to the '60s, so I take two decades in there, and then I went back in '70, and then '80, and then '90, so I think five or six of them in there, whatever it is. I had a lot of fun with it, too, and I knew a lot of the Republican senators, not as many Democrat senators. Lloyd Dents was a good friend of mine, and Lloyd was an investor...

MAXWELL: But he's a Texas Democrat.

RUNNELLS: He always has been.

MAXWELL: Yes, I know.

RUNNELLS: He's not that well, unfortunately.

MAXWELL: He's a good man though.

RUNNELLS: His wife was outstanding. She was on our mutual fund board, so I know her quite well.

MAXWELL: Do you remember any of the big political battles that you helped fight at the NCTA?

RUNNELLS: The '83 job, we did the '83. Reagan signed that, and what was the one Strom Thurman signed? It was another one that he did. Basically we had more... the '83 was really the only... but there was always a fire somewhere that you had to put out.

MAXWELL: There still is.

RUNNELLS: That's correct, that's correct.

MAXWELL: It never goes away.

RUNNELLS: And Wheeler, Tom Wheeler, I enjoyed Tom, and Tom couldn't believe that I could get in some of the doors, but I could get in the doors because I was doing some other things. Tom was very good, after I got him in the door then he could sell.

MAXWELL: He could, he truly can. He just left the cellular industry finally.

RUNNELLS: He's done that a long time.

MAXWELL: He has. He was good at his job, I though, too.

RUNNELLS: He was very good. I haven't seen him in some time. Last time I saw him I was up there in the middle '90s seeing Jack Beales on some issue. Jack, I supported him when he first started running for Congress. I think it was '82 or '84. I supported Tom DeLay, Tom I know quite well. Tonight I'm going to something for Kay Bailey Hutchinson, who's done a great job. She's very good for us in Texas, and she was on the Interstate and Foreign Commerce, so she's probably done with cable then. I've been involved in that type of politics, but never run for office, never want to run for office.

MAXWELL: My father-in-law was a senator. I wouldn't want to do that.

RUNNELLS: Really? Who was that?

MAXWELL: Floyd Haskell from Colorado.

RUNNELLS: That's right, that's right, I remember the name. He wasn't there very long, was he?

MAXWELL: One term.

RUNNELLS: One term. Republican or Democrat?

MAXWELL: A Democrat, but he was formerly the senate majority leader as a Republican for the Colorado senate. He changed.

RUNNELLS: He changed the other way, right.

MAXWELL: Following the war in the '60s.

RUNNELLS: Yeah, that's right. I think I remember that.

MAXWELL: Good man, but he's gone. What about other mentors that you had in the business? Any names other than Stevenson that stick with you?

RUNNELLS: No. I knew all the older guys, the guys that have been around for a long time. I knew Jack Crosby, of course, I knew Jack well, I knew Hughes well, all those guys. But there weren't that many down here. I wasn't a golfer, so I didn't get out on the golf course and do all the schmoozing, and I had a bunch of other things to do, too.

MAXWELL: Well, ranching takes a little bit of effort.

RUNNELLS: That's right.

MAXWELL: My grandfather was a rancher north of Arlington towards Ft. Worth, and that is a tough business.

RUNNELLS: Well, right now... our Christmas present this year was the mad cow disease, and that knocked the market off 15-20%. It's coming back. We've got interest in two feedlots down on the border, and of course it doesn't hurt the feedlots because you've got to keep them full. I'm very fortunate I don't have any cattle coming off feed until April. By April I think things will be better.

MAXWELL: Things will be better, yeah.

RUNNELLS: And I really think that the Mexican border should open up fairly soon, and I think they'll get it done, but one animal that cost this country 3-4 billion dollars is really tragic. It's really tragic. It's the media, there you are. The media plays it up. When they don't have a good story then they've got to make up a story.

MAXWELL: There's enough on both sides of that. And they found where the cow came from anyway, so that's Canada.

RUNNELLS: That's exactly right, in Canada. And the probably all came from feed in England. Now they're going to start checking on dog food. I don't know who's going to eat dog food, but basically I think the figures... I think there's 134 people have died from BSC in England, and they had over 100,000 head of cattle, I believe that were eliminated.

MAXWELL: That were eliminated, right.

RUNNELLS: I guess that's a good word for it, and only ten in the rest of the world have died from it. So it's a pretty crazy thing. They were talking about Laredo, Texas. They've had 29 homicides already this year down there. I think some of the larger cities have an awful lot on Saturday night, I'm not sure, but they're not written up.

MAXWELL: Where'd you grow up?

RUNNELLS: Well, I grew up in Chicago and California. I was born in Chicago, and my father was sick and we moved to California, Santa Barbara for six or seven years, and then moved back to Chicago and then I went off to school in Concord, New Hampshire at St. Paul's, and then I went to Yale and then went into the service for a couple of years, back to Yale, worked in the Chicago area, and then moved down here.

MAXWELL: So where do you think the cable business is going now?

RUNNELLS: I really don't know. It's way over my head. It's a young man's game. It's all technical. I really don't know. The dish has taken a lot away, but I think the digital cable... you've got just as many pictures.

MAXWELL: Has DirecTV and EchoStar hurt you in El Campo?

RUNNELLS: To some degree, but we're ready to go ahead and upgrade, and do what we need to do. They have a hard time getting service. It's not as personal, and there's so much on there. There's too much on there. When I think that I was a pioneer and we only had... the networks were crying and now they charge us. You have to do this, that, and the other thing. We only had the three, I don't even think we had PBS. The thing in Williamsport was so bad. The picture... you couldn't even watch it. It was just all snow. But it was better than they had.

MAXWELL: I remember when Channel 11 was the second one on the air here, and it was Galveston...

RUNNELLS: Well, they had to have it down in Galveston, I think in Galveston county to allow it to get the permit. I'm not sure.

MAXWELL: I'm pretty sure that was it because they built it right on the county line. I remember that.

RUNNELLS: They were all very... when we did Gulf Coast Cable, they were all very supportive of us at that time, and then the interesting thing is that Dick Barron, it was his idea of HSE, Home Sports network. Dick had the idea and started off, and he didn't get any credit for it, unfortunately, and now they're trying to get together the Rockets, and the Arrows, and what's the other one?

MAXWELL: The Astros here?

RUNNELLS: Maybe the Astros, not football, and I think from there, if they do that, they'll have another pay. And frankly, I'd just as soon pay for it that way than go out to some of those things. I'm a friend of Bob McNair, I know Bob and I know a lot of people that are involved with it, but the Astrodome is just easier to park at. This one is tough.

MAXWELL: This is terrible. I went to the opening Texans game, thanks to my friends at ESPN, but it is a headache there.

RUNNELLS: I just had a call from a friend of mine. He had two tickets to the Super Bowl and I had to say no because I'm going to be out of town. I went to the one before, but this would be a circus. You might as well blow the whole day, the whole total day, and probably even more, 36 hours not 24 hours.

MAXWELL: So you've got 6,500 customers today?

RUNNELLS: Just about.

MAXWELL: Just about? And how many channels do you carry, do you know?

RUNNELLS: 40-some odd. Wayne runs it. I don't look over his shoulder. I just like to see what the cash flow is.

MAXWELL: And the other businesses you're in, you're still pretty involved in ranching today?

RUNNELLS: I still have a place in south Texas where I run steers, that's all I run is steers. I have an interest in a place in Matagorda county, and then my partner and I have an interest in two feedlots in Crystal City and Quemado, and then we have a brokerage cattle business in Laredo.

MAXWELL: And you're still in the mutual fund business, too?

RUNNELLS: No, I got out of that in '90, '89-'90. It was a group that finally ended up being called the Criterion Group, and I was the fiduciary, and I was president of our funds, so I wasn't in a day-to-day activity, but I had the fiduciary responsibility. I'm glad I'm out, but I can say when we were doing it they weren't doing those deals...

MAXWELL: They were doing after-hours hedging stuff?

RUNNELLS: No. In conflicts of interest I have done volunteer things such as being on the Texas Turnpike Authority, and chair of the Texas Turnpike Authority, so that's one side of it, and then I was chair of our MHRA, Mental Health of Harris County. John Lindsay, the former judge, now state senator, appointed me. We didn't know what a mess it was, but I've been involved with that. I just left a meeting of a mental health situation at Moursund Street, a gathering place that my wife and some other ladies started as a psycho-social clubhouse for adult schizophrenics. So, very basically I do quite a bit in mental health. I'm interested in things that go on out here at the medical center. So, I keep myself pretty busy.

MAXWELL: Good. I appreciate it. Anything else you want to add on your cable experience? What was the funniest thing you ever tried to accomplish and maybe didn't?

RUNNELLS: The funniest thing I ever tried to accomplish and didn't? Well, we didn't like being turned down. The first time when we went to the cable franchise in Houston, and we had some pretty funny things going on when we were doing the "more than one" because we were intimately involved with the "more than one" group, and we won, which was pretty nice, but we had to hire people to put the signs out on the esplanades, which people didn't like very much. He did that at dark, at night. So there were some funny times we had. Some of the people I've dealt with are wonderful people, some not so. I think going back in the early part of the '50s and early '60s, there really were some good guys. Then you've got to realize age takes over, and there's a whole new group coming along. The guys like Frank Drendel, and he's a very good guy, and he has lived through all these good, bad, and indifferent times. Frank's a nice guy, but a lot of it... I enjoyed it, I had a lot of fun, and it's time to smell the roses, I think.

MAXWELL: Good, well, thank you very much.

RUNNELLS: You're more than welcome. Thank you.

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Shellie Rosser

Shellie Rosser

Interview Date: Thursday October 06, 2005
Interview Location: Denver, CO
Interviewer: Kristin Van Ormer
Collection: Share Your History Collection
Note: Audio Only and Transcript Incomplete

ROSSER: My name is Shellie Rosser and I'm a consultant in the technology supply side of the cable television industry. I started in the business in 1976, so I've got 28 years of reflection on how the roles of women have changed over those years in the technology side of the cable business. In 1976, I had three semesters of liberal arts college under my belt and I had to drop out of school to earn some more money and go back. My choices at the time were fairly limited. I had been tending bar; it was the best money I could make at the time and it was time to get a day job. So when I started looking around at my choices I was frankly very alarmed that most personnel agencies considered me as a secretarial candidate but I couldn't do that because I could only type as well as I could for a term paper at like 15 words a minute or something and it was kind of making my skin crawl to be pigeonholed into that kind of a category. So I started looking around at what else I was qualified for and I actually interviewed to be a corrections officer at Rahway State Prison, a maximum security facility. I got scared off of that pretty well by somebody who kind of had to offer me a job because I tested so high, but he closed the door behind me in his office and said, "Young lady, you really don't want to do this," and he started to explain why and he scared me. He was right, I didn't want to do it but I was just looking at my options. I went out interviewing for a sales job for a paper company and was told – this was pre-EEO when people could actually be honest with you about why you weren't being hired so you could deal with it more directly – but he said, "You know, it just isn't right for a young lady like you to carry these heavy samples around."

So I was being blocked by my gender everywhere I turned. The other opportunity I had was to serve cocktails on spiked heels at the local Playboy Club wearing little bunny ears and a cotton tail on my butt. Not an attractive option. Finally I met a personnel agency who told me she was going to send me on a job interview with a company called Anixter Wire and Cable and she thought this would be a really good match for my resume since I had been a theater major in college and she said they have a lot to do with television and I'll probably meet a bunch of actors there. So I went in to interview with John Egan at Anixter Wire and Cable. At the time I think he was 28 years old and he was managing that regional office for them in New Jersey, and realized that this was a distribution company and they sold nuts and bolts and everything it takes to build a cable system with. Well, I didn't know what a cable system was, what HBO was, and cable television was nothing I'd been exposed to before but the job was really interesting. The training program went something like this – "Here's your desk. Here's a catalog of all the stuff we sell. Here's a phone and here's a Fact Book that has all the cable company in these five states. Call the people in this Fact Book and sell them this stuff from the catalog and if you have any questions go out in the warehouse and ask the warehouse manager where it is." So that's how I got started and I got absolutely hooked on it and helped to build the cable industry literally from the ground up. We would ship materials to these construction crews on these job sites and the shipping location would actually be a bar and the telephone number to call before delivery went to the pay hone at the bar and it was the bartenders who were asking the head of the construction company to come and sign for the delivery. I would have these construction crew guys – I can't describe the scent or the look of these guys – but they would come off the poles...

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Robert Rosencrans

Robert Rosencrans

Interview Date: Tuesday May 12, 1992
Interviewer: E. Stratford Smith
Collection: Penn State Collection
Note: Audio Only

SMITH: This is Tape 1, Side A of an oral history interview with Robert M. Rosencrans. This interview is part of The National Cable Television Center's continuing oral history program related to the cable television industry. Mr. Rosencrans is a pioneer dating back to the very early days of the industry.

Bob, it's our practice to start these interviews by getting some personal background information about the interviewee--vital statistics and so forth. Would you tell us where you were born and give us some background about your parents.

ROSENCRANS: I was born in March 1927 in New York City. My mother and father were both gainfully employed. My mother was a dress designer who had never gone past eighth grade but she was a pretty talented woman and she became a very important figure on 7th Avenue.

SMITH: What was her professional name?

ROSENCRANS: Her name was Eva Rosencrans. My father was an importer. He imported materials for the millinery trade--ladies hats--which were a factor in those days. I grew up with my older brother who was four years older than I. We grew up in Woodmere, Long Island, starting around 1931. I went to a small ethical culture school called Woodmere Academy starting in first grade and that's where I graduated in 1945. A wonderful school in the sense that there were small classes, prepared you for college and close to home. I played all the sports because they needed everybody they could get for the teams. And you did everything there. You had to be in the play; you had to be in the glee club; you had to play in the band. So it was a good preparation for the unknown future.

SMITH: What was your father's name and your mother's name specifically.

ROSENCRANS: My father's name was Alvin Jay Rosencrans. My mother's name was Eva Greene Rosencrans. My mother was born in Russia in 1901 and she came over with her parents about 1903--came on a boat. My father was born in Austria and he came over with his parents in about 1892 or '93. They met some years later than that, of course, but that's their background. Both of them were educated in this country. My father had college; he got a college degree. My mother was forced to work very early but she's highly knowledgeable--like she's got a college degree and more.

SMITH: You mentioned a brother. Did you just have one sibling?

ROSENCRANS: I had one brother who was older. He was in the service ... in the Second World War. Unfortunately, he lost his life in Germany in February of 1945 just towards the end of the war. He was in the infantry. He received the Silver Star for valor in service. It was quite a blow to the family and to me. It was a very, very difficult period of my life and my parent's lives.

SMITH: He was an older brother?

ROSENCRANS: Yes.

SMITH: What was his name?

ROSENCRANS: His name was Herbert.

SMITH: You mentioned sports in school. What was your favorite sport?

ROSENCRANS: I think I loved baseball the best although I played everything. Now that you mention that, every Friday or Saturday night we all went to the movies in those days. Between the double features they always showed the Pathe News. The thing I used to love the most was to watch the replay of the football games on film in the theater. I think I even remarked to someone at that time, "Wouldn't it be something if we could see that at home?" See the whole thing as it's going on. Never dreaming of television, of course, in those days. But I'd go to the movies just to see clips of the Notre Dame game that week against Southern Cal. I can remember that very clearly on the screen, watching those games.

SMITH: I noticed in a report I was reading about some of your early background that you were involved with Notre Dame games in professional activity. I was a little curious, you being a Columbia University graduate, which is jumping the gun here in the interview, but was there some special thing about Notre Dame that you enjoyed, or was it that just that their games were there?

ROSENCRANS: Well, they were the number one attraction college team in the country. The company I joined in '53, I think, had a contract to put their games on in theaters for the subway alumni--New York, Chicago, Boston, etc. That was before home TV carried any football games. They may have had a few football games on home TV but Notre Dame was special. And there was a special audience for that. So I had the opportunity during those years to go to Notre Dame and meet Bob Hessberg; Father Joyce, who ran the athletic department; Coach Frank Leahy. Those were interesting days. We got into live sports broadcasting. Pretty rudimentary, maybe two or three cameras. Wouldn't look good today but I suppose in those days it was okay.

SMITH: Was that the company that was known as Box Office Television?

ROSENCRANS: That's right, yes.

SMITH: Tell me, how did you get started in that?

ROSENCRANS: I graduated from college in 1949. I had two tours of duty in the service. One just at the end of World War II between high school and college.

SMITH: Which branch of service?

ROSENCRANS: U.S. Air Force. That was a short term because the war was over in 1945. Then after college the Korean War broke out and I was still in the reserves so I went back into the service for another year until that war was over. Never had to go overseas, fortunately.

In between I had a variety of jobs. Nothing really too exciting. I was in the retail business at Macys and Bloomingdales which didn't really move me. I also sold paper products. Not really finding my niche as yet. Then somewhere along the way a friend of my parents, a man by the name of Abraham Chasens who was the musical director for WQXR--a family friend ... was very close to an attorney who was the attorney for Sid Caesar. They had formed a company called Box Office Television. The purpose of Box Office Television was to develop programs to be shown in theaters on large screens to give the theaters an extra product to combat this new thing called home television. Also lurking there was the concept of perhaps doing industrial programs on videotape ... not on videotape, live. At that time videotape hadn't developed. So the mission of the company was to do industrial shows and events like the Notre Dame football games and we also had a contract with the Harlem Globetrotters to do their games.

So, I joined it. I had no family commitments and no requirements for much income and it sounded exciting. And it really was exciting. We quickly got into the industrial show end of things. As a matter of fact, we did a show once introducing the Edsel car. I remember very clearly MacNamara, who ultimately became Secretary of Defense, was very prominent in that development. We had a show out of Dearborn, Michigan, featuring that new car. It could have been the kiss of death.

SMITH: I was going to ask you, I hope the program didn't signal the demise of the Edsel.

ROSENCRANS: We introduced the name "Nationwide Insurance Company" which had a different name at one time. The service was used as a device to make important announcements to dealers, to the press. We did a show for Pan American. We did so many shows over the years. We never really were a profitable business because the shows were too sporadic. The Notre Dame games and the Globetrotters didn't draw enough to really make that a paying proposition. It was just really a demonstration of the method. We were able to invite advertising agencies and companies to see them in the hope of stimulating the concept of doing an industrial show. The industrial shows and the games were all done in those days on the AT&T long lines and local telephone company loops, all interconnected on a hard basis. Ultimately we began to use AT&T microwave across the country. So we had a fixed cost for each show that was really tied into the telephone company but it was a closed circuit and became, of course, a precursor of the cable closed circuit.

SMITH: When you described some of the shows as industrial shows, were they shows in the theatrical sense or was it just teleconferencing between business offices?

ROSENCRANS: No. Just as companies do films introducing a new product, they had entertainment. I remember a show in Bartlesville, Oklahoma, for Phillips Petroleum one year. They had a big campaign to make sure their dealers kept their restrooms clean because that was a complaint of people all around the country. They wanted to tell them to go to the Humble Oil gas stations, you'll have clean restrooms. Jonathan Winters did his routines. You know, four kinds of dealers telling them how he keeps the restrooms clean ... holding mops and buckets and all that stuff. Merv Griffin was the MC of the show. So that was the kind of thing. It was a company program mainly directed to their ... not their customers but to their own dealers and affiliates.

SMITH: Then they were, in a sense, theatrical productions?

ROSENCRANS: Yes. Some were much more straightforward. Some were simply panels talking. Ultimately we even did auctions. We did a government auction. The government was auctioning surplus property. They had found that when they did it in one location, the bidders often were in collusion. They wanted to test television by offering it to bidders in five or six cities with an audio feedback so that bidders in Chicago would be bidding against the guy from Boston. And they kept putting the surplus tent or whatever on screen. "This tent is now up for auction. We have 155 tents." There were guides as an auction will have a book which explained all of these products in detail. So they got real live bidding over the air and finally they hammered the thing "sold." So that was another kind of a form of television that was involved at that time.

SMITH: Well, did Box Office Television produce these programs or were they more a carrier?

ROSENCRANS: Well, very often we would contract with an advertising agency and they might be the producer; we would be responsible for the facilities. We had some producers on staff who were able to do some shows under contract but we didn't have musical people we weren't that creative. We were there to provide our facility primarily.

SMITH: Specifically, what were your personal responsibilities in that operation?

ROSENCRANS: Well, originally I was kind of subordinate to another party, a fellow by the name of Bill Rosenson. I don't know if that rings a bell with you.

SMITH: I don't think it does.

ROSENCRANS: Bill was involved with hospital television in the old days and he also left it when we ... The company, Box Office Television, lasted about two or three years and then the meetings began to migrate from theaters into hotel ballrooms. They were more logical because the groups weren't big enough to fill a 3,000 seat theater. You might have 300 dealers in the Paramount Theater with 3,500 seats. They were kind of lost. But in a smaller hotel ballroom you had the capability to put it on a nine by twelve foot screen in a smaller room and it was more immediate plus the hotels could get some revenue out of the lunches. So the medium shifted from theaters to hotels and we became a subsidiary--Bill and I were running the company--of the Sheraton Hotels Corporation. Robin Moore was the son of one of the founders of the Sheraton Hotels and he had a bent for television so he brought us into Sheraton and formed a subsidiary. That was about 1956, I believe. So we did a lot of shows subsequently in hotel ballrooms which is another refinement of the original concept.

My job was fundamentally to sell the programs, contract for them and organize the distribution. We didn't have many staff. The Sheraton concept lasted perhaps a year or two. Again, the sporadic nature of the contracts didn't give us a chance to really build anything of any consequence. We became acquainted with TelePrompTer during that period. I think that was '56 because it had some connection with my honeymoon. I had to come back from my honeymoon in October of '56 to do a show for the AFL-CIO. I think that was when we had gone on to TelePrompTer. With Irving Kahn at the helm, he was excited about the new media and he felt he could add excitement and clients to our business. He liked the idea of increasing, of course, the scope of the TelePrompTer Corporation which up to that point had been purely the teleprompter itself.

SMITH: He bought Box Office Television from Sheraton?

ROSENCRANS: He didn't buy anything. It was just a lateral movement and I went into TelePrompTer as vice president of closed-circuit television, I think that's what we called it. Again at TelePrompTer things were exciting. We did a number of shows. Then there came a time about 1958 or '59, I may be off a year or so, when I got a phone call ... We were dealing the fights, the Robinson/Basilio fights, into theaters and arenas on closed-circuit television. That was the period of time when the big fights became prospects for paying audiences in theaters. We bid against another company and we were successful winning the first or second Robinson/Basilio fight. My job was to set up the distribution in maybe two hundred locations across the country and tie them all together with cable, contract with each promoter.

SMITH: Was that Sugar Ray Robinson?

ROSENCRANS: Sugar Ray Robinson and Carmen Basilio--great middle-weight fight. Had loads of interest and the fights were fantastic. Prize fighting was more or less the dominant sport in those days. Today it shares the spotlight with quite a bit more. And during one of those fights I get a call from a fellow by the name of Bill Daniels in Casper, Wyoming. He said he'd like to buy the fight for his cable system. I said, "Cable system, what's a cable system?" So he said, "We have a cable system here in Casper. We have about 2,500 subscribers and we'd like to carry the fight." I said, "Well, maybe we can do something. How are you going to get it there? The cost of the telephone connection between the Denver terminus and Casper is going to be huge." He said, "Don't worry about that. We have our own microwave." "You do?"

So Bill came to town and we gave him the fight on a nominal basis. He and Irving Kahn met at the time and struck up an immediate kinship--an entrepreneurship. Subsequent to the fight I think Bill had convinced Irving that that was the business of the future and he ought to buy some systems. And Irving bought, I think, four systems--Farmington; Silver City; Liberal, Kansas; and one other which escapes me. And all of a sudden there he was in the cable business with maybe seven or eight or nine or ten thousand subscribers. I think he paid for them pretty much with company stock which was all over the place. But TelePrompTer was in the cable business. I was still in my closed-circuit television end of things. The division really ended up under Monty Rifkin who was then the treasurer of TelePrompTer. People like Ray Schneider were in the company. Other names--Les Read, Jack Gault--a lot of people still involved.

And after Irving and Bill met, Irving had the imagination to see where this was going. But, of course, cable at that time was really just for the sticks. For towns that were beyond the reach of TV stations either through terrain or distance, I suppose. But as I looked at the cable business ... I had nothing to do with it. It was not in my department. I wish it had been, but it wasn't. It was pretty much looked at as a financial thing. There really wasn't much marketing or any of those things going on. But I looked at the business I was in which was so sporadic and unpredictable ... You could have three shows in one month and you might go for four or five months and have nothing else. So, boy, would I love to have something that would have day-to-day revenue. I'm looking at this cable business growing. All of a sudden Irving tells me their revenues have just crossed the million-dollar level and growing. And I said, "That looks like something I ought to do."

So in 1962 they had discussed a deal with a man by the name of Newell Preiss. Newell Preiss goes back to the Bergren era.

SMITH: I knew Newell Preiss.

ROSENCRANS: Newell lived in Spokane. They tried to buy his system in Pasco-Kennewick, Washington. Their proposal was a stock proposal and Newell was too conservative and too smart to take the chance on stock because you had to hold the stocks for years before you could sell it. So the deal collapsed and Monty Rifkin knew I was interested in going into the business and he handed me the file. He said, "Well, why don't you try to buy the system?" And simultaneously with that I had gone to visit some friends of mine who I'd met up in Westport, Connecticut, through my family. A young fellow, even younger than I was, whose father and their partners had been in the business of acquiring companies. Not really starting companies but mainly acquiring bankrupt companies from the banks during the Depression and then either liquidating portions of it or running portions of it ... building it up and selling it. And I went to them with the idea of here's a new industry. I think we can buy some cable systems. Let's put some funds together. So they said, "Fine. Bring the property to us and we'll see what we can do."

SMITH: What was the name of that company?

ROSENCRANS: Flug and Strassler. There were two sons who were younger than I was and the fathers were quite a bit older. I was kind of in the middle. I played a lot of golf with the Strassler group and that's how I got to know them prior to this. They were very successful people, very careful people, and very much oriented to solid business practices. Had great relations with the banks because the banks would call them to solve their problems with problem companies.

So I brought the Newell Preiss thing back to them and I said, "It has to be a cash deal." I think we were acquiring 3,000 customers for $580,000.

SMITH: And which system?

ROSENCRANS: It was the Pasco-Kennewick, part of two of the three tri-cities which is equal distance between Seattle and Spokane but south. Right on the Oregon border on the Columbia River. Hence the name Columbia.

SMITH: I was going to ask that question in due course.

ROSENCRANS: That's where the name comes from.

SMITH: I wondered whether it came from Columbia University or the Columbia River.

ROSENCRANS: Take it either way but it came from the Columbia River. We called the company Columbia Television Company. We got a letter from CBS claiming we were infringing on or impinging on their name--both ... whichever.

SMITH: Both.

ROSENCRANS: We went to some little court. We won the case.

SMITH: My God.

ROSENCRANS: But I learned a lot from Newell Preiss because I used to fly out to Spokane and he and I set out on a drive to the Pasco-Kennewick area. We got along awfully well. He was a very interesting, bright man. He was an heir to the Penney family, I think, somewhere along the way if I'm not mistaken. But a marvelous guy and one of the guys you'll see in the early gatherings of the cable industry wherever they were held. Newell told me everything about the system. And he told me two things that always stayed in my mind. One of them was always add services, never take anything away. If you can put microwave in to bring a distant signal in, do it. If you can put up a weather channel, do it. Just keep giving them more value and your business can't help but grow. The second point he made was always stay involved with the NCTA. You're going to need a lot of help in this business and you better build a strong organization. Make sure that the organization is sound.

So those were the two things that I learned from Newell which I never forgot. And even at that time, the system we bought was pretty advanced in terms of the state of the art because it was a twelve channel system not a five channel system.

SMITH: And roughly what year was this?

ROSENCRANS: That was 1962.

SMITH: That was an early twelve channel system, then?

ROSENCRANS: Yes, one of the early ones. There was a microwave ... Cliff Collins and Pat Hughes.

SMITH: I know them.

ROSENCRANS: They had the microwave company up there and they were feeding the network stations from Spokane and, I think, an independent station from Seattle. So we had the two tri-city signals; we had three Spokane signals; I think we had one or two independents; and an educational. So we had a pretty good package when you realize that the people in Pasco-Kennewick without us could only get the two local stations. One of them shared ABC and NBC and the other was a CBS affiliate, I think. I may not be quite clear on that. So we had something to sell. We put weather channels, the old clocks up there, that Bill Daniels had promoted and we were off and running. That was 1962. The system developed very quickly. We ran ninety-nine cent Mother's Day promotions--sending out postcards. And the thing did well. I think we went up to almost double the size of the system in the first year.

SMITH: What was it when you started?

ROSENCRANS: Three thousand. I think it was like five or six at the end of the year. It moved very quickly. And, of course, it was a cash flow positive system when we bought it and you add that revenue to it and it began to show some real gain. We originally financed the acquisition. We took ... half of it was in bank debt and half of it was investor equity. But the investors had signed personal bank notes so it was not arms-length financing.

Towards the later part of the first year, that was August of '62, in the middle of '63 I learned that the owners of the Pendleton system down the river from us in Oregon were going to offer their system for sale and they were interested in bids. We bid against Cox and somehow they bid $600,000 and we bid $650,000. And at the end of '63 we, all of a sudden, were a multiple-system owner. We had Pendleton, Oregon, and Pasco-Kennewick.

SMITH: How big was the Pendleton system?

ROSENCRANS: I think Pendleton, too, was about 3,000.

SMITH: Who were the owners that you bought it from.

ROSENCRANS: A bunch of local people--local farmers and merchants. A nice group of people. In our meetings with them they were very concerned that, because they lived in town, they weren't selling to someone who was going to abuse the system. I remember a marvelous meeting with them. We had a couple of beers and we shook hands. They wanted our deal because of the price.

So there we were, between the two with maybe seven or eight thousand subscribers. Pendleton was a most classical system. It's sitting there in a valley, far removed from any signals. So our penetration had to be 90 percent. But strangely enough each year the system keeps growing. Even today, I haven't looked at it in a long time, but I suspect it keeps growing. The rates in those days were probably four or five dollars a month. No pay in sight, nothing beyond basic cable and maybe a second outlet. That was the extent of the income. They were talking about FM connections. But that was the nature of the business. But it was steady; it was predictable. Subject to budgeting, you could really make a plan and come pretty close to the plan.

All this period I had never moved out to the northwest. I stayed in the New York area and flew out there perhaps every month to visit with managers and deal with whatever had to be dealt with.

SMITH: Who were your managers out there in Pasco-Kennewick and Pendleton?

ROSENCRANS: Clay White, I don't know if that rings a bell.

SMITH: That name sounds familiar to me.

ROSENCRANS: Not Clay Blanca. Later on we had a Clay Blanca.

SMITH: Just a different language that's all.

ROSENCRANS: Clay White and then Wes Stone in Pendleton. Wes Stone was just an extraordinary man. He passed away a few years ago. He was a guy you could set your clock on. You could just walk away from Pendleton and know that it was like you were there yourself.

Then, we acquired a few little properties up north in the Okanogan Valley from Sam Haddock. Remember Sam?

SMITH: I remember Sam. A great dancer. Not that he danced with me but ...

ROSENCRANS: So it was exciting because here we were going from what we started with 3,000 in '62 and here we were in '65 and '66 with a few acquisitions getting into the twelve, thirteen, fourteen thousand range all of a sudden.

We were using microwave. We were a little bit ahead of the curve, I think, of most of the systems by virtue of the microwave and bringing signals into these towns. We upgraded Pendleton from five channels to twelve. That was the extent of the technology, I think, during those days.

Our banking was very sound. We always had very comfortable leverage. We never were heavily financed. I think when we bought Okanogan we did the first insurance company, ten year straight amortization loan. A $600,000 loan at a fixed rate of interest for ten years. That was with Jim Straley of Home Life Insurance Company. He ultimately went to Teachers. Knew quite a bit and had a great feel for the business.

So that was the status of our northwestern cluster. It was a nice little company. I was making a living out of it. But during that period I also freelanced and did fights, set up the infrastructure for the heavyweight fights--the Liston/Patterson fights and so forth--just to augment my income.

SMITH: On whose behalf were you doing that?

ROSENCRANS: Every time a fight came up there were so many new bidders. There was a group ... Smith and Riner won one of the fights and they needed someone who had experience in the business on a freelance, part-time basis. So I said, "Fine, I'll do it." I gave them a fee and went in and contracted it. It wasn't hard. I'd done it so many times.

SMITH: You'd do the negotiations?

ROSENCRANS: With each affiliate, yes. Not for the original fight. TelePrompTer, I think, had lost out on some of the fights so Irving and I had a little strain there when he saw that I no longer worked for him but he wasn't appreciative of the fact that I came and helped some. I said, "Irving, my goodness. If you had it, I wouldn't have any part of it. But these other people had gotten it so I think I'm a free person and entitled to do anything I can do, and not do anything wrong."

SMITH: You've got to make a living.

ROSENCRANS: We've long since gotten past that. But then, I think, the most important thing that really moved the company out occurred in 1967. The Morgan Bank, who we had done our banking with, said there was a company called ... Bruce Merrill's company, the name has escaped me.

SMITH: AMECO.

ROSENCRANS: AMECO was overextended. They had a mix of cable companies and manufacturing and the manufacturing was killing them. And the cable companies were producing but there just wasn't enough money left over for the banks. They were forcing Merrill to sell some of his systems. The two that I was interested in were Yuma, Arizona, and El Centro, California. Interesting systems. They had 10,000 subscribers. Microwave bringing in the four L.A. independents. And in the case of Yuma, those independents plus the three networks from Phoenix. A tremendous package and the highest rate in the industry at that time--$7.50 a month. Justified by virtue of the service you were getting.

I remember flying down there to see the systems. It was the day of the Israeli six-day war--June 10th or something 1967. The pilot kept reporting to us over the loudspeaker the news reports he was getting. And I went down there ... it was very hot in the valley in June and July. I was met at the plane by their chief technician, Marvin Jones. Marvin met me and Marvin was a typically spare ... not a great communicator at that time--a quiet southwestern fellow. His mission was to take me to visit the systems. Unfortunately, the air conditioning broke down in his car halfway between Yuma and El Centro.

I saw those properties, saw the areas. Yuma was a new town that rose out of the Second World War--hadn't even been there. It was a trading spot before that.

SMITH: Practically an Indian trading post, wasn't it?

ROSENCRANS: Yes. But you could see new motels. You could see a lot of new housing. A very attractive area even though it was awfully hot. And then El Centro was more southwestern in the sense that there were many more Mexican Americans living there composed of towns like Calexico, Holtville, El Centro ... some of the names now escape me. A cluster of four or five towns all interconnected. I always loved single headends. I hate a lot of headends because if you try to add something, your problems are a mess. So that was always in our thinking. Bruce Merrill wanted $4.5 million for the properties ... 600,000 subscribers. Which was a high price in those days.

SMITH: 600,000 subscribers?

ROSENCRANS: No, excuse me. A cash flow of $600,000. Ten thousand subscribers and a cash flow of $600,000. Well, you had to stretch to find the cash flow but I knew a little bit about Bruce and I met his attorney Corbett ...

SMITH: Don Corbett.

ROSENCRANS: They were pretty proud people. They never showed a sign of weakness, certainly Bruce wouldn't. He told me that make my offer $4.5 and they'd take the deal. So I said, "I'm going to take the plane home tonight and I'll be in New York until Friday morning ... take the "Red Eye" back from Phoenix. I'll call you as soon as I can give you a firm response."

So I was in the office early Friday morning after being up all night and the only person in the office in New York was David Strass' father, Sam Strass. Sam was 65 or 70 at the time. He said, "How was your trip?" I explained it to him and I said, "These are great, great systems. They've got nowhere to go but up. And I know the guy wants $4.5 million. He's not going to take less. There's no point in telling him $4 million because we're not going to get it." So Sam and I talked about it and we knew that the Morgan Bank would help finance it. We also spoke to the insurance company about putting up $2 million; the banks put up $2 million; and we were going to put up $500,000 to buy it.

So I called from the office and I missed Bruce. I was going to offer him the $4.5 million in the afternoon. But it was noontime, I guess, in Phoenix. So I took the train home early because my son was playing a little league game and I wanted to get there to see his game. So I get home and I'm rushing to get to the game and I call up again and I get Bruce. "Bruce, I want to tell you we're prepared to pay you $4.5 million. I'll send you a telegram confirming it but let me call you after the game because I've got to go see my kid play baseball." And Bruce said, "Great. I'm glad you called because Leon Papernow had just called half an hour before and offered me $4,250,000 but you've got the deal if it's solid." So I went to the game. I have no idea who won or lost the game but I came back, called him again and confirmed it and sent him a telegram. So he confirmed back and there we had a deal.

So all of a sudden we're a southwest company with interesting systems and lots of growth. Now we're up to 25,000 subscribers more or less. So, I think the next event was going public. Values of private cable companies were nowhere in those days.

SMITH: And what was your total subscriber count at that time?

ROSENCRANS: 25,000.

SMITH: You went public on 25,000?

ROSENCRANS: Yes, in 1968. And I think we became effective in December '68. There was a time that some terrible decision came down like two days later from the FCC. You may remember that better than I would. Something to do with distant signals or sending some ...

SMITH: That would have been before syndicated exclusivity and it was probably the Second Report and Order. I'll look that up so we can correct it on the record if I've got the wrong one.

ROSENCRANS: But it was a bad decision two days later. But the deal was done. We'd sold our stock to the public. I don't remember what my reaction of the impact of the rule would be but, again, I didn't think it was monumental but to the public, hearing something like that, it's a bad thing. It's hard to come out with an issue in the face of what looks like bad news.

SMITH: If it was the distant signal rulemaking, the news wasn't too bad news for that operation.

ROSENCRANS: We were grandfathered I suppose. Okay.

SMITH: That's right.

ROSENCRANS: Now simultaneously just as we went public and we raised maybe $2 to $2.5 million gross but after you get through with the commissions and so forth and fees ... $2.2 million. I'm not clear how it came about. I think maybe Jack Cole called me about a company called International CableVision. International CableVision was the first public company in the cable industry organized by the Gunters in Texas ...

SMITH: Oh yes.

ROSENCRANS: ... the La Portes in Florida, and the chairman was a man by the name of Fran LaFarge who was a broker at Kidder-Peabody. They were a public company with two diverse systems--very little to do with each other. One in San Angelo, Texas, and the other in Ft. Pierce and Vero Beach, Florida. They didn't have the capital to do anything and they were anxious to find a way to tie in with someone else who could develop the systems. They had terrible problems with the cities of Vero Beach and Ft. Pierce. I learned that the Gunters were crucial and that I ought to ... I think they were clients of Jack.

SMITH: Yes, I think they were. Jack had just left my law firm and had set up his own. They were clients of Jack.

ROSENCRANS: Jack said, "You've got to meet Ken Gunter because I think you guys would get along pretty well." Ken Gunter ... the guy's from the southwest, a brilliant guy. Ken is well educated, very sophisticated but when it comes to the northeast, he becomes very provincial still to this day. I laugh at him but he's learned a lot but he still doesn't want any part of us guys. He wasn't going to move. At any rate, during January or so they welcomed stock proposals and we were in a competition with Viking, Vikoa the Baums to buy those systems. We went down and made a proposal--a stock exchange--and we won. Here we are with two interesting properties, having used our stock and not used our cash. And we had the cash--the $2 million or so--to do the rebuilds necessary to bring these systems up to some level of quality . Not so much San Angelo because Ken had pretty well handled that. The Florida ones were critical.

SMITH: May I interrupt, Bob. I need to turn the tape over.

End of Tape 1, Side A

Start of Tape 1, Side B

SMITH: You were talking about Ken Gunter and you were just saying that he had the San Angelo system pretty well in hand.

ROSENCRANS: Yes. And I remember meeting Ken in Vero Beach because we had to go ... Even though the deal was signed, we still had to get transfer approval. I met Ken for the first time in Vero Beach. Here's Ken and myself from different parts of the world, different backgrounds, and we were sitting there talking. And I said, "Ken, we've got to have you. You've got the background we need. We'll leave you alone. We'll give you the responsibility for Texas and Florida because Florida needs a rebuild and we don't have any engineering depth in our group at all. I'll make you vice president of engineering, second in command to me. We'll leave you alone. You give us budgets, plan it together ... it's your responsibility." Jack Cole was kind of a bridge. He told him I was a decent guy and you could trust me. So Ken reluctantly said, "Okay, I'll give it a try." Not a huge commitment but he'd give it a try.

But then together we go to the city council committee meetings at Vero Beach. I dealt with the history of my company and what our planning and thinking was. And Ken talked about the engineering needs and how we would put back-up power in; how we would put in a new microwave and improve the signals from the south, from West Palm Beach ... talking gigahertz's to guys that were very impressed. And I was impressed.

The two of us became a pretty effective team. We both liked each other immensely and it looked like something good was coming out of it. Long after we owned the systems actually, we finally got the transfers ... the contract technically didn't close but we were running the systems. Because the man that we were buying ... Barnie La Porte had such terrible relationships with the town that we told him he had to back away or the thing was going to explode before we ever could complete the deal.

SMITH: Now are you talking about Vero Beach or Ft. Pierce?

ROSENCRANS: Vero Beach and Ft. Pierce. He ran both.

SMITH: Who owned those?

ROSENCRANS: Well, that was International Cable Vision but Barnie La Porte was the owner and manager of that part of the two city company.

SMITH: I was trying to call that name back to mind. I guess I'm confusing it with Boca Raton which was Westinghouse and before that TelePrompTer, I think.

ROSENCRANS: Now, again, looking at the cable industry at that time, Vero Beach and Ft. Pierce, particularly Vero Beach, without cable you couldn't get any signal. And that made the issue even more sensitive than it might have been elsewhere because you were truly a monopoly. Ft. Pierce had a little better reach closer to West Palm Beach so people could get something with an antenna. But, again, looking at the territories, you knew the growth was coming--beautiful areas, movement from the south, immigration from all over the country into those markets. So they looked like great long-term growth markets.

San Angelo, not quite the same growth but again had all the characteristics that you'd look for in those days in a cable operation--the need to bring in signals. Without you they had very limited television.

So those 10,000 subscribers between the two of them on top of our twenty-five, in two months we've turned this public company into an engine of sorts. And we put the money to work in Vero Beach and Ft. Pierce. Rebuilt them and in turn the customer counts keep moving up and moving up.

That was 1968 or '69 and then the next ... early '71, I suppose, I think we may have acquired a few others things from the Ft. Worth Telegram. We bought Gainesville, Texas, and Jonesboro, Arkansas, during that period but they were not significant transactions.

But I think the next thing that was interesting in our company's history was in 1970 or '71. In New York City I was always living in the suburbs in parts of New York City. Madison Square Garden was in its peak. They had the Knickerbockers who were a top team in those days--very excited. The fans were very enthusiastic and the Rangers were very strong. The Garden didn't want to sell their home games to local television. In some experimental periods in 1969, '70, '71, they made an arrangement with the Manhattan system to bring a handful of games to the Manhattan system live because the stadiums were sold out. They felt that if they put home games on broadcast they might affect their gate. And I observed this. I'm not even clear how it came up but somebody called me and said there's a man in Pompton Lakes, New Jersey ... Pompton Lakes is twenty-five to thirty miles as the crow flies out of New York City, a suburban town in New Jersey, who has 1,000 subscribers and he's got a franchise--the franchise is with another 10,000 to 15,000--and he's looking for a buyer. At that point you would never conceive of those areas needing cable. You had seven V's off the air. You had another five or six U's--most people didn't bother with the U's. But what did you have to add to complement that. You couldn't bring in distant signals because of exclusivity and all of those issues. And there's nothing to add really if you could. But I said I'm a sports nut so maybe take a little fling here and if we could add the Garden's live events on top of the basic cable service maybe we'll have something. Maybe we'll get people who don't need it, ordinarily would not be a prospect for cable.

SMITH: Now we're talking about the New York City area generally, aren't we?

ROSENCRANS: Yes.

SMITH: And that's where the seven V's were and the five U's?

ROSENCRANS: Yes. Nobody had really gone into the urban markets. However, Irving Kahn had done it in the northern part of New York City but that was a function of the buildings creating so many ghosts that there was a need for cable just to improve the clarity of the pictures. But when you get out into the Westchesters, the New Jerseys, the Long Island suburbs the picture quality was pretty good because you didn't have those problems. There were pockets behind hills and things like that but by and large it was a risky proposition. We took the risk. We were doing quite well as a company and I think we paid $1 million for the franchises and the cable system.

SMITH: And this was where?

ROSENCRANS: In Pompton Lakes, New Jersey. We immediately contracted with the Garden and we built terrestrial microwave or we contracted with the phone company, I think, to make the interconnects from New York City to the Pompton Lakes headend to carry the Garden.

SMITH: You say you contracted with the Garden so casually as if you just went in and asked for a contract. Wasn't that easy, was it?

ROSENCRANS: Well, they already had a pattern that they had developed in the city itself. Nobody had then taken it out to the suburbs. I don't know whether Chuck Dolan was doing that or not at that time. He was developing kind of the fringes of the market in Suffolk County and Nassau County out in Long Island. But he may have had it out there as well. So there was a pattern formed and they had nothing to lose. It was all incremental revenue--no effect on their gate. So we developed a rate something like $7.00 a year per subscriber was our cost, I think, for the eighty-two Knick and Ranger games.

SMITH: And were you going to put it on basic?

ROSENCRANS: Basic cable because pay cable had not evolved in anybody's thinking then--certainly not mine. We thought it was the only way to stimulate the sale of basic cable. It was the first time that I think ... now we had a line for programming in our P&L. Our intention was to sell local advertising on the channel to offset some of the cost--sell to the local banks, local garden markets, supermarkets, whatever. We also felt that if we were successful and we could get the penetration up to a reasonable level, we had a key to all these suburban areas, at least in New York with the foundation of the Garden at the core.

Simultaneously with that Home Box Office evolved in New York City--the pay cable channel with movies--on a tier basis, a pay tier founded by Time Inc. I think Jerry Levin was at the source of that. They were selling the Manhattan system which they owned, I think, putting it on as an extra service. They were also feeding via terrestrial microwave to John Walson. They had to run all the way out there to service Wilkes-Barre, Pennsylvania.

SMITH: They started there with the Pennsylvania Polka. That was the name of their first program.

ROSENCRANS: So, I think, we said, "Now that we've got the Garden, let's put on HBO." We had done some things with local origination on a movie channel. A thing called ... Geoff Nathanson's box where you put a card in which never evolved ... Channel 1. They used to ship us tapes and we put them on and offered them for six, seven, eight dollars a month, something of that nature. The difficulty with tapes was the quality. After a while the tapes deteriorated. I remember we put on "Deliverance" once and you couldn't even see it on the screen it was so scratched and dark. So the idea of getting a feed right out of New York City from a two inch tape player had some appeal. The minute we did it we publicized it and people began to buy it.

SMITH: Was Nathanson's known as Optical Systems?

ROSENCRANS: Yes, that's the company. So we went from the direct local origination into the network concept out of New York. This was 1972 or '73. So with our two things plus a lot of local origination, we began to do a lot of high school things--high school basketball, high school football--town meetings. Some reason to knock on the door and say, "You like movies, we've got movies. You like sports, we've got the Garden. If you're interested in your community, we've got political origination. You don't need your antenna. We'll give you all the UHFs, which you don't bother to get anyway, and the V's." I'm trying to remember the channel capacity at that time. It was probably in the twenty-two range, something like that.

SMITH: I was going to say you were well over a twelve channel system by then.

ROSENCRANS: Yes, twenty-two channels, I think. You had to have that in the New York area. Things had moved to that degree ... 300 megahertz systems, I think, were being built. So we built a 300 megahertz system or a 330, I'm not sure which.

But we began to see some great success with that format, with those combinations. There was all of northern New Jersey unfranchised essentially. You had Vision Cable to the north doing some things in Ft. Lee and that area. You had Peter Gilbert and his group, which is today Suburban, doing some things down a little further south of us. But we had that whole Passaic County area untouched and Bergen County to the north and Morris County to the south. So we said, "Listen, we think we have the key. Let's do a massive franchising job. Let's get these franchises tucked in for other people to see what we're doing."

Now somewhere along that time we had an aborted merger with Viacom.

SMITH: I was going to get into that. As long as you interrupted for that, why don't you tell us about it. How that got started and why it didn't go through.

ROSENCRANS: Well, Viacom was a spin-off forced by the government of the cable operations from CBS. The stock of Viacom was in the hands of many, many people--nobody controlled. Even Paley may have had at most 5, 6, 7 percent of the stock. They had very interesting properties out in the Bay Area in San Francisco. They had that big property in Suffolk County outside of New York. It may not have looked great at that time but they had a pretty good sized company. They approached us about making a stock transaction with us. And in one fell swoop had we completed the deal our controlling group would have been the biggest shareholder of an emerging company because our owners owned so much of our company.

SMITH: You were larger than Viacom?

ROSENCRANS: Yes, and once the deal was completed, we'd have 30 or 40 percent of the stock. So a lot of our people said this is a great opportunity. Here we take a step up and we could really, in effect, control this company even though they're the surviving company and they're the surviving management--don't worry it will all work out. I wasn't certain, I just didn't know. Anyway, we went ahead with it ... we signed the contract. We began to have loads of meetings with Ralph Baruch and others. And although Ralph is a marvelous man, he's a very ambitious man and I got a little nervous when I saw his targets placed on my shoulder. I've never been that ambitious. Our company has kind of developed through opportunism rather than a grand plan. I didn't ever like the prospect of travelling all over the country all week doing different things because I had too much interest in what was going on at home. But I wanted to continue to build a good company. So I was not thrilled with it. Ken was a little uncertain about a whole new cast of characters back into the yard that he'd have to deal with. A lot of things happened in the formation of that merger that I agonized over and soured a little bit. The deal had been announced in the paper. There was arbitrage going on.

Then the government sued the three networks--antitrust suit--and Viacom on the syndication issue. They had complete control of the aftermarket of all these programs and they were leaning on producers who came in to get a show on the network, they had to commit to give the subsequent syndication rights to the network. Viacom had all the syndication rights going to CBS.

SMITH: Then Viacom was really a target rather than just being caught in a spin-off?

ROSENCRANS: Oh yes. They were integrated with CBS. Now maybe in discovery they could have separated themselves but nevertheless the government put them all in the same hat. Here we are, you know, the deal's about to close but we don't want to take our shareholders and company into an antitrust fight with the federal government.

The funniest thing, I remember my family all went to Bermuda for a long weekend. At that time the arbitragers, smelling that there could be a problem with the deal, kept calling. I had been very open with them as the deal progressed. I always answered my phone and I'd talk to these guys, "Yeah, the deal's fine; the deal's on track." And all of a sudden I didn't know what to say to these guys. Now the deal was in trouble. So I'd try to avoid the telephone. Somehow a guy traced me down to Bermuda. And the phone rings in the room and there I am and the guy's asking, "How's the deal going?" I'm starting to stutter because I really couldn't tell him anything. He knew the deal was in trouble. We got back and then, I think, a few days later we called it off by virtue of the antitrust action. And we were back then with a private Columbia Cable Systems. I never felt better in my life.

SMITH: You've never regretted the decision?

ROSENCRANS: No, no. I don't think I'm built for formal big structures ... that need to be a star recorder. We did it but I never liked that part of it. It didn't give you the freedom you needed to build a company.

Just after that we picked up conversations with U.A. Cable Vision. U.A. Cable Vision was a company owned by United Artist Theaters. They had assembled a lot of cable systems pretty much in the southwest and one in Brookhaven through their theater activities. They had about sixty-odd thousand subscribers; we had 75,000. They had no management. We ended up doing a stock swap with them.

SMITH: How did that deal initiate? Were you out looking for somebody to merge with?

ROSENCRANS: No. Through a bank, we had had a conversation ... a former guy at the Chase Bank, their treasurer, I think, had called us. We had a meeting before the Viacom deal so that died but then after the Viacom deal, we picked it up again. We got together, we did an evaluation of our respective cash flows, properties, etc., and we struck a deal. We changed the name to U.A.-Columbia Cable Vision. I was the president, Ken was the executive vice president, Dave Strassler was the chairman. But they had a number of board seats. They really were theater people and they were very happy to find a home where this thing could be developed. I missed something. Prior to our Viacom deal, they had spun-off the cable companies from the theater company and called it U.A. Cable Vision ... sold some stock to the public. So they were a public company and we were a public company. So it was really a perfect pooling of interests type of merger. All of a sudden we had a whole new cast of characters on the board of directors. I think my people looked a little nervous to them and they may have had a little nervousness--we had different cultures.

SMITH: Yes.

ROSENCRANS: They were middle eastern by history, by background. A very strange combination of people born and bred in the theater business. There were two brothers--Marshall and Bob Nathy--lived in San Francisco. Kind of reclusive people. Very strong views on things but could be very charming. They had a guy by the name of Salah Hassanein who really ran their company. He was Egyptian by birth--mother was Catholic and father was a Moslem. He was taught in Catholic schools. He caught the fancy of Spiro Skouras, a theater mogul. Spiro Skouras went to Egypt, because he's an Egyptian himself, to take a tour. While there he was given a young boy from the school to be his interpreter--Salah Hassanein. He was so sharp he said, "I want to bring you back to the United States to work in my theater business." So when he was of age he came back and started as an usher in a theater. Many years later he became the ... I had known Salah Hassanein, oddly enough, when we did the fights because he was running the United Artist Theater circuit and I used to sell him the fights ... Academy of Music in New York, Calderon Theater in Long Island, Corpus Christi in Little Rock where they had theaters. So I got to know him and I got to like him. He was a very imaginative, very gregarious kind of man. A big, bulky guy. So we had more than just the connections that formed in '72. I had a history with Salah so he knew where I came from and I had trusted him. So that helped make that deal come together. After the Viacom deal aborted, we announced, maybe six months later, the U.A. deal. We changed the name as I mentioned before.

So we went from 175,000 ... now we're in the 135,000 class. We've got a little pocket here in New Jersey. We've got another pocket over here in Long Island. And we had some management here that was getting pretty able and we're in the franchising mode so things were really beginning to open up.

Just about 1973, I'm not quite clear of the date, somebody called me from Washington and said would I talk to a young couple anxious to get into the cable business but anxious to work together. Their names were Bill and Kay Koplovitz. So I said, "Sure, I'd love to talk to them." So they came down to my home in Connecticut and I sat around talking to them. Boy, they were interesting people. I said, "Well, I can offer you a job. We're going to start franchising. We've got forty or fifty towns target towns here in New Jersey. Would you like to do that? I can't pay you a great deal but we'll work out some kind of nice commission on the homes we get. You might do well." And they said, "Great, we'd love to do it." So they joined us and started to do the franchising.

SMITH: Was Bill Koplovitz a practicing attorney in the communications field?

ROSENCRANS: No, I don't think so.

SMITH: There was a firm in Washington ... Dempsey and Koplovitz.

ROSENCRANS: That was his father.

SMITH: Oh, that was his father. All right, there's the connection then.

ROSENCRANS: Bill and Kay met at the University of Wisconsin. She had written papers on satellite transmission, believe it or not. None of that in our thinking at the time. And they went to work for us. They became the team to do the franchising. It couldn't have been a year later that the state of New Jersey put a freeze on cable franchising. They needed rules. They wanted a state cable commission. They wanted to do all the things to get the thing under control. So that wasn't great for us because it brought other people into the field and kind of slowed the process down considerably.

Now all our properties are all doing well. We're spending a lot of capital to keep them up to date. Marvin Jones, the man we talked about in the early days of Yuma, I elevated him to director of operations. He became a great manager and rebuilt the Florida systems. He really developed beautifully. So he, Ken and I were essentially the key management team. Everybody stayed where they were. Ken and Marvin stayed in San Angelo, Texas. We have a very good man in New Jersey by the name of Steve Simmons, who ran the New Jersey properties. We broke up into eastern and western divisions, I guess is the way we organized it. Eastern was just the New York market. That was a full plate. Then the rest of the country was the western division.

SMITH: Well, did this New Jersey freeze interfere with your franchising or had you pretty well completed that?

ROSENCRANS: No, no. We were just to the early stages of that. It must have stopped for over a year and a half or two years. But we had gotten some key ones. We had gotten the Clifton, Little Falls, West Patterson areas. So we were able to build a nice nucleus around the original Pompton Lake system. And, of course, as I mentioned, we were using the key marketing tools--Madison Square Garden, pay cable, Home Box Office, and local origination.

That kind of brings us up to the early part of '75 when I got a call from Jerry Levin ... Would I please come in and meet with him? They had something they wanted to talk to me about. We had had some discussions with them about establishing a comparable HBO headquarters, perhaps in Vero Beach or Ft. Pierce, and feeding north and south by microwave and creating an HBO of Florida. And maybe do something the same way in Texas using terrestrial microwave.

SMITH: But not connected with the East Coast microwave?

ROSENCRANS: No, you couldn't. Try to do it where they had lots of market potential and the systems that could be interconnected.

SMITH: You would originate by tape, then? Is that it?

ROSENCRANS: Yes, just as they did in New York, just reproduce that. We examined it. It was expensive, slow going. The process to get CARS microwave, a common carrier microwave to do all of that was laborious. So this had to be the early part of 1975, March or April period, I guess. Jerry said that they were very much interested in trying to go on satellite. The only way they could visualize building that company--the pace they needed to get to the systems--was to go on satellite and would we be willing to invest in earth stations. They'd like us to put one earth station in somewhere to be ready to do it. I said, "How much is an earth station?" They said, "I think it's about $100,000." They weren't sure--$100,000 to $200,000. I think we finally agreed it was probably more like $100,000 ... a ten meter, thirty foot dish. I said, "Gee, I think that's a terrific idea. Let me speak to Ken over the weekend." This was a Friday.

I had watched some satellite things come over from London, England. I saw the U.S. Amateur via satellite at my home sometime before that. The picture quality was a little shadowy ... I wasn't sure. So I spoke to Ken either that night or the next morning and I asked him, "Technically, is this a sound plan?" And he said, "Well, you're going to have the best picture in the world. There's no reason for it not to be perfect if you have the receiver." A ten foot dish would give you plenty of margin for error. As far as the expense was concerned, we were thinking of setting up much more expensive studio equipment or equally as expensive studio equipment to feed ourselves anyway. All the personnel you'd need to do it, $100,000 for a dish was a lot cheaper than the other costs associated with reproducing a Home Box Office for your system.

SMITH: I hadn't realized that.

ROSENCRANS: Sure, it's a passive receiver. Once it's in, it runs. So I called Jerry and said, "We discussed it and doesn't this make sense for all our systems?" He said, "Absolutely, as long as you're not a 2,000 or 3,000 subscriber system but certainly 10,000 or better." And we had seven fairly big systems in place at the time. So I called Jerry on Monday and said, "I spoke to Ken and technically we're comfortable with it and we'd like to announce seven earth stations. Do the first one in Florida." They were trying to key it to the September 30 date because that was the "Thrilla from Manila," the Mohammed Ali heavy weight championship fight.

We had a lot of work to do. We called Sid Topol on the phone and he said he'd be able to get a dish to us, and erect it and have it in place by then. The biggest obstacle really appeared to be the application we had to make to the FCC, getting through all of that. Any objection, as you well know better than anyone, can stall it a long, long time.

SMITH: It can and there were plenty of people to object.

ROSENCRANS: Oh, everyone. And to this day I don't know why they didn't. I don't know why the networks didn't object on some obscure theory. Why the film companies wouldn't somehow find fault with it. Why local stations somewhere in Vero Beach wouldn't object to it. Even if it's frivolous, it does stretch out the schedule. I remember Wiley was the commissioner, head of the FCC at the time. He was very alert to what we were doing and very sympathetic towards it. We went to see Quello. I don't remember who the other commissioners were. You'd remember who they were but we went and paid personal visits on them. They all liked the idea but they said, "If there's an objection that comes in we have to deal with it under the law." But sure enough the thirty days passed and I couldn't believe it ...

SMITH: I can't believe it either.

ROSENCRANS: Somewhere in May or June it went through the thirty days and it was done. I don't know that it got that much publicity although we did a big public relations job at the convention to announce it so that certainly it was big in the trade press.

SMITH: That was the New Orleans convention.

ROSENCRANS: Yes, and it was in the Wall Street Journal. It was in major stories. But maybe somebody said, "How can I object to this? I'm going to use up some capital in Washington with the FCC and I don't know if this frivolous objection is going to hurt my business or interfere with this or interfere with that." Whatever reason, we were thrilled. We got the notice, it was done. At that point we could begin to prepare the construction ... pour the cement and begin to think in terms of hitting that date. So that's where we were. So remarkably everything was still on course.

SMITH: You and Ken made that decision for the company?

ROSENCRANS: Yes.

SMITH: You didn't go to the board of directors?

ROSENCRANS: No.

SMITH: And you were merged with United Artist by that time?

ROSENCRANS: Yes. We had the capital to do it. We explained it to them all on the phone but we didn't put it to a vote.

SMITH: I think that's great.

ROSENCRANS: It's a part of our business, you know. And $100,000 a system, you can argue that it will save us a lot of other expenses and it's going to give us the ability to sell a new service--the Home Box Office service.

SMITH: But you were sufficiently satisfied with Home Box Office as a service by that time that you didn't consider you were taking a major risk?

ROSENCRANS: I guess we were. I didn't realize that Dick Munro and Jerry were on the spot if this thing didn't come together ... they were going to pull the plug. But, again, our risk was limited to the capital investment. If it was a complete failure, we had seven dishes on our hands and we could find a way to sell them to someone. It seemed like a reasonable risk. Years ago we went out and bought ten or eleven channels for $5,000 each or whatever they were. I mean it wasn't unusual. You could see the advantages of it. Of course what we didn't really focus on at that point was the fact that the satellite feeding it had twelve or twenty-four positions for other channels. It wasn't like a single shot.

So we had a lot of work to do. We went down to Florida to find space for this. Land was very valuable where our headends were. The man that owned an area which was presumably going to be an entrance to the Sunshine Parkway was in the cable business ... owned Wilmington, Delaware. He was in the extermination field.

SMITH: Rollins.

ROSENCRANS: Rollins. He saw us coming ... I've got you guys where I want you. And he wanted a huge amount of money for that piece of land because someday the state was going to use it as an entrance way to the thruway. So fortunately we found a farmer who was adjacent to it who didn't need the land and we leased it for some nominal amount for a long period of time. I was so happy to tell Rollins we didn't need his land anymore. And it was right next to our headend. Then they poured the concrete and the construction started for that ten meter dish sometime early in September.

In the meantime, of course, Scientific-Atlanta had been building it. Sid, God bless him, told me he'd have it there on time, it would be in place, and it would work. And, I guess, we finally completed the construction and got a signal from space on the day before. They started sweeping the headend off where the controls were and I said, "Now we're in business."

You've got to visualize our system there. We were right between Vero Beach and Ft. Pierce probably a fifteen mile distance or seven and a half mile, somewhere in the middle. Our system had been rebuilt but it was a lot of miles of system. We were determined to hold the party on the beach at the Holiday Inn. We invited city officials, people from the FCC, the press, industry company representatives. They were all there. We had a ballroom at the Holiday Inn.

SMITH: Can you remember some of the FCC commissioners who were there?

ROSENCRANS: I'm not sure, I said that quickly. I'm not sure about commissioners. Was there a Bill Johnson?

SMITH: Yes, there was a Bill Johnson.

ROSENCRANS: He was not a commissioner. I don't think we had any commissioners.

SMITH: Bill Johnson was staff--past media bureau chief.

ROSENCRANS: A very thin fellow, right?

SMITH: Yes. Very much so.

ROSENCRANS: He was there.

SMITH: I had the impression that there was a commissioner down there but I guess I was wrong.

ROSENCRANS: Might have been. We had to take that into our headend signal from the satellite. Once we saw the picture you knew ... they were sending test patterns and other things up and down from Vernon Valley. Now here's a signal coming from Manila to the West Coast via the satellite COMSAT and then, I think, long lines to Vernon Valley in New York.

SMITH: Oh, really.

ROSENCRANS: Yes. I don't think there was a domestic satellite at the time. I may be wrong about that.

SMITH: I didn't realize that.

ROSENCRANS: I'm not sure. Somebody else could ... Andy English might has a few on that. But I think it was the Intercontinental Microwave. Then out to Vernon Valley on some New Jersey belt loop. And then at Vernon Valley transmitted up to the Anik bird ... the Canadian, I think. You know these things kind of merge. And then we get in down into Florida off the bird. So you had all those paths. And then you're going through maybe one hundred miles of system to get to the beach and then an underwater cable under the Indian River, up onto poles on the beach area. Maybe a quarter of a mile from there into the Holiday Inn, into the ballroom and into the sets.

Well, when the fight came on and I flipped the switch at about ... I don't know what time it was in Manila--probably a twelve hour difference--when they were fighting but it was like five or six or seven o'clock at night here in the east. On came the fight from Manila and when you looked at the close ups, they looked like they were in the next room. The picture quality was so extraordinary. As a matter of fact an arch enemy, a guy by the name of ... a man who was a thorn in our side. Every time we went for a rate increase in the Florida areas, he was all over us. He hated the big company from the very beginning. He stood up at some meeting and accused us of degrading the local channels in order to make our pay service look better visually. Bill Lucas was his name. I don't know where he is today.

SMITH: That wasn't an uncommon charge in the early days.

ROSENCRANS: I guess so. But there we were with pretty much a pure feed as compared to the pictures over terrestrial microwave coming all the way from West Palm Beach and other things. So we put it on and, God, we knew we had a winner. No question about it. I think also ATC put one on the same night down in Jackson, Mississippi. But my deal with Jerry was that we were the first.

So it launched and the movie that night was the "The Gambler" with James Caan, which was a good movie. The service clicked immediately, people bought it. The picture quality was great and then we put them into San Angelo, Texas; Ft. Pierce ... We even put a dish now in New Jersey. We cut the terrestrial link because the picture quality was much better. We also put it in Yuma, El Centro, the Pasco-Kennewick area, and out in Brookhaven. Those were the seven.

SMITH: You really straddled the country.

ROSENCRANS: Yes. There were a lot of people in the industry that weren't sold on it, even John Malone. I remember being at a convention early the next year ... he was not sold on satellite yet. I was surprised. He still didn't know it was economic but it was the most economic thing in the world.

SMITH: I stayed in that Holiday Inn when I represented the city of Vero Beach, not that that makes it particularly famous, but I wanted to ask if you went to that restaurant across the street from it?

ROSENCRANS: Ocean Grill?

SMITH: Ocean Grill. That's one of my favorite restaurants. I love that place.

ROSENCRANS: Well, we had a dinner that night after the show. We had big tables and Irving Kahn was down there as well. He saw satellite before any of us did.

SMITH: Well, he'd have to be there.

ROSENCRANS: He was lurking around. He wasn't part of the party or anything. Nobody had invited him. But I said, "Irv, why don't you join us for dinner?" And after dinner I introduced him and everybody. He and Hub Schlafly really had that vision a long time ago. It was ironic that I had never heard about it from them but it was there, and time and circumstances permitted me to play that role. But that was a nice part of town. That's why we picked that hotel. You're familiar with it.

SMITH: Right on the beach.

ROSENCRANS: Right after that, I think, Gene Schneider jumped in and ordered some dishes. At that time they were approving ... everyone had to be approved by the FCC. It wasn't open season. There came a time, I don't know when it occurred, but smaller dishes were ...

End of Tape 1, Side B

Start of Tape 2, Side A

SMITH: Bob, I think we're close to concluding our discussion about the satellite cable transmission from Vero Beach and Ft. Pierce, Florida, which marked the beginning of HBO's use of satellite transmission. Had you concluded your comments there?

ROSENCRANS: Let's see. We were talking about the additional units that went up in our company and others around the industry.

SMITH: Yes, you had.

ROSENCRANS: Everyone kind of began to see the merit. Obviously, ATC, a unit of Time Inc., became involved very heavily. Looking at your board over here I noticed that it was in '76 that the Commission approved a four and one-half meter dish which made it a lot less expensive to take that step and probably sped up the process of even equipping small systems with dishes.

SMITH: Yes. At $75,000 to $100,000 a dish, it would have been difficult for small systems.

ROSENCRANS: And then ultimately, I guess, the three meter dish became available so the cost went down below $10,000 at some point.

SMITH: You mentioned that Irving Kahn was down there. I was going to say "quietly" observing your ... But that's the wrong word, isn't it?

ROSENCRANS: You could spot his red Jaguar everywhere. He was as irrepressible as ever.

SMITH: Irving, as everybody in the industry knows, is one of the great visionaries; and I'm curious as to whether you recall any comments, in particular, that Irving may have made after observing what took place down there.

ROSENCRANS: No, I don't recall any. He was just very complimentary.

SMITH: Was this before Irving's vacation?

ROSENCRANS: No, after it. So he wanted to be rehabilitated so I think all of this was helpful.

SMITH: I understand that TelePrompTer, itself, shortly afterward installed a lot of earth stations for HBO.

ROSENCRANS: Yes. Russell Carp, I think, was head of TelePrompTer. He liked it very much. Gus Hauser of Warner was very alert to it. I think one of the last ones to do it may have been TCI. I think that could have been a financial issue as well at that time. But they came out with a vengeance.

SMITH: Surely this had to be one of the most significant developmental events in the history of the industry.

ROSENCRANS: Well, I think all of a sudden overnight the cable industry became a network. Instead of the terrestrial microwave being the key to adding signals, all of a sudden every system in the country was eligible to be interconnected. The economy of it, when you visualize that the cost of a transponder is the same if you're feeding one or a thousand, here you are with your cost in place and the ability for all these different systems--thousands of them--to receive the signal. HBO went from a little regional service to a national network in a matter of six months or a year.

As I mentioned before, the very fact that the satellite transponder had, I think, twenty-four positions totally--twelve on one plane and twelve on another. I think HBO, I'm not quite clear when, felt that they needed a separate feed for the West Coast because a lot of the R-rated movies didn't want to be shown late in the afternoon. They wanted to start those at eight or nine o'clock eastern time. In order to keep that position, they added a second West Coast feed. So now you're using two of the transponders.

Then, I think, Viacom said they have to go up on satellite. There was some concern. I remember people at Paramount had mentioned to me very angrily at the New Orleans convention ... "You can't put a film up on satellite. You're going to destroy the entire distribution pattern around the country." Because films had been distributed on a market-by-market basis. So a film that is shown in New York in January might not get to Kansas City until April and to Paducah maybe in June. The minute you put it up simultaneously six months later on HBO, you've destroyed the theater pattern. Therefore, they told me, the movie companies would never give us films because it destroys their distribution pattern. But that was not the case. They all provided the films because they saw a source of revenue evolve. And even the theater people in our company who could sense that this had a profound implication for their business ... not sure quite what, but significant--movies in the home as opposed to the theater, didn't object to it. They felt it had to happen so might as well be on the team rather than fighting it.

But also the implications went way beyond just the theater motion picture business and the cable business. It also affected the broadcaster dramatically. The broadcast industry, the networks, have always had that umbilical cord up until now to the local station and that was really the only way the station would ever get programming unless they got a videotape from somewhere. The only convenient way was to feed it down the AT&T umbilical cord into the system. So the impact on the networks was all of a sudden a station had a few more options as to what to carry. He could position his dish to pick up other ... Maybe I'm jumping ahead.

SMITH: Go ahead.

ROSENCRANS: But the networks ultimately began to do their feeds to each other. The network fed their programs via satellites instead of long lines ... late 1970 period, I guess. And the minute they did that station x could pick up some independent feed from somewhere. So the hard core structure of the networks that was so solid and so permanent apparently in the '60s and early '70s all of a sudden ... the technology was showing some leaks.

SMITH: Exclusive affiliation agreements were ...

ROSENCRANS: They had to give way. If the station felt they could do better with another program, they ... The networks couldn't just tell you to get lost. There was no alternative. So it had profound impact on the broadcast business. And probably if you could see into the future at that time you could see the decline of the networks relative to their environment. They had the world by the tail prior to that. Their world was much better off with two or three or four signals. Cable couldn't help them at all. It created competition for programming. It created all kinds of things.

But getting back to the capacity of the transponder, I think in around '76 or '77, Ted Turner put up TBS on the bird. Made it available to cable systems nationally. A basic cable service but it was still the retransmission of broadcast signals--that was still our business. I'm not quite clear how the idea evolved but we were doing the Garden games on our local systems in the New York market still via microwave because it was not on satellite. And we had built a little distribution system via terrestrial microwave to feed to other New York area markets like Haverstraw, Peekskill, Dover ...

SMITH: These were markets where you did not own the cable system?

ROSENCRANS: No, we just acted like a common carrier almost. It was a CARS microwave so each person owned their next link. And we managed it so we made some monthly fees. It wasn't much. We were just cooperating with the Garden to increase the size of their network because they wanted to put their programming out everywhere in their New York City market. So I went to Joe Cohn ... Joe was handling the Madison Square Garden network. Tony Wergland was head of the company at the time.

SMITH: You called it a network and said ...

ROSENCRANS: A local regional network.

SMITH: Okay.

ROSENCRANS: Because it was interconnecting all cable systems in the New York market ... Mike Burke. We got the time on the satellite--the satellite's available for distribution. The games are being produced anyway so let's put them on the bird and we'll offer them to cable systems at a fraction of what we sell them for in New York because the interest obviously dilutes the greater the distance dramatically. And maybe they're worth ... and I think the number was something like a quarter of a cent per subscriber per game. So the numbers were small but when you multiplied them out and if you could generate enough systems and enough subscribers, it was all incremental revenue to the Garden. We were responsible for the management of it. Kay Koplovitz who was with our company was obviously the most talented person we could find to put in charge of the Madison Square Garden network. So we announced it at a convention. I'm not sure the date--it had to be 1977 or '78. It was called Madison Square Garden Sports. We fed the games to the convention and we began to sell.

So that was occupying a transponder. We were buying a protection transponder for one thing. We didn't really have a top first class transponder. We were buying one that we could have lost had HBO gone off the air for argument's sake. If something failed. Our risks weren't that great because we weren't investing that much. Each cable system ... we'd just have to lose time I suppose. So we were occupying almost three or four nights a week during the season--maybe October to May--with the Knicks and the Rangers, an occasional college basketball doubleheader, the Westminster dog show, the horse show.

Again a basic cable service. And we were going to sell national ads because it's basic cable--it's not pay. And we were going to give the local systems moments and minutes to sell local ads similar to what we were doing in New Jersey. Just transposing that pattern which we had started back in the early '70s to a satellite feed.

So the Garden said, "Well, this sounds interesting. We've got nothing to lose. Let's try it." So we picked the convention. I'm not clear what year, '78 maybe, and we announced the Madison Square Garden Sports network--satellite network--and off we went.

Simultaneously with all of this a man by the name of Brian Lamb, who I had gotten to know because he was doing work at CableVision magazine ... He had come up to Westport and took a picture of me for an article on our company using the Alpine tower for our distribution. He had some interesting ideas.

He thought somewhere, somehow we ought to get the House of Representatives, the federal government on cable. His only option in those days was to use tapes--bicycling tapes. You know, have a studio and Congress would come in and tape five minutes and ship it to his cable systems and that would be the means of communication. I wasn't too stimulated by that. I thought I'd like to get the government out to the voters but it was too cumbersome. It didn't accomplish a great deal and it wasn't timely. And then the House decided to put the cameras in ... approved and they installed the cameras. Brian says, "You've got the Garden network up there and you're on mostly from seven o'clock on, how would you feel about putting the House of Representatives on during their day time ... whenever they're on?" I said, "Now you're talking. That sounds terrific." Live television because I wanted to keep this whole thing in the framework of something timely. Live television and Brian had the National Press Club in mind for occasional lunches. And some other things. And I said, "Gee that really dovetails with what we're doing with the Garden. We were simultaneously developing a children's format called Calliope which was to precede the Garden.

SMITH: By we, you mean the Madison Square Garden Network?

ROSENCRANS: Yes, Madison and ourselves. We went to Learning Corporation of America and leased their Library and built an hour and a half format or hour format every day to kind of precede the Garden but give us a little variety between live sports, children's programming and now public programming in the afternoon.

So Brian came to one of the NCTA board meetings and I was there. I wasn't on the board ... I don't know quite how that all evolved. But we talked about this and I said, "Brian, this is the greatest idea I've ever heard. How much money do you need?" He said, "Well, I think if twelve companies can commit $25,000 in seed money, I think we could put this together. We don't have to pay for cameras. We don't have to pay for the labor but we have to buy transponder time. We have to build a little organization to do the National Press Club and studio and so forth and go." I thought it was a tremendous idea. So I said, "Okay, you've got our $25,000." Ken, of course, was with me and we concurred. "You've got our $25,000." So they named it C-SPAN.

SMITH: It came about that way.

ROSENCRANS: Very quickly I got Russell Carp to come along from TelePrompTer and Gus Houser. Eventually every one of them ... they all came along. We even threatened in our franchising. We said, "We're a founding member and I'm chairman of C-SPAN." People loved that kind of stuff. It forced all of our opponents to come and join. They couldn't be without it. Unless you participated, you couldn't carry it.

SMITH: Was that true that you couldn't carry C-SPAN unless you were a member?

ROSENCRANS: Oh no ... unless you were a member, unless you were a contributor.

SMITH: I didn't realize that.

ROSENCRANS: At that time. I don't know whether the rules are different now. You just have to pay your ... But the seed money had to come from the top ten or fifteen companies.

I remember Brian, the travail of putting in the pad. It was raining in Washington and we were scheduled to go on the air at some point with the House and Brian couldn't get the cement poured because it was too wet. He was sloughing around in this mud and everything. But it was out there somewhere in northern Virginia. Scientific-Atlanta, again, built the earth station. We finally got enough length, fed the lines from over into the House and fed into the system. Put it on our Madison Square Garden Sports whenever they came on. Our network was kind of interesting. We had those three components. And it was the first proprietary cable network. TBS was merely a reproduction of an existing signal. Proprietary basic cable network, excuse me. HBO was proprietary but that was a pay network and Viacom didn't pay. But this, MSGS, was the first. So it was really was, I think, the forerunner of CNN and ESPN, etc., etc., etc. So it was the first one.

We were supporting ourselves with a combination of fees from the cable companies plus national advertising, which is the format that evolved for everyone. It's the reason the networks have advertising but they have no fees. But that was essential. Like a magazine, you had to have a subscription price plus the advertising. Bill Donnelly of Young & Rubicon sparked to it and through Young & Rubicon we got the first sponsors. Gallo Wine was one, an airline, one or two others.

SMITH: I think you had Holiday Inn, didn't you?

ROSENCRANS: Yes. That was the first time that there was national advertising on a cable network. The picture quality was great. They used to complain down in Arkansas ... "What do you put the Rangers on for? Nobody knows anything about ice skating down here." They liked basketball.

SMITH: They'll learn.

ROSENCRANS: But it moved right along and then ... I'm covering a lot of ground, but the leagues looked at this--the National Basketball League, primarily--and said, "We don't want the Knicks out around the country. That's a local team. They're infringing on the rights of all these other teams' territories." So we sat down with David Stern, who is now the commissioner, who was an attorney for the league. The Garden was cooperative because they were a member of the league and didn't want to violate the rules. We changed at some point, I think like 1980, into a league contract. We dropped the Knicks but we did league originations like twenty-five or thirty games a year ... like Thursday night basketball game of the week. We did a league contract for three years. I think it was $300,000 or $400,000 the first year ... $500,000 ... $600,000. At the same time we worked out a deal with the hockey league. They never took the Rangers off the network but they added their games because they were looking for television revenue.

And then we had an interesting experience. Had a meeting with Al Rosen. Remember Al was the great third baseman for the Cleveland Indians?

SMITH: I remember the name very well.

ROSENCRANS: He was the general manager for the Yankees working for George Steinbrenner. I got together with Al and we worked out a thirty game Yankee major league baseball series originating from Yankee Stadium. Like a Tuesday game of the week, whatever the name--maybe Monday. Entered into a contract with them. The minute it got any publicity, major league baseball jumped all over us ... "You can't do that. You can't take the Yankees and put them all over the country." Same issue as the Knicks. So I said, "Look, the game's tomorrow night. It's a Boston/Yankee game. That will be the last game. Let's work out a league contract," just as we did with basketball. So we played the first game. It was like a fourteen inning game. It was a tremendous game. Went until like two or three in the morning. The next day George Steinbrenner was all over me on the phone. He wanted us to continue the contract. I said, "You know the contract was based on meshing with the rules and with the league. The league says we're violating the rules. We're not going to do that." He was a little more aggressive. But we worked out a contract.

During this period Kay came up with the idea of changing the network to USA Network, no longer Madison Square Garden Sports. So we became the official cable arm for national league baseball, basketball and hockey. We began to do our basketball games. The other thing that happened, Bob Johnson came to me at one of the shows ... he wanted to put on some Black entertainment. Would we give him like two hours on a Friday night every week?

SMITH: I'll identify it for the record. Bob Johnson is the president of Black Entertainment Network?

ROSENCRANS: Black Entertainment Television--BET.

SMITH: Yes, that's right.

ROSENCRANS: So I said, "Gee, that sounds great, why not." It would increased the appeal of our network. I thought it was a good thing to do. So we gave him a couple of hours.

SMITH: Was that of your transponder time or just on your network?

ROSENCRANS: We owned the whole transponder so it really didn't cost us anything. Just gave him an opportunity to put that kind of programming on. I thought it was good for our image in the cities ... something we should be doing.

So we had a lot of components and the thing was getting much bigger. It required a lot of investment and people to run a network. It was an expensive proposition. During this period CBS had launched CBS Cable and poured in loads of money. ESPN, which was a lark, which was purely a regional thing at the beginning for the state of Connecticut--for University of Connecticut sports--somehow they went bankrupt and were bought by Getty Oil. So all of a sudden here's Getty Oil coming in and is going to start competing with us for the league contracts. We didn't like that prospect. Ted was out with CNN and some other things. The business was heating up and programming was becoming the byword. Basic cable was always the thing, the engine that made the industry go. I didn't feel that we had the long-range view of it. We didn't have the resources to play that game.

So in '81 when we sold our company ... U.A.- Columbia at that time was sold. That's a whole other story.

SMITH: We'll get into that perhaps another day because that's a long story.

ROSENCRANS: Ted Rogers was one of the buyers and we negotiated a deal. We sold USA Network then for $30 million to Paramount, MCA and Home Box Office. We had no investment. We had really run that whole thing at zero cost which was remarkable because we had so much product without cost ... to the Garden, to the joint venture. So we sold it in the summer of '81, I think it was. I regret that today. It would have been fun. Kay, one of the first employees, is still there. Doing a fantastic job. Probably the leading woman in the communications industry.

SMITH: Could you say something about her for the record? I got the impression from reading a press report quotation from you that it almost seemed like you woke up one morning and discovered you were in the network business because, you said, that you had developed the children's program and then she was developing a program on economics ...

ROSENCRANS: The Barrons program.

SMITH: Yes.

ROSENCRANS: We were looking for niches to build a diversified network. We never had the view of building a single news network, single sports network. We were more inclined to the broad, typical network approach. Even today, USA is still more diversified than the other networks--drama, Madison Sports, there's some women's programming and so forth.

But all of this evolved never in a master plan. Nobody sat down and said, "We're going to start here in '78. This is where we're going to be in '79 and '80." It was totally opportunistic. We were not willing to put a lot of money into this to the damage of our cable business. That came first. We didn't want to risk anything. I learned that from Bruce Merrill and the AMECO days. You could get swamped and take the money out of your cable system and put it somewhere else and really be in trouble.

So we avoided that and that's why our approach was always step-by-step. What can we do that we can do economically and add value? As I say, we reached a point where the competition for the sports rights, just conducting the network, became a much bigger, more professional thing.

But Kay had not only the ambition but the ability to deal in large concepts. She was unflappable. All kinds of disasters could occur but Kay never let it affect her demeanor. She got to know so many people in the process. She ended up doing the U.S. Open before the network picked it up in New York City. She did the Masters' Thursday/Friday golf games prior to CBS doing it. I believe she still does.

She had tremendous capacities. She was a very good business person and a very good manager. I admire the fact that people that have worked for us back when we owned half of USA are still there. She's remarkable in that respect. She happened to be the leading woman, I think, in the industry by far ... in any industry but nobody really knows it. She doesn't publicize herself that much.

I think as I mentioned earlier, Brian Lamb came to us with now the concept of the origination being provided by the House of Representatives itself and that we accommodate the C-SPAN service on the Madison Square Garden Sports. It was, again, a perfect fit time-wise and gave us a lot of dimensions. Now we had public service programming, children's programming, sports and a lot of other ideas. The Barrons thing never materialized. I think there was a lot of concern about something being said that could be construed as being tips. We also, I think, spoke to the Wall Street Journal on occasion with the same ideas. They haven't evolved as much as I expected until recently with CNBC and the Financial News Network.

But our objective was to build a broad-based network with a lot of different elements to it and each one drawing perhaps a different audience. But we did some women's programming. We had conversations with Hearst Magazine about taking their monthly magazine and converting to video the lead story, whatever that might be. Using the techniques that they used on the civil war program ... panning the magazine and voice-over. Instead of going into a very expensive kind of production, trying to limit that.

But Brian starting then with several programs, one being the National Press Club luncheons. Then there was another program with high school students coming from all over the country. The name escapes me at the moment but they would come and interview congressmen, senators and administrative officials. They would tell them what their functions were and what policy issues were and so forth. So that was another facet of it.

Brian's distribution grew very rapidly. His cable systems felt it necessary to carry that service. They were getting political pressure, in effect ... "Why don't you carry the House of Representatives?" Even though this was during a period of scarcity of channel capacity, C-SPAN I really made some tremendous inroads.

The programming just improved and increased. The organization got larger. We funded it by an assessment per month/per subscriber. The capital money came from the seed money we talked about earlier. The $25,000 put up by perhaps twenty companies to build the earth stations and all the equipment. But the ongoing budget is carried by assessments of about three cents per month per subscriber. So thirty-six cents a year times 50 million cable subscribers gave a budget of about $18 million. Brian got into two-way question shows from the field.

SMITH: Call-in shows?

ROSENCRANS: Got into all kinds of hearings. All the important hearings that just aren't available on stations, networks, PBS and others have been available on C-SPAN in their entirety. Brian has perhaps put the most important imprint on the network and that's keeping it completely unpolitical. Brian is simply presenting to the public at home what's going on. Without commentary, without afterthought, without any imposition of anybody's viewpoint other than the speaker who might be on. Our purpose is just to bring the subscriber into the Washington enclave rather than try to explain it, to take part in the process. We are a reporter, a pure reporter.

Brian has kept the integrity of that position a very important thing and it's the reason it has survived and has everybody's respect. Somebody might claim it's slanted on the liberal side and someone else might claim it's slanted on the conservative side. Well, that's purely a function of who you might have seen that day. And that was essential. I'm a political animal in some respects but I recognized from the very beginning that that position was crucial or otherwise you'd always be in a PBS type of position and it wouldn't work.

So Brian, again, it's marvelous to see the one that starts still there down the road. Again the same kind of people--the people he started with. Brian Lockman, production head, still there. First man on a camera we ever had. Jana Dombrosky, first person in the office, still there. He has trained some tremendous people. Now they have a staff of 300 people in there, just remarkable people. They're all imbued with the concept of how to run this particular network. And I think Brian is known as well as anybody in the city of Washington. Everybody knows him and everybody respects him. He's a unique person and he would be a proper subject for an interview here as well obviously.

SMITH: I had asked him, Bob, and he has said he would do it. With him it's a little bit like getting John Malone to sit down for an interview. Everybody's willing but they're pretty busy.

ROSENCRANS: Well, Brian's right in the middle of interviewing himself.

SMITH: Yes.

ROSENCRANS: And his interviewing technique is remarkable. He never imposes himself, he simply opens up the stream of consciousness of whoever he's talking with. He has created an enormous respect for himself and C-SPAN and we're hopeful that that respect translates into respect for our industry because we treat it very carefully. There's not a person in our industry that wants it to be anything different than it is.

SMITH: No. And it is one of those things that everybody in the industry can point to with pride and say this is something the industry did. Brian Lamb did it with support from the industry. We all recognize it as that halo around the industry's head that we can point to.

I'm the interviewer not the interviewee but I'm going to make a statement. I was in C-SPAN's offices a couple of weeks ago. Brian was out of the country but I knew a couple of people there and spent an hour and a half. I was utterly impressed with the admiration that those staff people have for the organization and for Brian Lamb. Some way or other he's got them all convinced that they're performing one of the finest public services that they can, and I'm sure they are, and everyone of them is aware of it.

ROSENCRANS: Yes. Well, it's interesting. Now that we're conducting the interview and I think back about two people that were moved out from kind of our company even though Brian never worked for us. In fact, we gave them the framework to start. And I'm talking about Kay and Brian. It reminds me of the way we always organized our company. I think we talked about it earlier with Ken and Marvin Jones. We adopted from the very beginning a highly decentralized approach to the business. We always felt that cable is truly a local business. There are a lot of national aspects to it with the programming and things of that nature. And the engineering is a more universal concept. But the matter of dealing with each community ... each and every community has its own components and you had to let that happen locally. It was the only way you could assure yourself that you were responsive because the home office doesn't know what's going on in the field. You can't. You had to give the manager the tools to be quickly responsive to deal with problems and the community had to respect the fact that he had the authority to do things. That he wasn't just an office boy sitting there and couldn't move without authority.

A lot of the companies in the industry developed another way. They developed in a highly centralized way. Everything went from the top down and a lot of those companies have suffered tremendous franchise problems. It is not a difficult business to be effectively decentralized because it's susceptible to planning. It's not a seasonal business, it's not a fad. It's got many elements of a utility company. You can reasonably plan a year, maybe two years, in some detail as to income and expenses. So our system evolved with a budget prepared at the managerial level. And the manager often used his department heads to even build up their department budgets into the system budget. Then their budgets are passed on to our corporate office. We study them, we analyze them, we ask questions ... maybe there are changes made. But fundamentally, when that budget goes back to them, it's his plan. It's not our plan and we're telling him you've got to do this, that, and the other thing. This is your plan and the chances are under that framework he's more likely to succeed and reach his plan than if we tell him what to do.

And we always have the same view of marketing although marketing certainly has become much more complicated in the last few years than it was when we sent out Mother's Day postcards. Again, if you impose things on a system, it's very easy for them to say, "Well, it's not my plan. I knew it wouldn't work from the beginning." But you want to give these managers a stake in the operation. You want to give everybody in that operation a stake. And we evolved this yearend bonus programs keyed to subscribers, things of that nature. I think in that way we built up a great spirit in the organization. A sense of being local, being part of the bigger thing, but they really had the responsibility. It's easily tracked on a month-to-month basis through financials. You can see where you are. And the manager has complete authority to spend his capital budget subject only to things that happen that we wouldn't know about. He's got to let us know what's happening ... something that might affect the budget positively or negatively. So we might have to rethink the plan and do something differently. But the assumption is that he's carrying out the plan, based on his plan, and the results will be there. If we see we're off track, we can always regroup and approach it again.

But it's a decentralized structure that most companies have to go to if they're going to keep their communities contented, responsive, and susceptible to renewals ... customer relations. It's a very important part of the business.

SMITH: We're at the end of the tape again.

End of Tape 2, Side A

Start of Tape 2, Side B

SMITH: This is Tape 2, Side B of the oral history interview with Robert M. Rosencrans.

ROSENCRANS: We were reviewing the method with which we controlled all of our operations.

SMITH: Oh, yes. You were contrasting centralized versus decentralized organization.

ROSENCRANS: The benefits of the way we operated, we attracted and maintained and kept very strong management people. I think the reason Kay flourished with USA was because we simply gave her the responsibility and didn't micro-manage everything from our corporate office. We did impose pretty strict engineering standards on everything because we felt that that was not a skill that somebody could afford to build in a system. You had to look for that outside. We never built an in-house legal force because, again, we felt that we'd be better off drawing as we needed it from the professionals in the field. We made accounting highly decentralized because we wanted to be sure that the accounting information was available to the manager before he came to us because otherwise he would always be trapped and caught in an embarrassing position and he should have a chance to correct it or comment on it or explain it before we saw it. So accounting has always been directly under the manager with a dotted line to our corporate accounting so that the procedures, terminology, standards, etc., were all consistent.

So many of our people are still in the industry--in the Pioneers Club. One was just added this past month--Earl Quam. Earl was one of the great practitioners of decentralization.

SMITH: I don't know him.

ROSENCRANS: A very able guy, unemotional. He just saw problems, corrected them, lived by the budget.

SMITH: In your emphasis on local autonomy, maybe that word is too strong, what was your policy in terms of encouraging or discouraging local originations?

ROSENCRANS: Well, local origination's a mixed bag. There were markets where local origination, number one, was required by the franchise, something you had to do. There were other markets where we used it as a marketing tool, like New Jersey where we never really had it as a franchise requirement, at least initially. And it became a very difficult process because it has a life unto its own. It eats up time, it eats up capital ... the equipment keeps breaking--cameras. They always knew what camera to use. You really wonder how many people are actually watching it out there. It's a great cost center because there's no way to generate income unless you attribute some of your system income to it. But it's not realistic to do that. So you have to look at it as something ... you want to produce professional programming but you want to control it so it doesn't just eat you up.

We got very ambitious a couple of years and we did a nightly hour news show out of our New Jersey areas. Of course, we were in the middle of franchising at the time. We attributed the cost to part of our story. We had a bigger base, we could afford to continue it. But it was very troublesome. The people who worked for us ... it was hard to justify their salaries or improving salaries because there was no way to measure it. The one serious union problem we had in my career was where the studio people in New Jersey wanted lots of changes--salary levels, equipment, everything--and they went on strike. I never had a union problem of much consequence before that. We had to explain to them this was not a profit center. We don't sell advertising, there's no way to ... we just have to keep this under control. Don't try to make this a lifetime job because there's just no future in it if that's what you're seeking. Use it as a method to prepare yourself to go to work for the programmers, for the networks, for the TV stations whose business is advertising. But for us it's a public service. It's very difficult to balance it just right. But that has always ... We have local origination even today in cases where we do it and it's costly. Other cases we provide the studio and the equipment and the commissions that regulate us very often will undertake the local origination.

It's very hard to determine if there's any serious viewership out there. There is a value to it in some respects. If you know your son has played basketball that night and the tape is going to play the next night, you're sure as heck going to have cable in your home.

So it's a mixed ... I can't give you a very clean response to that. I think you have to look at each situation on its own face and determine how much you can afford to do, how much you want to do, how much you can do and keep maintaining quality and not let it run away from you.

SMITH: In those situations that the franchisor or some local committee undertakes the programming, what has your experience been with those?

ROSENCRANS: Well, that is usually done on the basis that we provide the funding, and we know it's a fixed amount, and they use that funding and their people are involved and they go ahead and do it. Very few places do they try to do a nightly news show because that's almost competitive. You almost have to do as much of that as in a local TV station. They stay up with interesting things around the community. Again, it's a nice burden to get off your own shoulders as long as someone's doing it responsibly. It's a part of our business that I think has a role but I want to keep it in balance.

SMITH: How do you see these large operations like are proposed for Chicago, and I think it's in three or four other communities now, where they are going for twenty-four hour news service on cable?

ROSENCRANS: Well, that makes sense. I don't know how it works economically. I think they're going to have some tough years economically. But that's really a regional news service, in effect, to be funded by the cable companies. They will hope to recover some of that expense by selling local advertising. I think it's a great idea and it's got to be executed by some discrete organization that doesn't report to any one of the companies but stands on its own, with its own funding. And they'll operate like a network in their own region. They'll sell so-called national spots for the region and give the companies time to sell their local spots.

So those things have a future. They're all being tried today. Whether their economics work is another question.

SMITH: You remember the day when the FCC attempted to require local origination on all systems over what 2,500 or 3,500?

ROSENCRANS: 3,500, yes. And everybody tried to comply but it was ... particularly when you had a period of rate restraint where you had to go to the city council to get a rate increase and you said, "Well, look at all the local origination we're doing." And they say, "We don't care about that." But the FCC requires it. We've always been trapped between a lot of forces and requirements.

But there's definitely a place for local origination. You've got to use your imagination and ingenuity to keep the cost under control because it can run away from you.

SMITH: When the USA Network was still an operation of your group, did you undertake much production of original programs for the network?

ROSENCRANS: All the sporting events were original programming. We had to hire crews around the country wherever the games might originate. We didn't do any so-called studio shows. Most of the other material was taped. We were not a live network except to the extent of the sporting events. So, again, the economics of the business at that point didn't really permit that. You saw what happened to Westinghouse when they tried to go into the news business in competition with Ted. God, the cameras, the special effects, the studios, the space, the people--ate them up. Only Ted had the size and somehow he managed it but he lost a lot of money in the early days. He grew to a critical size and then that's what worked.

SMITH: I understand he was fairly close, I think, to throwing in the towel himself in that competition, when he managed to buy Westinghouse out.

ROSENCRANS: I would guess if you track every cable network starting with HBO, Showtime, CNN, USA, all of us, there was a moment in time when you wondered if we had a future. Business was building but every time it built you had to spend more money. You were not getting ahead of yourself. There were a lot of positions within the industry that said, "Gee, you guys produce the programming, we'll carry it. Then you start paying us when you get enough national advertising." I've had that argument with many, many people. I said, "That's not the way this business can grow. We need two sources of income. We need your fees and we need the national advertising." You may remember, ESPN had a little two year program and they were giving rebates back to cable companies. Everybody thought, boy isn't that great. You made money carrying ESPN. But soon Getty Oil realized what they were doing. They lost a few dollars but then they sold it at a pretty good margin to ABC. So it all worked out because the value increased. But as a discrete business, I think it was at ABC for some years before it began to be profitable.

But every one of those services went through soul-searching days. To start a new one today is obviously very difficult.

SMITH: And there are still a lot of them wanting to get started.

ROSENCRANS: Well, it's probably a $30, $40, $50 million dollar up-front investment to get through those three or four or five days. It's years before you cover your expenses. Just exhibiting at the conventions is a fairly expensive proposition.

SMITH: Compare the convention floors today to what they were back in the late '50s and early '60s.

ROSENCRANS: It's remarkable.

SMITH: It's dominated by the programmers now.

ROSENCRANS: Sure and a few equipment suppliers. But it's principally programming. That's what our business has become. I guess that all stemmed from 1975. The only way you could distribute anything was by satellite and satellite changed our world and will continue to change it.

Local origination, as we were talking about before, is hardly ... nobody's selling cameras of any consequence on the floor. It was interesting to me, I didn't see many HDTV presentations.

SMITH: Not this past convention.

ROSENCRANS: Very limited. Everything was on interactivity. Everything was on the concept of video-on-demand. All these things that the politicians and FCC commissioners are pointing towards--the future of communications. Here it is coming through our industry. How quickly it becomes viable is another question. But it's doable.

SMITH: When we get near the end of the interview, I want to ask you a few questions about where you see the new technology taking the industry. Probably in terms of cohesion, we'd do better to move along with the company's history.

ROSENCRANS: Now, where are we? Late '70s, still U.A.- Columbia. We have now franchised and built San Antonio. We haven't talked about that yet.

SMITH: No, we haven't. How did you get into San Antonio?

ROSENCRANS: It came out of a very idle conversation Ken and I were having one night after we had successfully franchised throughout New Jersey and then in Westchester County. We beat our competition pretty firmly in both places. We were building two very major properties, passing 250,000 homes in New Jersey and a potential 120,000 in Westchester. We had all the components to make those go. And we'd open up a system and we'd have 20 to 25 percent the first month because they all wanted the things we were offering. And if you look at the company, we had not been active in the franchising battles that occurred in the late '70s generally. We had stayed in our own backyards. We didn't go after Dallas or Cleveland ... all those things that were let kind of simultaneously.

Ken and I looked at our company and said, "Boy, aren't we getting a little top heavy in the east." We had all these more classical systems--Vero Beach, Yuma, Pasco-Kennewick-- and we've got some very modern stuff in the northeast. Wouldn't it be nice if we could find something else that was large that would kind of give us a better geographic balance going forward. So Ken said, "San Antonio, there's nothing happening out there. Maybe let's take a look at it." I said, "Great." So Ken goes down there, visits the city manager ... "Boy, this thing is wide open. A town we could build. Why don't we do something." So we said, "Okay, let's go after it."

At that time a lot of companies had been burned in other places and nobody was jumping all over the franchising anymore because they'd been through those wars. And we made a proposal. G.E. had once had the franchise and they had an infamous clause in there calling for a book buy-back at any time.

SMITH: At any time?

ROSENCRANS: Yes. And the combination of that defect plus the fact that the FCC put a lid on importation of signals into the top 100 markets, G.E. turned back the franchise somewhere in the '74 or '75 period. Now, armed with the development of satellite transmission and microwave, we felt we could tackle a city as big as San Antonio. We had capital resources. We were very under-leveraged all during this period. So we put a proposal together and they had some kind of hearings at which everybody puts something forth and they start to appoint a committee and conduct hearings. And we did all this.

I was just fearful that we'd get a flood of other people coming on top of us to compete with us. But we were ahead of everyone and they would take each proposal and go through the time frame and make a decision. The only one that really gave us any difficulty was Storer. They came in with both barrels. They got local citizens to take 20 percent of the franchise. We gave away nothing. And they were guys who owned the basketball team, the newspaper, they got all kinds of politicians--the "in" people in town.

SMITH: Well, that was standard practice then.

ROSENCRANS: We come there and we're a foreign company. We have a Texas slant and San Angelo and Ken. Storer forced themselves on to our schedule so we were paralleling each other. The city council was a big council--an eleven person council. There were three or four Hispanics, one Black and the rest Anglos. We just didn't know where we would fit on that scale. But we worked very hard at it. Storer's local guys probably did more harm than good. They overplayed their hand. Storer had some poor track records. They had grown so fast and had a lot of articles all over the place that were very obviously available to throw the questions at them. Our record was good. There's the place where I forced Storer to put up the $25,000 so they could carry C-SPAN. The day of the final hearing I said, "Oh, yes. We have C-SPAN." I figured they would call their contractor on the phone that morning so they would be able to have C-SPAN. But we laughed and the whole council laughed because they understood what had happened.

We won the vote seven to three or eight to three, something like that. Then Storer stood up and said, "We would like to propose that you issue two franchises," a dual franchise. And we said, "Well, it's totally uneconomically. We will not risk our company in that set of circumstances. If you decide on a dual franchise, we're withdrawing." We called their bluff and they stopped and Storer went away.

And we franchised the city of San Antonio with about 200,000 homes and all twenty-one suburban towns around it with one master franchise. No, excuse me. One franchise for San Antonio and a whole lot of fringe franchises--all the same though. So we had maybe 350,000 homes in a rapidly growing area. It had a big Mexican/American population and we had a lot of experience with that because we had Laredo, Texas, for years. Laredo was a very successful cable system and maybe 85 percent Hispanic. We began to build and we met all of our targets. Subscriber counts were ... I guess we turned the first phases on in '78 or '79 and the minute we opened up the telephones to an area ... we told them we could sell that area, we were getting 25, 30 or 35 percent over the phone.

SMITH: To what do you attribute that?

ROSENCRANS: Well, the cable had tremendous publicity. They only had two or three signals, maybe four, signals available over the air. It was a good market. Closer to a traditional kind of market. Maybe five signals but we were bringing in CNN, ESPN, USA, C-SPAN, HBO, Showtime ... Oh, and this was the first time we had ever gone beyond a single pay service. We had always kind of dwelled on one pay service. The Showtime people came to me and said, "Why don't you offer Showtime along with HBO?" Seven dollars for basic, seven dollars for HBO, seven dollars for Showtime, and seven dollars for GalaVision. GalaVision had started. So we had a lot of three pay buyers.

SMITH: GalaVision was the Hispanic network?

ROSENCRANS: Yes. So we started out with like 250 percent pay penetration, I think, in the early days. Everybody was buying more than one pay service. The thing grew very, very rapidly. We were just adding two or three or four thousand every week. It was just so fast once we got geared up. So the company really ended up with a pretty good balance weight over against the northeast. And between the two areas we really had some very current cable going. Right on the edge of the business. And as this all evolved, some of my men who had gone into business with me in '62 were interested in selling. We had sold the stock in 1968 and it came out at seven and a half. During the early '70s the time we merged with ... no before the merger with U.A. or even after ... with high interest rates, our stock was selling like two or three dollars a share. And the company bought in quite a bit at that time because we knew what we had. We knew it was a good business even if the market price didn't recover. But then subsequent to that with the eastern developments, San Antonio, the publicity got out and brokers started to follow us. We were up in the thirty, forty, fifty dollar range. Having come out at seven and a half that was quite a handsome profit for the original people. They were moving on. They had been involved for twenty years and they said, "Bob, maybe it's time to sell the company." I thought no, that's not what I wanted. But I couldn't deny them the chance to sell.

So the group that represented our original group pretty well unified that we ought to go out and find out what we might get. The U.A. people, on the other hand, were very much opposed to it, the U.A. Theater contingent. They didn't want to sell anything. They just didn't want to deal with it. So I was kind of trapped between two forces at the time. In the last analysis, I couldn't say to my people, "I'm not going to let you out." I just couldn't do it.

SMITH: This leads us to the Knight-Ridder-Dow deal, does it?

ROSENCRANS: Yes. Somehow we ended up at Morgan-Stanley and they put together the book. I don't even know if we had forecasts in those books. I'm not sure forecasting was appropriate for companies in those days. They put together a book and they estimated that we should be able to get $70 dollars a share--something like $1,000 a customer. I think about seven or eight hundred, eight fifty whatever. In the meantime the company keeps growing so all along we're getting stronger and stronger. We didn't have much debt. They went out and not much happened for quite awhile. They went to the IBMs of the world and Xerox. A lot of big companies and nobody ... it was funny. It was too big. It was dilative to most of those big companies. To buy a company like ours, have all that goodwill and not seeing earnings on the horizon--real earnings. So a lot of them shied away for that reason. They weren't sure about the cable business.

And nothing happened until all of a sudden, I thought the process was over and I get a call that Knight-Ridder and Newhouse want to talk to us. What they proposed was we split the company in half.

SMITH: Split your company in half?

ROSENCRANS: Yes. Knight-Ridder take one-half and Newhouse take the other. Management stays on and runs both halves. My reaction was, "Gee, how do you do that?" How do I run two companies ... private companies now, not public companies? I didn't like that at all. It was complicating.

SMITH: You'd build in conflict of interest all the way wouldn't you?

ROSENCRANS: I would think so. What do you do if something comes along? Who do you deal with? So we kind of shrugged our shoulders, didn't think it was practical. Then Knight-Ridder must have gotten hold of Dow Jones and they came in 50/50 owners of the new company. That made more sense ... a board of directors could proceed and go from there. I think they offered $75 a share. Our people were gung ho ... maybe we could squeeze it up to $78, $80 or something like that. Now the U.A. Theater people don't want this to happen.

SMITH: What was the percent of their holdings?

ROSENCRANS: Twenty-two percent. So after awhile they instituted a proxy fight. Said the price was too low. Management ... now they're accusing me of going to bed with ... this special deal with Knight-Ridder and Dow Jones. Those things get messy. We had Skadden & Arps as our attorneys. They had Marty Lippman's firm or is it Lipton--whatever that firm. It's a famous takeover firm in New York. Skadden & Arps is one and they're the other.

SMITH: I should know but I don't.

ROSENCRANS: Something Wactell ... Lipton Wactell. Let's go on, it will come back to me. So all of a sudden we're in court in Delaware. The whole process is going on and on. After a lot of very tense days and not knowing where we're going and board meetings on board meetings and a lot of ill will between the parties, Ted Rogers shows up with U.A. and they offer $90 a share. And that gets rid of Dow Jones and Knight-Ridder. There they are at $90 a share splitting the ownership, keeping the company and the management intact. So our guys were all smiles.

So I say, "Here I go. What do I do?" I really didn't want to leave the industry. So I said, "Well, I'll talk to my management and we'll do our best to carry on with the companies. It was not an unpleasant experience because I had a lot of stock left from the original days. We were all coming out very well. We had stock plans throughout the company and various people who were working for us--engineers, office people--were making anywhere from $25,000 to $150,000 on the sale of the stock they had earned over the years. So it was a pretty universal thing financially. People like Marvin Jones might have walked away with a couple million from all the stock he had. That part of it was very good. But now we're walking into new management and how are they going to behave. Of course, Ted Rogers, a person I hardly knew, was a different kind of guy--British empire builder. So that became quite an experience.

So, I guess it happened sometime in the late summer of '81 when we finally sold the company.

SMITH: And Knight-Ridder and Dow Jones backed out?

ROSENCRANS: They walked away.

SMITH: In effect, United Artist Cable Vision joining with Rogers kept their position and ...

ROSENCRANS: ... increased it.

SMITH: Oh, yes.

ROSENCRANS: They got the 49 percent, Rogers took 51 but they had a management agreement between them.

SMITH: Did that mean that all of you who were founders originally, you took your money but stayed on as management?

ROSENCRANS: Good management people stayed on. The name of the company was changed to Rogers-U.A. It was an entirely different environment because they didn't quite understand our decentralization. Rogers didn't, even U.A. didn't. They had never grown up in that environment.

SMITH: But they had been with you for ...

ROSENCRANS: Yes, but they never were ... They would have been happy to stay forever at 22 percent.

SMITH: They were on the ride.

ROSENCRANS: It was only when they saw they had been forced out that they got active. I can't fully blame them. But being an equal partner, from the 22 percent position of an equal partner, changed the whole psychology of the relationship.

After awhile, even though the company kept going like this, the two owners had disagreements. They couldn't agree. Ted Rogers wanted to sell his American operations to Rogers-U.A. It was Portland, Minneapolis, Huntington Beach. U.A. kept asking me, "What should we do?" I said, "Well, I think they're going to be a very expensive propositions." I couldn't even put a value on them. They were undeveloped major city franchises. You're going to need an awful lot of capital. You've got a bunch of strange things in here. You've got a bunch of book buy-back provisions. I've always been alert to book buy-back provisions. I guess we learned that in San Antonio for one thing but it always came up when we franchised through Westchester and so forth. Every city wants a book buy-back but if you give it to them you might as well not go into business. The argument as to what value to place on it. They had committed to put them in the company but the value had never been determined. And I pointed out the book buy-back weaknesses. U.A. just wasn't happy. They just couldn't get along and I'm kind of in the middle.

So they said one day, "We're going to break up this company and split the assets." The way you do it is make two lists of systems. U.A. agreed to make the lists with my direction and then the other side--Rogers--would pick one of the two halves. It forces you to be honest.

SMITH: The pressure was on.

ROSENCRANS: After some thought, we did two lists. One was the Westchester-Jersey combination along with Florida--Vero Beach and Ft. Pierce. Kind of the whole northern tier. So it was kind of the northern tier of the United States down the East Coast--about 275,000 subscribers. The other was San Antonio and the southwest, middle west, whatever we had in there--the same amount of subscribers. And Rogers selected San Antonio. He liked the idea of a big, massive franchise. He comes out of Toronto-Vancouver orientation. And he felt it would be easy to establish his connections with the city officials there as opposed to New Jersey and Westchester where you had fifty franchises in Jersey and twenty in Westchester. Also fearful that Chuck Dolan at renewal time would come in and try to overbuild you. I said that's not really a threat but nevertheless he was afraid of it. And he was very afraid of franchising and refranchising in this country being a Canadian, I guess.

SMITH: Why would he then have wanted to expand south of the border into the United States?

ROSENCRANS: Well, that was before. I guess he felt he was in great shape in Canada and just saw some great opportunities. But he built this thing and I think he may have been right when you saw the Texaco-Pennzoil case. And he was very much afraid of American politics. He felt he could handle big cities because there may be just five of them to deal with as opposed to umpteen numbers, you know. So he picked the southwest corridor in San Antonio--and I went with U.A., with the northern group. That was like '83.

SMITH: Ken Gunter didn't like that choice, did he?

ROSENCRANS: No. Ken came with me. He and Rogers and I had some terrible battles, disagreements. Ken and I were just anxious to get away from them. We thought maybe we could live with U.A. but even that didn't prove to be necessarily so. Probably a lot of the fault lies with me because once you run your own business it's not easy to be subordinate and be told, "You just take care of management, we'll take care of ownership." I could never get that through my head but that was the way they were talking. I kept pressing for various employee plans to give people in the field some stake in the company. I got no response and the more I pressed it the more they got annoyed.

And our relationship culminated with the GE transaction which was my transaction to buying the G.E. Cable Company partially for cash and partially for an interest in the subsidiary. That was a tremendous deal. We got Grand Rapids. We got some beautiful systems. We got 250,000 or 300,000 subscribers.

SMITH: How did that deal come about?

ROSENCRANS: I saw Bob Wright, who's now at NBC, was with Cox ... no he had been with Cox but came back to G.E. The Cox-G.E. deal never took place. Remember it was done and then Bob Wright went to Cox for awhile. And the deal unwound and he went back to G.E. with the systems. He was running the systems and the small appliance department. So I called him, we met at a convention and I said, "Wouldn't this be a great combination. I realize you guys don't want to step out and become a dominant player in cable and here's a chance to get into a good company, great properties." The combination of the properties were up to seven, eight hundred thousand subscribers. "You'll have a ??? going forward. You'll get some cash out now ... to be on the board. You know a whole bunch of things and I think it's a good combination." He agreed. And gradually we sold it to the G.E. and the U.A. people. But the U.A. people were not happy with the independence of management. They weren't happy with me at that point and even though the deal was completed, ten days later they asked me to leave.

SMITH: Well, I remember what I would call the shock waves that went through the industry. The temerity of anybody firing Bob ROSENCRANS:.

ROSENCRANS: Well, maybe they had good reason. I can't say that they didn't. Again, it was philosophical as much as anything. I wasn't prepared to do whatever they told me. I really wanted to do it the way we had always done. Maybe they saw that as a shortcoming, I don't know.

It turned out to be the best thing that ever happened for me, personally. It just opened up a whole new world. It was very lucky.

SMITH: Do you think that they had any lack of faith in the G.E. deal as having been a good deal for the company?

ROSENCRANS: Oh, no. They understood what a great deal it was. It was just that there were issues of health benefits, simple things that came up. Here's G.E. with their extremely generous health plan and here's Columbia here and U.A. Theaters over here ... three different plans. And I didn't think there was any way we could give G.E. people less here. We had to move our people up into those benefits. They got very upset with that because they saw me taking the G.E. position on that. And they said, "Gee, our theater people don't get anything like that. You're subverting the whole company." And I said, "Well, you've got a terrible problem if you weaken what they already have. You can't do that." So we argued about that. We argued about the issue of a stock plan. I thought our key people ought to have some incentive not just salary-- a bonus. A lot of stock options ... "You guys give them to yourselves all the time. We've got a plan out there. Why don't we take 200,000 shares and over time give them to our key people. Give them a chance to make some money in addition to their job." "Well, we don't do that for theater guys. It's just something we don't do."

So these were little issues that we couldn't see eye to eye on. The more I pressed, the more they resented it. I think they were just waiting for the G.E. deal. When they went to G.E. they said ... because they were responsible for the running of the company. They were the majority owner after the G.E. deal. Bob Wright had now left. He went to NBC or he went to the credit corporation-- from housewares to credit before NBC. The guy that picked up the negotiations, Paul Van Ordin, when U.A. told him they were going to let me go he said, "Well, it's your company. I can't stop you." So that was the end of that. Thank God I'm not working for G.E. I wouldn't want to be working for those guys. Once you've been in our business you have this feel, this smell, of being an individual, an entrepreneur. Not being overpowered by anybody. You don't want to lose that. That's the beauty of our industry.

SMITH: We have run out of tape.

End of Tape 2, Side B

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  BACK TO ORAL HISTORIES

Robert Rosencrans

Robert Rosencrans

Interview Date: Friday November 17, 2000
Interview Location: New York, NY
Interviewer: Jim Keller
Collection: Hauser Collection

KELLER: This is the oral history of Robert M. Rosencrans, godfather, if not the father of Madison Square Garden Network, BET, USA, sports, C-SPAN, many of the national programming, very early stages of the national programming in the cable television industry, entrepreneur A1, and overall great guy and one of the real founders of the industry. This oral history is a function and provided by a grant from the Gustave Hauser Foundation as part of the Oral History Program of The National Cable Center and Museum. The date is November 17, 2000. We're in the offices of Columbia Partners, Bob Rosencrans' present company. Bob, start off with telling us a little bit about your background before you got involved in the cable industry.

ROSENCRANS: Well, after a short stint in the Air Force, two of them, and after some college training at Columbia, I was in a very interesting business, which was the distribution of programming to theaters in large screen television to help the theaters offset the impact of home television.

KELLER: Was that through TelePrompTer?

ROSENCRANS: No, that was before TelePrompTer. That was a company called Box Office Television started by Sid Caesar and his attorneys and some other folks, and I joined them without much knowledge of television or closed-circuit television, and we were able to secure contracts with Notre Dame, carry their Saturday afternoon football games, and also the Harlem Globetrotters, and we would try to create programming that would give the theaters something to attract customers, and compete with what they were really concerned about, which was home television. We had some successful years. We also ended up doing a lot of industrial programs, bringing dealers together. For example, we did the introduction of the Edsel car. We had McNamara and Ernie Breach, who was then the president of Ford, and we televised the car and all the features of the car, and distributed it to about 30 theaters around the country where Ford dealers came to see this new product. The product didn't work very well, but the telecast was quite good. Then eventually we got into fights. The Robbins and Bascilio fights, that was a later time after I had joined TelePrompTer, but the concept of theater television shifted to hotel television where we didn't have large meetings there but we had meetings of perhaps 20 or 30 people in 30 or 40 hotels, all seeing the program as produced by the company, new products, new trademarks, new ideas, whatever the concept was. So we went from theaters to hotels, and then at that point... it was a difficult business because you never knew when your next show was coming, and we finally went over to TelePrompTer and became a division of TelePrompTer.

KELLER: Did Irving buy you, buy the company?

ROSENCRANS: No, he just hired us. There was not much to buy.

KELLER: So that's how you met Irving.

ROSENCRANS: Met Irving and worked for him for a while. We did a lot of industrial shows, and then as I mentioned we got involved in the Carmen Bascilio/Sugar Ray Robinson heavyweight championship fight, and I was handling the distribution of the fight contracting with theaters, auditoriums, promoters all around the country to carry the closed-circuit fight which was a ticket at a theater or an auditorium for let's say ten or fifteen dollars to see the fight. Home television couldn't afford to pay the big fighters very much at that time, but theater television was the answer at that particular time in history. During one of the fights, I got a phone call from a cable operator by the name of Bill Daniels, who was calling from, I think it was Casper, Wyoming, and he said I'd like to carry the fight on our cable system. So I said what's a cable system? He explained that to me, and I said, "Where is it?" He said, "Casper, Wyoming." So I said to Bill the telephone charges to get from Denver to Casper are going to overwhelm you, it'll just be too expensive to carry. He said don't worry about that, we have our own microwave from Denver to Casper. I said you have your own microwave? Why'd you do that? He said, well, we carry signals out of Denver into the Casper market. So I mentioned it to Irving and we said let's give it to him. It didn't amount to any money of any consequence, but Bill carried the fight, apparently successfully, and offered it as an extra bonus to his subscribers, and he said I'd like to come to New York to talk to you guys, which he did subsequently, and got into Irving's office and they were a great pair, two of the greatest entrepreneurs and promoters of all time. The upshot of that was that Irving Kahn's TelePrompTer bought several small systems, cable systems – Silver City, New Mexico; Farmington, New Mexico; Liberal, Kansas; and one other that doesn't come to mind – and all of a sudden, for the first time TelePrompTer had a business where there was money cash coming in every day and cash flow. Irving kind of kept it to himself, didn't share it much with me. The rest of the office kind of kept a little compartment. He had Hub Schlafly, who was well-known in the industry as his engineer, and Hub was always interested in pay cable and various futuristic things, but it was nothing that I had anything to do with. I was still running the large screen closed-circuit television.

KELLER: Was Rifkin running it, Monty Rifkin?

ROSENCRANS: Monty was the treasurer of the company, chief financial officer, and we were all quite friendly but it was kind of compartmentalized, and I was looking at this business which I knew was growing and offering continuing revenues as compared to my business which was a hit or miss situation getting a major company to agree to put on a 30 city show, which might cost them three or four hundred thousand dollars, and now videotape was coming into the picture and videotape kind of obviated the need for the closed-circuit end of it. You could just make a videotape and ship the videotape around and you avoided a lot of expense. So our business was not... the large screen closed-circuit television business was not progressing. So I was wondering what do I do next. Where do I go from here?

KELLER: You were still a very young man at this time, right?

ROSENCRANS: Yeah, I was probably in my early 30s. I was just married a few years, I think, at that time. Irving was using his company stock to buy cable systems, and the company stock had some bad days and it became ever more difficult for him to make transactions with offering a $30 stock which might now be down to two or three. There was one situation they were trying to buy in Pasco-Kennewick, Washington. It was owned by a pretty sophisticated man by the name of Newell Priest. He tried to make a deal with Newell and Newell said to them I only want cash, and TelePrompTer did not have cash at the time. Monty Rifkin handed me the file. Jack Gault, who also worked, handed me the file and said if you want to do something with it we're out of it, go ahead. I had a group of friends who were people that invested in companies. I met them on the golf course many years before, we became friendly, and I described what I knew about the cable business to them and they thought it sounded interesting. It had a cash flow component, had some growth potential.

KELLER: Who were these people?

ROSENCRANS: A family by the name of Strassler. They were in the business of buying companies that were failing with the banks. The banks came to them. They became prominent during the Depression when the banks were saddled with all kinds of bad loans, and they'd go to these people who would liquidate the assets if they could, build up the company, resell it, and pay the banks back. So they had a great reputation with the banks and they were fine high-quality people, and they were willing to back me if I could find a system.

KELLER: Did they know of your managerial ability or anything else about you at that time?

ROSENCRANS: No, they just knew that I looked all right.

KELLER: You were a good guy, a good golfer.

ROSENCRANS: A golfer. But we were family friends and they just liked the sound of the business.

KELLER: And they were very right.

ROSENCRANS: So I went out to see Newell, and he showed me the cable system, we talked for a while, he told me what his price was, and I came back and about two or three days later I called Newell, and I think we agreed to pay him $600,000 for, I think there were 3,000 subscribers.

KELLER: Still pretty steep for...

ROSENCRANS: How much is that a subscriber?

KELLER: $2,000 a subscriber, isn't it?

ROSENCRANS: No!

KELLER: 3,000 subscribers?

ROSENCRANS: That was 200 dollars a customer.

KELLER: You're right, you're right. I got the zero in the wrong place.

ROSENCRANS: So, we went through the contract stage and I left TelePrompTer, and all of the sudden we were in the cable business.

KELLER: You didn't put any of your own funds into it?

ROSENCRANS: Yes, I did. I had about 15% of the partnership, and most of it we had to sign our names at the bank. We borrowed the money, but we signed our names to the bank loan, so it was tantamount to putting our own money in. We closed; I think it was August of 1962. Does that sound right?

KELLER: Yes, that's about right.

ROSENCRANS: And the first thing we did was we... that couldn't have been August, I guess. In the spring, in May of the next year we had a Mother's Day special, a 99 cent installation special.

KELLER: Did you have a turkey special, too?

ROSENCRANS: I don't know. I don't think. We gained 300 or 400 customers over night and said, boy, this looks like... because there were a lot of people living there, but not many people on the cable system. The cable system at that time carried a couple of Yakama signals, and one or two Spokane signals, and that was about it. It was a 12-channel system, but pretty...

KELLER: Could they get anything off-the-air?

ROSENCRANS: Just a little bit out of Yakama, but not much.

KELLER: It was a classic system, then?

ROSENCRANS: Very classic, yeah, classic. Almost a few months after that we found out that the Pendleton, Oregon group was anxious to sell a system, and that was a true classic system. They were surrounded by hills and mountains, and you couldn't get anything if you didn't have a cable connection. We went down there and competed with Cox and a bunch of people, and we came away with that deal and all of the sudden we were an MSO, we were a multiple system operator in Oregon and Washington. They weren't far away and I used to fly out there every month, spend three or four days, review what was going on, and try to manage the system and make it grow, and build the cash flow.

KELLER: Is that how you got into your original idea of divided management?

ROSENCRANS: Well, it had to be because since I was living in New York I wasn't about to move, my family was young and growing. So we put in some very interesting budget controls, which you're right, it did create the basis for managing subsequently. We did everything on a budgetary basis, and every month we could see where everything was going, so if something was out of whack we had an immediate report on it, and we could make changes or change the budget, if it was necessary, but we depended on quality people locally and we found some that fulfilled the bill beautifully and others didn't. You depended on someone totally for their integrity because they were alone; you weren't in the city with them every day.

KELLER: Well, they wouldn't last long if they couldn't handle the job.

ROSENCRANS: No. We lost confidence in them and made a few changes, and some people, God, we stayed with forever, if they understood how good the system could work and how much they could know about what was going on through the budget. Everything flowed from the budget.

KELLER: Did your managers help build the budget?

ROSENCRANS: Yes.

KELLER: So they had the input into the budget.

ROSENCRANS: Yes, absolutely. It was their budget, it wasn't our budget.

KELLER: They committed to their budget and they had to make it.

ROSENCRANS: Yeah. And if they beat it, they did very, very well, and if they didn't maybe there were explanations for it, and we understood those.

KELLER: They didn't try to lowball you, though.

ROSENCRANS: No, no, they didn't because we knew what a customer should generate.

KELLER: How about capital expenditures? Did you do those?

ROSENCRANS: Well, capital expenditures, even to the very last day in the cable industry, we always underestimated.

KELLER: Always.

ROSENCRANS: Things were always popping up, so we kind of always had to eat crow at the end of the year and say, well, we went about 20% over our capital budget, but the industry was moving so rapidly that what you started with in the beginning of the year, it was a different business in the middle of the year and at the end of the year. But that's how we got into the cable business in '62, '63, '64.

KELLER: So with the Pasco-Kennewick and Pendleton complex, how many subscribers did you start with?

ROSENCRANS: We each started with about 3,000-3,500, I suppose. We grew perhaps 500 or 600 each year, maybe more. Today Pendleton is probably saturated at 6,000 or 7,000, and Pasco-Kennewick at probably 20,000. Then one of the most interesting transactions, which really gave us some scope, was in 1967. Bruce Merrill had a company, a manufacturing company called Ameco, and they also had a group of cable systems, and Ameco was competing with the likes of Jerrold and Scientific-Atlanta, and it was a tough industry. All the money generated by the cable systems was going into manufacturing. So the banks forced him to – JP Morgan bank, specifically – "Bruce, you've got to sell the cable systems." So the bank told us to go out there and take a look at it.

KELLER: Had you had an in with that bank, with JP Morgan?

ROSENCRANS: Yeah, we knew them. In fact, they were our banker. I flew out to Phoenix. It was the middle of the summer, 1967, the time of the Six Day War between Israel and Egypt and the Arab nations because I remember the pilot telling us about the progress of the war over the loudspeaker, and I got out there and it was about 110 degrees. It was unbelievable. I flew from Phoenix to Yuma, met a man by the name of Marvin Jones who was running the systems, chief engineer kind of person, and Marvin took me for a tour of the systems over the next couple of days. There was something exciting about the area; the towns looked like they were growing. They were new cities, new towns that sprang up during the Second World War. It was just because the Air Force needed a base, they created a Yuma, Arizona.

KELLER: Worst place to live they put them.

ROSENCRANS: It was a lovely town and an interesting area, and Bruce Merrill wanted 4 ½ million dollars for 10,000 subscribers. I came back after the trip, I liked it and I was enthused about it. We saw pretty good cash flow. They had microwave bringing in LA independents, so they had a lot to sell. I walked into my office where Sam Strassler, the father of my contemporary, he was there on a Friday and he said how was your trip? I said, "I thought it was great. I loved the systems; I think they're going to do very well. They've got all the components. They have lots of signal to offer the public."

KELLER: Did they have Ameco equipment in it, and was it working?

ROSENCRANS: Ameco? Yes. It was working except when it got very cold at night or hot during the day, constant tweaking. It didn't work well, but that's what we had. That's what was there. So Sam said to me, "If you like it, why don't you call Bruce Merrill on the phone and say you have a deal and let's go." I said, "Well, I have to go home, Sam. I've got to see my son in a Little League game at 5:30, but I'll call Bruce right now. Maybe you're right. I'll call him on the phone and tell him I'll call him when I get home." So I called Bruce, and I reached him, and I said, "Bruce, we'll meet your offering price, 4 ½ million for 10,000 subscribers," but I said, "Bruce, give me a couple of hours. I have to take a train home to see my son place baseball but I'll call you later this afternoon and we'll confirm the deal. I'll send you a telegram or whatever." He said, "Fine." So I got home, watched the game, and got home and called Bruce, and he said, "Boy, am I glad you called me when you did because Leon Papernow also called, he met my price."

KELLER: At H&B American, right?

ROSENCRANS: Yeah.

KELLER: H&B it was at that time.

ROSENCRANS: So a lot of guys were nipping at the deal but were always trying to cut the price a little bit, say, shave two or three hundred thousand dollars, but we didn't do that. We said if it's any good it's worth 4 ½ million. If it's not good it's not worth 4.2. So we proceeded to make that deal. So all of the sudden we had a California, Arizona, Oregon, Washington complex. It began to have some substance to it. It looked like it had some merit. And then I had a man by the name of Marvin Jones out there who was pretty competent, you know. He gave me a feeling of great confidence. He didn't say a great deal. He wasn't a verbose person. He answered yep and nope, but whatever he said was pretty much on the button. It felt that way, anyway. So we had the financing, the banks gave us very favorable financing because they wanted to get paid, and we financed some of the 4 ½ million with some long-term insurance debt, ten year straight debt with Home Life Insurance Company.

KELLER: Was that their first loan in cable?

ROSENCRANS: I think that was the first insurance loan, yeah. No equity, just a straight ten year loan. Those things don't exist anymore, but there were little windows there that opened up and we were able to jump through it.

KELLER: Especially when the insurance companies didn't know anything about the industry at that time, but you could show them a pretty good cash flow, though, couldn't you?

ROSENCRANS: Yeah, they saw how they could get repaid. We thought we had a $600,000 cash flow going in to that system so there was plenty of money available to pay the interest on the 4 ½ million.

KELLER: Did you get a moratorium on the interest at all?

ROSENCRANS: Not on the interest. The banks...

KELLER: Okay, on the principle?

ROSENCRANS: $500,000, I think, was our spread over ten years, evenly spread, and the other was a pretty conventional 6-7 year bank loan, but we put up capital too, we also put up some of our own. We didn't borrow the whole thing. We probably put in 2 million of the 4 ½, so there was plenty of coverage. That was late '67, so we had a nice little company. In '68 was the time companies were going public, and we felt we needed public money to begin to expand even further, so we went public in '68.

KELLER: You went public in the same year that... ATC went public that year, didn't they? And CPI?

ROSENCRANS: I don't remember the dates of those, but pretty close.

KELLER: Jack Crosby and Bobby Hughes.

ROSENCRANS: Bobby Hughes, yeah.

KELLER: I think those three companies went public in '68. The only other public companies in the business were TelePrompTer, and I think H&B. I think those were the only public companies at that time.

ROSENCRANS: Yeah. But we felt that we had something, we had a good story, and it might open up further expansion, particularly if we had some public money to deal with. Just as we went public, I guess late '68, I think I got a call from Jack Cole, attorney Jack Cole from Washington. One of his other clients was thinking of selling International Cablevision, and he mentioned that Ken Gunter spoke to him and he told Ken that Ken ought to meet me, and Ken said he didn't want to meet any goddamned New Yorkers and whatever.

KELLER: But you charmed him.

ROSENCRANS: I went down to Vero Beach to meet him. They had systems... they were the earliest public company of all, International Cablevision.

KELLER: I wasn't aware of that.

ROSENCRANS: They owned two properties. One was San Angelo, Texas, which was started by Ken Gunter's family, and the other was the Vero Beach-Fort Pierce system owned by a man by the name of Bonnie LaPorte, and Bonnie LaPorte and E.C. Gunter, Ken's father, got together and formed this company. They had two wonderful towns to deal with but they didn't have any capital, and the towns were... Vero Beach was about to throw them out because they needed a rebuild desperately. They were okay in...

KELLER: How old was that system? Well, it was buried, though, wasn't it?

ROSENCRANS: It was what?

KELLER: The cable was buried?

ROSENCRANS: Only under the river, the Indian River. It went through a conduit under the river.

KELLER: It couldn't have been that old, was it?

ROSENCRANS: I'm not even sure what equipment it was.

KELLER: Corrosion?

ROSENCRANS: There was a lot of salt air, a lot of corrosion, and again, temperature swings created all kinds of problems, but I met Ken and we met in Vero Beach. We had lunch and dinner and got along just beautifully. Ken is a very sophisticated guy in his own way, and even though he had a little suspicion, we hit it off, we just hit it off perfectly. He was very enthused about us coming into the picture, and I told Ken that if we make a deal we're depending on him to do what has to be done technically in Vero Beach and Fort Pierce, and also in San Angelo to make these systems really operate. We were competing with – all the people in the industry come up here – we were competing with Vicoa, the Baums.

KELLER: Arthur Baum.

ROSENCRANS: Arthur Baum, that's whenever the family was all together.

KELLER: Whenever they were all together.

ROSENCRANS: We had comparative meetings between the two buyers and the LaPortes and the Gunters, and at the end of the day I got a phone call in Miami where the discussions were held that they wanted to make a deal with us, and that was a stock deal. See, now we were a public company so all we did was exchange stock with them on some equitable basis. I don't remember the details of it right now, but...

KELLER: But they also then got an equity interest in your other systems?

ROSENCRANS: Yes, they became full equity holders, same basis we were on. We also had the 2-2 ½ million that we had raised from the public sale, which we could now put right into the cable systems in Vero Beach. Vero Beach was ready to throw them out, but Ken and I went to all these meetings, met with the city officials, and explained to them that we had the capital now to do this. Ken talked about the changes technically, I talked about the company, what we would plan to do, and we got the approvals and now all of the sudden we go to Texas and Florida, all good properties, all growing markets that had low penetration, relatively low penetration of cable subscribers, but plenty of room to grow. So it was a pretty exciting little venture. It was becoming substantial now, small in light of today's numbers, but at that time I think it was pretty good. We always had a balance sheet that was never overstretched. We had the wherewithal to do what we had to do to make the system develop properly, and then right after that it seems, like '69 or '70, again through the Chase Manhattan Bank – I'm not sure how they got involved – but United Artists owned a group of cable subscribers called UA Cablevision, and they were another set of nice sized towns: Laredo, Texas; Ft. Smith – great old traditional markets – also Brook Haven, Long Island, which was a little beyond the reach of the New York City signals. We worked out a merger with them. Our management was the thing... they were after our management because they had none. We integrated some of their people in the... some of the names escape me.

KELLER: How did they ever get into the business?

ROSENCRANS: What?

KELLER: How did they ever get into the business?

ROSENCRANS: How did they get in the business? Let me see... They had theaters in many of those towns.

KELLER: Oh, so the manager of the theater...

ROSENCRANS: The manager of the theater said look, there's a guy here with a little cable system, maybe it's a good hedge for our theater business to have this, and they, one by one, they picked off some pretty good cable operations, but they really had no depth of engineering. They had a theater mentality, which was a popcorn-peanuts kind of thing.

KELLER: Restaurant mentality.

ROSENCRANS: Yeah. So I had known, oddly enough, the head of the theater company, not the owner, but the operating head. He was one of the guys I dealt with when we sold the fights to theaters on large screen television. So he knew me and we had a fairly good rapport. So that deal progressed and all of the sudden we made a jump from a 70-odd thousand subscribers to 130,000, 150,000.

KELLER: About doubled, or more than doubled.

ROSENCRANS: So that was in what? The early '70s, just about 1970, '71. So those were all just extraordinary deals, the key ones being done for stock, so we weren't dissipating a lot of cash, we weren't putting ourselves under the gun, and we were a factor. It was a period when interest rates were moving sky-high. Companies like TCI were essentially bankrupt. TelePrompTer had gone through all kinds of trouble. Irving had his problems.

KELLER: And then there was that proxy fight for TelePrompTer.

ROSENCRANS: Yeah, Jack Kent Cooke was involved. I had nothing to do with him at that time. I had no connection with it. We were just simply minding our own activities and every year we had very nice growths, and fighting our way through rate increases by offering more signals.

KELLER: And starting to develop a reputation for excellence.

ROSENCRANS: Well, we did. We had Ken Gunter, who was a top engineer, the top conceptualist. Very few people are as able as Ken to integrate both the operational aspects of cable system and the engineering aspects. Some people who are experts on engineering couldn't begin to know how to operate a system. Ken knew both sides of it. Ken had a great education, and wherever he went he made an impact. So he was a very valuable guy. And then we had a wonderful array of people like Marvin, Jerry Cranford in San Angelo, Texas came out of a bank, a terrific guy, and we're all still very close and very friendly. And the Harmon brothers...

KELLER: Ed and Homer.

ROSENCRANS: Yeah, when we bought Yuma and El Centro, Marvin said you ought to speak to Homer Harmon. Homer came in and we hit it off. He's just the greatest guy in the world, and he knew exactly what to do with the systems, he had been there before, and another guy that gave you a tremendous sense of confidence. And he said, "Why don't you hire my brother, Ronnie?" because Marvin was going to Florida to rebuild the Florida system and Ronnie came with him. So we had Ronnie and Homer joining Marvin, Ken, myself, Jerry Cranford, and we had a great group of guys, and they were all totally trustworthy. They told you exactly what was going on. They put the budgets together and they told me when I was crazy, which they told me a few times, but we all had a lot of respect for each other. We all became very friendly as couples.

KELLER: Did they also get along with the board, with your associates?

ROSENCRANS: They loved them! We had great meetings because these guys would come to the meetings from time to time and they would be asked questions, and they were obviously competent. And UA Theaters loved it because our stock was moving up nicely, although at one point it went down, cut in half because there was a terrible time in the early '70s.

KELLER: In the early '70s and then the early '80s, too.

ROSENCRANS: Yeah. So we were buying in our own stock. We had a strong enough balance sheet to do that. But the cash flow was strong, we had the ability to borrow, and so in the early '70s we had probably the soundest company financially, not the biggest, by far, although I suppose ATC was pretty strong.

KELLER: In '71 they were just getting started, so they probably weren't more than 100,000 at that time.

ROSENCRANS: We had the foundation, and it was very rewarding. I started to mention the social connections, we bought a system in Aspen, Colorado, and I remember Marvin going there on his way to Florida from Yuma, he had no clothes to speak of, it was the middle of the winter, he had little moccasins on of some kind, and he's wading through the snow. He said don't buy this monster. We bought it anyway, but it became a place we all started to go together in late February, early January, like eight couples, and the Harmons and the Joneses and the Rosencrans's and the Gunters, although Ken had a lot of different wives during that period. We were never sure if he was coming and who he was coming with. And the Cranfords. It created a very connected company because we all knew we were together for the long haul.

KELLER: Frank Thompson ended up with that some years later, didn't he?

ROSENCRANS: Yeah. Let's see, what was the next key step? I think we got involved a little bit in the east. We had that Brookhaven system.

KELLER: Up in the New York area.

ROSENCRANS: Yeah, and in the early '70s I met someone who had some systems in northern New Jersey, and simultaneously with looking at that system, we were interested in pay cable in its very rudimentary forms which was... we connected with a company called Channel 100, which was run by a cousin of Marc Nathanson.

KELLER: That wasn't Jeff Reese, was it?

ROSENCRANS: Jeff Nathanson.

KELLER: No, I knew Nathanson, but...

ROSENCRANS: It wasn't Reese. He came later with Showtime.

KELLER: I thought he had something before that. Okay.

ROSENCRANS: We thought, you know, if you're going to go to a market like New Jersey, northern New Jersey where the signals, you got all the New York signals, you had to have something to sell. So we put Channel 100 in there and we put it in a number of places, but that was simply a 3/4-inch videotape play that had a schedule of maybe three shows a day, maybe two tapes a week, so you had a little variety, and we were going to charge 5-6 dollars a month.

KELLER: Over and above your basic fee?

ROSENCRANS: Yeah, it as a new service. And along with that we knew we could... we worked out a contract with Madison Square Garden to carry the Madison Square Garden's sports event live.

KELLER: That was a big, big turning point for your company.

ROSENCRANS: Yeah, those games were very important at that time. Chuck Dolan made use of them in Nassau.

KELLER: How did you ever get into a kind of a deal with Madison Square Garden?

ROSENCRANS: Well, it wasn't that difficult because they were already distributing it to the Manhattan Cable systems, and it was a matter of us adding subscribers to their network by taking it via telephone or microwave, however we were able to do it, into our headends in New Jersey and in Brookhaven, and we also said to them, "We'll work on expanding the microwave north and south, north of the Hudson River to other systems, and this will create a bigger market for yourself." So Madison Square Garden saw it as a way of building a bigger network.

KELLER: And indeed they did.

ROSENCRANS: And it was purely within their territories. There were no league issues involved. I remember, I was so excited about putting on the Knicks and Rangers because I was a great fan myself.

KELLER: You were always involved with sports, weren't you?

ROSENCRANS: Yeah, and I knew how the people that were excited about it would really be excited, and it was a piece of extra programming that we were including in the basic service, but all of a sudden someone who was happy with their off-air antenna signal had a reason to buy cable, and it worked immediately. We had subscribers come on out of left field, and all of a sudden we said why don't we franchise the rest of these markets. We had about six communities in Passaic County, which is really in the shadow of the transmitters.

KELLER: Was Gilbert working out in that area?

ROSENCRANS: No, Peter was in...

KELLER: He was farther out?

ROSENCRANS: Long Island. He was in eastern Nassau County? And I don't think he had the Garden. He had the Garden a little bit later. In fact, no, he was in Suffolk County. He was even east of where Chuck was. Chuck was in tough territory, too. He was in the same kind of territory we were in. So between the Channel 100, the pay cable service, and this, we thought maybe we have the ingredients to build a market.

KELLER: But you got involved in the system before you had anything to sell, and then you developed the product to sell, is that correct?

ROSENCRANS: Pompton Lakes, oddly, is sort of behind some hills, little impediments to signal reception in places in Ringwood and Wanaque, places that were not... some of the area where you could sell cable. We thought maybe just the pay service might be the key, but the Garden...

KELLER: You didn't built out into the heavily saturated areas, signal saturated areas until you decided to sell...

ROSENCRANS: Yeah, once we had the Garden we knew we had a winner, and then at that point we switched from Channel 100, which was the tape play origination, to HBO, who had started in New York City and were playing off a 2-inch tape machine, distributing it by microwave and cable, and their quality was far superior to ours because we were on a ¾-inch feed. We worked out an arrangement with Jerry Levin, which was a fairly standard one, and we switched to HBO with their name and promotion. They were struggling because each addition had to be interconnected, which was painful.

KELLER: They almost went down about that time.

ROSENCRANS: Very, very close. I didn't realize how bad they were until early 1975 when they were about to fold their tent, betting only on the success of the satellite.

KELLER: What a great bet that was!

ROSENCRANS: By experimenting as we were doing in New Jersey, we understood how valuable HBO could be but you had to get it there, and we were kind of stymied, but it was fine for us at that moment and we had the video tape player in San Angelo and Vero Beach and all these other places. And we were getting a few customers, but it wasn't outstanding and the picture quality was suspect. So in 1975 when Jerry Levin asked me to meet him in his office, he wanted to talk to me about a concept they had, and he and Dick Munro mentioned the satellite opportunity, and if they could find a cable company that would put in a 10-meter dish to receive their signal somewhere...

KELLER: At 100,000 grand plus.

ROSENCRANS: They would contract to put it on satellite. It was a big bet for Time, Inc., but it was the last chance, really. They had a serious commitment.

KELLER: I don't remember, had Time, Inc. bought into HBO by that time?

ROSENCRANS: They owned it.

KELLER: They owned it by that time?

ROSENCRANS: They owned it, yeah.

KELLER: Okay. I don't remember when that deal occurred.

ROSENCRANS: They had sold their broadcast stations and went into cable.

KELLER: They sold their cable systems, too. They sold their cable systems to us in San Diego, to ATC. That's the first time they were in it.

ROSENCRANS: Yeah, but they owned ATC.

KELLER: Well, that was afterwards.

ROSENCRANS: This was during that period they had ATC because that's how Monty got involved putting HBO on in Jackson.

KELLER: Time didn't buy ATC until '77.

ROSENCRANS: Oh, really?

KELLER: We had bought the systems in San Diego from Time, Inc. They wanted to get out of the cable business at that time. That's why I was wondering about when they had made the investment in HBO. But there was an affiliation between ATC and Time, Inc. They hadn't bought ATC yet.

ROSENCRANS: Okay, yeah, that's right. Okay.

KELLER: That's just timing, that's all.

ROSENCRANS: They said we want to do this but we have to have somebody agree to spend $100,000. I said, "How much is an earth station?" First, it had to be a 10-meter dish, 30-feet - a big earth station. It was $100,000. But having experimented with...

KELLER: You didn't blink though.

ROSENCRANS: It made a lot of sense because it was a one-time charge. Now if you create your own origination the cost goes on and on and on. Here it's a passive piece of equipment. So it sounded interesting to me and I said, "Well, let me get back to you on Monday," and I called Ken over the weekend and we spoke at length because I had just watched the British Amateur, which came to this country via satellite, and the picture was great and I said, "Gee, that's marvelous." I said, "Ken, is there any reason why this won't work?" He said, "It has to work. It's just a dish. It's no different than terrestrial microwave except it takes one hop up to the satellite and back down to the dish." And we discussed, why don't we put them in all our systems? So Monday when I got to the office, I called Jerry and told him we'll put them in all our big systems. We had the capital, but again, it was only because we were very comfortable financially that we were able to take that kind of risk.

KELLER: So you, by giving HBO the satellite distribution system, really made HBO.

ROSENCRANS: Well, it's what they needed. It created a story for them that they could go to Time, Inc. and say, "Look it, we've got now all of the sudden, overnight, when we put this on we've got six or seven systems with a couple of hundred thousand subscribers. We've got the ATC people to come along, and we expect the other companies will come along. Even though it's a big investment, $100,000 seemed like a lot of money, but it gave everybody something to get excited about, and then when they were able to book the fight, Thrilla from Manila on September 30, that added a little glamour and spice.

KELLER: Go into that story about Sid Topol's involvement in that, and how you finally got the dish down there. That's an interesting story.

ROSENCRANS: I don't know, but I think I spoke to Sid that Friday afternoon and he confirmed to me...

KELLER: Sid Topol was president of Scientific-Atlanta at that time.

ROSENCRANS: Scientific-Atlanta, and Sid is a great salesman, but he knew what he was talking about, and we were shooting for September 30, and I said, "Sid, if we buy a unit, a 10-meter dish, can you get it up and running by September 30th?" He said, "Absolutely." In the meantime, we had a lot of things to do at the FCC. We needed approval from the FCC, and for some unknown reason the people most effected adversely by the cable industry going into satellite, meaning the broadcasters and all of the people affiliated with the broadcasters, they didn't realize what was going on, or they felt they didn't need to object because it wouldn't accomplish anything anyway, but for some reason or other we passed that 30 day stage when anybody can object and stall it.

KELLER: The waiting period.

ROSENCRANS: And by God, the 30 days came and went. Either Wiley told everybody, don't object, you're going to be marked lousy at the Commission if you do, and we got through it. At the same time, I think Jerry or Dick, I'm sure it was Jerry, contacted the fight promoters and said we want to put this on via satellite in Vero Beach and Jackson, Mississippi, and they said fine, just pay us the normal fee the cable systems were paying. We were all then involved in the fights because they weren't interfering with the theaters because they were not in the same markets by and large.

KELLER: Bob, earlier than that time, I think as you will recall, Irving was selling the fights to cable systems around the country to be delivered by microwave and sometimes the microwave connection was so expensive you couldn't afford it.

ROSENCRANS: But they were not... as markets, the theater operator couldn't complain about it because the cable operators were 100 miles away, it didn't effect the market, and it was experimental, it wasn't a lot of money. So anyway, they got the promoters of the fight – I'm trying to remember who they were – to sell the fight signal to HBO, fed it to us, and fed it to Jackson, and we had that window from April to September to do a lot of things. We had to get the property necessary to build this earth station because we didn't have big enough headends. We had a headend between Vero Beach and Fort Pierce, but not enough land to build an earth station and the related headend equipment and so forth. So the first step was to find the land. We finally bought it from a farmer who was adjacent. I don't know how we got it, but we got that. A guy that we went to first who had good property near us, he was in the cable business, too – Wilmington, Delaware. He was in the pest business.

KELLER: He must have been Marty Malarkey's partner out there!

ROSENCRANS: I don't know. He was trying to hold us up for that adjacent... So we found a farmer who was more amenable, and we got the land, and we ordered the foundation for the dish, got it poured. Sid Topol delivered the material, and I think the afternoon of September 29th, the fight's the next night on the 30th, we had the dish up. It was huge! I mean, a 30-foot dish is a pretty big dish. We finally pointed it, found the satellite, and there was a picture on the monitor. It was extraordinary. And then we started sweeping out the headend. We knew we had something. Now we had to feed it over a...

KELLER: Did Scientific-Atlanta manufacture the receiving equipment, too? Not only the dish, but the receiving equipment?

ROSENCRANS: I don't know whose components they were. Sid would know, I don't know. But they delivered the whole package to us on-time because we had a lot riding on the next night. I remember we all sat at a movie the next night, the opening night, called The Gambler with James Caan. So that was a great combination, the two events.

KELLER: What did you charge for the fight, do you remember?

ROSENCRANS: Well, no, I think we just charged... it was on HBO. I think we gave it to everybody that night. It was like an open preview, the whole town had it, and I think we were getting $7 a month, $7.50 a month, something like that. But all of sudden, the next week or month, or months, we got an enormous reaction to the movies because the pictures were better via satellite than we were producing over our local facilities, microwave to terrestrial microwave. One of the commissioners who was a great enemy of ours, he just tried to fight us all the way, accused us of degrading the original signals to make HBO look better.

KELLER: It happened to a lot of us.

ROSENCRANS: Anyway, we overcame all those obstacles, and we knew we had something then.

KELLER: And then you started building.

ROSENCRANS: And we put them in Laredo, and San Angelo, and Pasco-Kennewick, and Fort Smith, and the bigger markets. I think we put seven of them in over the next several months. I'd got to all the openings and have a cocktail party, meet the city officials, and I remember in Laredo, I was there that night and the local priest came to bless the earth station, and that night we had a film called Mandingo. I said how do I get out of town? I didn't realize how bad that film was, and how offensive that was to a lot of people. That was the one problem that I think we had, and maybe it still exists, but maybe it's lost its intensity...

KELLER: Well, it's not any worse than commercial television now.

ROSENCRANS: Yeah, but in those days some of those things, some of those movie scenes were beyond the pale and we weren't happy with it, but on the other hand, I guess we justified it by saying they have to pay extra for it, they can screen it from their kids if they choose to. Who are we to be in a position to block it? There were some purists in those towns who were very upset about it. We leaned on the free speech aspect of it. So that's how that all became a reality, and it was exciting because we knew all of the sudden our other markets began to look more interesting. We weren't aggressive going after the big cities, the Denvers, but we knew our own markets would benefit, but we also felt we could begin to get very aggressive in New Jersey and West Chester and so on.

KELLER: That's the only place that you ever did any franchising, right?

ROSENCRANS: Well, also San Antonio, Texas.

KELLER: Well, that's another story.

ROSENCRANS: Yeah. So we went head to head with Chuck in Westchester County. We swept the boards there because we had a much better financial picture. We were a corporation, he was a partnership with very little liquid assets, few liquid assets, and San Antonio, which was probably '77-'78, we really felt like we were overbalanced in the east now. We had so much construction going on in northern New Jersey because we franchised about 55 communities that were adjacent to each other, and each one was a franchise hearing. Kay Koplovitz and Bill Koplovitz joined us at that time to do franchising.

KELLER: You brought another great person into the industry.

ROSENCRANS: Again, somebody out of the blue we didn't know much about, but she came with Bill to visit me one day and said they'd like to work on the company. I said how about franchising? They were great at it. They were really good. They're smart and they could speak, and they were loyal, and they were tough, you know. It was a great combination. So, again, we keep building this group with some wonderful people. Then San Antonio was the one big market we went after because... I'm not clear how we... I think it came to Ken's attention. It had been a franchise that was owned by...

KELLER: Ken was your number two guy in the company at that time?

ROSENCRANS: Yes, Ken was executive vice-president, but Ken focused more on the engineering and long-range conceptual side of the company rather than the day-to-day stuff. Marvin was head of the operations aspect of it. We had no public relations staff, we had no marketing staff, we thought that was all more a local function, give them the tools to do it locally and the authority to do it locally, and we just didn't bloat up the home office. We never had more than half a dozen people in the head office in New York. We had Scott Ledbetter, who joined us in the late '70s, came from the Chase Manhattan Bank, a young person, a very young guy who brought a lot of quality to the company. But we had a four or five man office, and everything else was out in the field.

KELLER: That's how it should be. I totally agree. We want to change tapes here in just a minute, but I want to get back into the San Antonio franchising effort when we start the new tape.

ROSENCRANS: Okay.

KELLER: Bobby, we were talking about your franchising effort in San Antonio, Texas. You wanted to get more involved in the Texas area now, and Ken Gunter had brought that to you, is that correct?

ROSENCRANS: Yeah, Ken said that he'd heard... there had been a company who had had the franchise and who dropped it. I'm trying to think of the name...

KELLER: Was it GE?

ROSENCRANS: GE, right, GE decided not to build it. This was all pre-satellite. There was nothing they felt they could offer to create a subscriber base.

KELLER: As I recall, GE never knew whether they wanted in the business or out of the business. They were in the manufacturing business for awhile, then they were out, and then they were...

ROSENCRANS: Yeah, they were not sure. Anyway, they turned the franchise back to the town. So there were some people saying why don't we re-franchise, and Ken went in there and met some of the key people and, well, make a proposal. So we put together a proposal, and we were pretty much the only one at that moment, and we thought we had an open road. We had our hearing, our first hearing, I think – Ken will remember this better than I would – and all of the sudden, Storer Broadcasting shows up. Michaels, who was the head of the company, was born or lived in San Antonio, and he said, by God, we should go after that, and they had a pretty successful airline?

KELLER: Yeah, Eastern Airlines, didn't they?

ROSENCRANS: Yeah, broadcast, they were a big company.

KELLER: Oh, yeah, they were in broadcasting big.

ROSENCRANS: So they come to town and enter in partnership with a guy by the name of Red McCombs.

KELLER: Oh, yeah, sports...

ROSENCRANS: The guy who owns, what was it? The Denver Broncos?

KELLER: No, he doesn't own the Broncos. He's up in Minnesota now, isn't he?

ROSENCRANS: Minnesota, right, Minnesota.

KELLER: The Vikings.

ROSENCRANS: And he had a basketball...

KELLER: He had the basketball franchise in Denver.

ROSENCRANS: He had the Spurs. And I knew that for us to have some success we needed a local sports component just like we were doing with Madison Square Garden. So I went to the Spurs, spoke to the people involved, and we got along pretty well, but they really said, "What do we need these guys for? We can own a piece of the system with Storer. Let's not deal with Columbia."

KELLER: And McCombs was the owner of the Spurs then?

ROSENCRANS: Yeah, so there we were with McCombs, and other local guys, and Storer competing with us, Columbia, from Connecticut, San Angelo, etc., etc. It was a very interesting mix of council people. There were several Anglos – it was about an eleven or twelve man council, thirteen council – four or five Anglos, about two Black members, I think, or one Black member, and a lot of Hispanics, among them Cisneros, Henry Cisneros.

KELLER: He became mayor of San Antonio.

ROSENCRANS: Mayor, and then Secretary of Commerce, or Housing.

KELLER: Housing, I think.

ROSENCRANS: Yeah. Wonderful guy. And we went down there and refined our proposal, and we went head-to-head with Storer. We'll get into it later with C-SPAN, but I remember one of the things we talked about was C-SPAN, and Storer knew nothing about C-SPAN and we were saying, at least in our proposal, we'll bring you C-SPAN which is the House of Representatives, etc., etc., and the next day Storer showed up at the next meeting – "We too have C-SPAN." I got them to sign up their whole company. (LAUGHTER) But when it came down to the votes, I think we won, like, seven to four. One of the councilmen was running around in a new car, everybody knew he was broke, and he was running around in a new car supplied by Red McCombs' used car agency. We won the vote, like, seven to four, and one of the councilmen said one of the nicest things I've ever heard, he voted for us, one of the Anglo councilmen, he said, "I'm voting for Columbia because I think they're people of better character." So when we heard that, that was a great thing, that was good, and we won the franchise.

KELLER: McCombs can be a little flaky and a little acerbic at times.

ROSENCRANS: Oh, yeah, and I said, about the Spurs, we can have the Spurs because if we don't give it to them, they know that they're going to sell it to us. Their stadium is sold out. They have no choice but to sell it to us, so don't worry about that. We guarantee you we'll have the Spurs.

KELLER: And you were able to build it then. How many television stations did they have in San Antonio at the time?

ROSENCRANS: I think they had two or three, maybe four. They had three plus an educational.

KELLER: It wasn't as shut out as Austin was.

ROSENCRANS: Yeah, and we could bring in a few extra... I've forgotten what the FCC limitations were, but...

KELLER: You had to pay for them as you brought them in.

ROSENCRANS: Yeah, but now we had Madison Square Garden Sports, although we couldn't carry the Knicks and Rangers at that time. But I think Ted Turner was... we had TBS, we had CNN, a number of channels that were available on satellite, so we had all those things to sell.

KELLER: I want to get into the negotiations you had with the various leagues, with the hockey league, with baseball, at another time. I think we could go on along the line. Let's talk about C-SPAN now. It was told to me by Brian [Lamb] that you were probably the most important factor in the development of C-SPAN.

ROSENCRANS: Well, next to Brian Lamb. Way down.

KELLER: He said without you – and he added John Saeman and Ed Allen – but he said without Bob Rosencrans this thing would never have gotten off the ground.

ROSENCRANS: Well, how that all evolved... I knew Brian. He was a reporter. He'd done a story on us, and I loved the way he interviewed me because he just set the framework for just coming through with a very logical, complete story. Brian had an idea, he was interested in politics, can we get the representatives' material back to their constituencies, and the only available thing at that point – this was pre-satellite – was by videotape. Satellite was in place, but there was no money around to buy a transponder and do all of those things, and that didn't really make a lot of sense. It was not very exciting. Then at one moment, Brian called me or told me that the House was going on television. Tip O'Neill had decided it was time to put the House on television. They would control the cameras, they would feed the signal to whoever wanted it. We now had Madison Square Garden Sports Network, which we started in '77. That was the first proprietary basic cable satellite service, the concept being that we could sell advertising and we could charge the cable companies a per subscriber fee. So that became the structure for all of the subsequent basic cable services, and we started solely with Madison Square Garden Sports, which was a 7-10 o'clock eastern standard time event, maybe five nights a week, and I think we charged initially by the game, a quarter of a cent per subscriber, something like that. And Kay Koplovitz, who had left us for a short time to work with HBO, had come back, I think, and then of all the people in the company who might be able to develop this, Kay seemed to be the right person. So the two of us together, we went to the Chicago convention and talked about our network and started to sign up a few subscribers. Guys would say what do I want hockey in Texas for? Nobody wants to watch hockey. But we had something to sell, and we bought it totally, our own company bought it, and a few others came along. We had a channel but with only a couple hours, three hours, at night, and we also put some children's programming in.

KELLER: You were paying for a full time transponder, though?

ROSENCRANS: Yes, it was a pre-emptible transponder, which made us nervous but we had no choice. So when Brian said they had the House, I said, "Well, we have the whole afternoon open. Why don't you put C-SPAN on our network during the afternoon? We'll charge you a nominal amount," I think it was $200,000 a year, "and you've got it." So all of the sudden we had the beginnings of...

KELLER: Had he already made his deal with the House?

ROSENCRANS: He didn't have to make a deal. Anybody had the right. The broadcast station could have taken it. Anybody can take it, as long as you don't touch it, as long as you don't add commentary, as long as you treat it solely as what you receive. So we said let's put it on our sports network as another component of the programming. So we began to have some hours. All of the sudden now how do you fill the rest up? And later, after that, Bob Johnson came to me, he was with NCTA, and said could he get a couple hours on Friday night to put on some programming for the Black population. So, great! It was not the all-news network, the all-sports network. It evolved in a different way.

KELLER: Now you were a magazine.

ROSENCRANS: Yeah, more of a magazine, that's right. So now that we knew we had a time slot, we had something we could show the House, now it made sense to Brian and to me, let's go out and get some capital raised. Who gave us this idea? Oh, Bill Donnelly was a young man with Young & Rubicam, who was very bright, and he said to me many times, there are several components you need to be successful in programming to generate advertising – you need news, you need sports, you need politics, you need children's programming, the whole array of things, and that was our framework at how we would develop the network. But all of the sudden with this time slot, it seemed if we could sell this to the cable companies that it would be a way that they could show we're doing public service.

KELLER: That's C-SPAN?

ROSENCRANS: Yeah. And public relations were terrible, congressional relations were terrible, and...

KELLER: But Brian will not admit to the fact his reasoning was to be a public relations overture for the industry. To this day he doesn't admit it.

ROSENCRANS: No, I don't think... It was good programming to show.

KELLER: But we needed it.

ROSENCRANS: But the industry needed it. So we didn't sell it on that basis, but we got Bud Hostetter, let's see, Russell Karp from TelePrompTer, Gus Hauser, they all kind of picked it up very quickly and we had a meeting, and I think a few weeks after that we had ten or twelve.

KELLER: The first issue was twelve at $25,000, was that it?

ROSENCRANS: Yeah, that was purely for capital, really, and maybe some operating, but that was to put the earth station in. We needed a transmitting earth station in Arlington, Virginia.

KELLER: That's where John Evans helped out an awful lot there.

ROSENCRANS: Yeah, and John was a great supporter.

KELLER: Yes, he was.

ROSENCRANS: It was not just the House of Representatives. We had a young person's component, which was the, it's still on, I've forgotten the name of the series, but it's high school kids that come to Washington. And Brian was going to put on the National Press Club luncheons, and the germs of all the later ideas were beginning to evolve. If you view cable as a need to provide this whole array of services, so when you walked in the door and tried to sell a subscription, if the kids liked sports and the mother liked fashion and the father liked whatever, you always had something to sell. So that was the concept that Bill Donnelly kind of drew a picture for us and we understood that. So C-SPAN filled that big gap for us. So I think that's why we were able to sell it because it was a unique piece of programming.

KELLER: But you really went out and pushed a lot of the operators into providing that initial $25,000, didn't you? Put a lot of pressure on them?

ROSENCRANS: We didn't have the ability to put that much pressure on them, but I said, boy, this is a great concept.

KELLER: But you spent time in going out and contacting these people.

ROSENCRANS: Sure, but Brian was the key. But our making the first pledge, Ken and I stood up and said we're in, it opened the flood gates a little bit.

KELLER: There were some that help out for a long time.

ROSENCRANS: Yeah, they did. Well, some people didn't understand the programming aspect of the industry, that if you're going to build these markets you had to have something for everybody to have a reason to buy cable.

KELLER: I remember when we almost gave away that right to program. Remember Fred Ford?

ROSENCRANS: Yeah!

KELLER: I'll never forget that speech as long as I live, down in Miami. He said I can't make a deal right now to get all the distant signals we want if we promise not to do any programming. Remember that?

ROSENCRANS: Yeah.

KELLER: Every time I think back on that, I just shiver.

ROSENCRANS: Then of course C-SPAN came after, I guess, CNN. So everything fit, everything kind of fit, and nobody dreamed – I don't even think Brian dreamed of what C-SPAN would evolve into.

KELLER: No, he admits he didn't.

ROSENCRANS: No, nobody did. None of us understood where we were going. We just took a little step at a time. But C-SPAN, I think, is our proudest moment because I think we've had a positive impact on the country.

KELLER: I don't there's any doubt about it. I think it's a great tribute to you and the other people who put up that initial cash to get it done.

ROSENCRANS: It's also, I think, it's also a component of the industry that we are not broadcasters. We didn't need the big audience to justify doing something.

KELLER: Selective audiences.

ROSENCRANS: Because we're a business of subscriptions, so like a magazine, as you said before, there are a couple of pages of things that maybe three people are going to read, but that's how you sell a magazine.

KELLER: But then this evolved even further, didn't it, from your Madison Square Garden network, and then it got into USA?

ROSENCRANS: Well, it was Kay's idea that Madison Square Garden was too limited as a concept and she wanted to develop lots of other programming, but during that intervening period we were able to write a contract with the National Basketball Association.

KELLER: That's a story in itself, and I'd like to hear that.

ROSENCRANS: Joe Cohen – I don't know if you know... Do you know Joe?

KELLER: No.

ROSENCRANS: Joe was with Madison Square Garden, and he and I got quite friendly dealing on the local level. Joe knew the head of the NBA, had gone to school with him, a fellow by the name of David Stern, who still runs the NBA. We knew that they weren't happy with the Knicks being all over the country. They wanted to stop it, and the only way they could stop it was to really write a league contract with us. So Joe and I put a proposal together to carry, I think it was a Thursday night game-of-the-week kind of thing, go all over the league, different games, and put it on Madison Square Gardens Sports Network.

KELLER: And you would hire local crews?

ROSENCRANS: Well, their games were already being telecast, so we took a feed and put in our own announcers. So it wasn't that expensive, and we did the same thing, about the same period of time with the hockey leagues. So between the Monday night hockey game and our Tuesday night whatever and a Thursday night basketball game, now how do we get baseball? I met Al Rosen, went to see Al Rosen, who was a former Cleveland Indian third baseman, great player, who's not the general manager of the Yankees. Good guy, great guy. We said, "How about putting the Yankees on?" because I couldn't get anywhere with Bouey Kune and the league at that moment. So, gee, why not? We'll give you our Wednesday, whatever game, a different game-of-the-week kind of thing. It was Friday night baseball.

KELLER: But only from Yankee Stadium, or even when they were traveling?

ROSENCRANS: I think it was all the Yankee Stadium games. They were there only ones they could really control. So we wrote a quick contract, and we started out with a game in April where the Yankees played Boston. It was a terrific game, a 14 inning game. Ron Guidry pitched for the Yankees, and I think the Yankees won 5-4 or 3-2, something in the 14th inning. We gave it away, our affiliates were carrying it, and the next morning I get a frantic call from major league baseball – "You can't carry the Yankees all around the country!" So I said, "Well, okay, but we tried to make a deal with you and you weren't prepared." So they said, "Oh, well, come on in, let's talk, let's talk about a league deal." So I went in and talked about a league deal, and they said, "You've got to stop carrying the Yankees and let's write a league deal right now," which we did. I called Al Rosen, told him what happened. We had a clause that if the league objected, threatened suit to prevent us from carrying it, we would stop. So he understood, and I was on my way the next day, I think to San Antonio, and I arrive in San Antonio and there's a phone call from George Steinbrenner. He didn't know me, didn't know me at all. "What are you doing canceling this contract? You have no right." I said, "Well, we do have a right if the league is giving us a formal objection." "Well, you better put those games on or I'm going to sue your ass off," or something to that affect, typical. We had a very unpleasant conversation and that was the end of it. In the meantime, then we had three leagues going, and we weren't paying a great deal. I think the NBA was a $400,000, $500,000, $600,000 contract, or $300,000, $400,000... something like that. And Kay was instrumental in being part of this whole group. Joe Cohen was... You see, Madison Square Garden was 50% partners with us. Kay was now expanding at USA into women's fashion and other things.

KELLER: Now Madison Square Garden became USA?

ROSENCRANS: I think she said it's got to have a more generic kind of name, a more universal name. So she developed the USA logo and the brand. But we weren't making any money with this whole thing, just breaking even. We never put any money into the network. We didn't have it, we didn't have it and the Garden didn't have it, but we were breaking even, we were able to sustain it. We were building a network, and we were getting some advertising. It was doing well, but I think we really were the first ones to create the concept of the two streams of income, which CNN then used. TBS couldn't use it because that's purely a... you can't sell the service. You can sell a signal, I guess, but there's no local advertising. All of the components that exist today were started at Madison Square Garden Network, and eventually led to Nickelodeon and CNN, etc., etc. So those became a whole new world of cable, too, I think.

KELLER: Sure did! As you well know.

ROSENCRANS: Yeah, and it was exciting stuff!

KELLER: I didn't overstate it when I said you probably were the godfather of cable.

ROSENCRANS: Well, Black Entertainment Television... I was amazed, I didn't think there was room for all of those concepts, and today I just came back from – we have a home in Florida – and Adelphia Cable purveyor, they put a digital box in Wednesday morning, and I think we had 140 channels! And some of the stuff is so different. There's something there for every niche of society. So that was kind of the evolution, but the greatest thing is still C-SPAN because I think we've done something for the country.

KELLER: For which we never got paid, nor did we want to get paid. It's one of those...

ROSENCRANS: It's something we just take a lot of pride in, and it's been run with such integrity.

KELLER: Oh, no doubt, no doubt. You mentioned politics and Brian Lamb in the same breath – he'd shudder.

ROSENCRANS: Yeah, he has no interest in it. His book reviews, they are so interesting.

KELLER: Well, he's such a great interviewer and it was so great to interview him because he's a master at it.

ROSENCRANS: He puts himself in the background, but just gets the juices flowing from whoever he interviews.

KELLER: They really are good. Then UA Columbia, which it was called by this time, was starting to grow pretty big. You were one of the major MSOs.

ROSENCRANS: This was late '70s, early '80s, we were building big systems in the New Jersey and Westchester, San Antonio.

KELLER: Now you're in it big time.

ROSENCRANS: Small compared to today's MSOs, but...

KELLER: Yes, but big for that time.

ROSENCRANS: We were like eight or nine or ten, somewhere in that range.

KELLER: Didn't you ever get up to... How many subscribers was it when you left?

ROSENCRANS: About 500,000. What happened, we had some people who'd been in our company since 1962. Now we're coming in out of the, almost like the twenty year cycle, and how do they get out? A lot of older people – how can they get full value unless we sell the whole company? I didn't want to sell the company because, again, we had very little debt. If we'd stayed with that company we had a good piece of paper in the stock, we had very little debt, we could have acquired enormous amounts of properties and integrated into a huge company, but we got into a little proxy battle because the UA Theater people, they didn't want to come out. But I went along with the shareholders that wanted to get out.

KELLER: They were your originals!

ROSENCRANS: They were my original partners. They only way you get out is to sell control of the whole company, and if you're going to sell control you don't want to stay in as a minority.

KELLER: Didn't they take any money out at the IPO?

ROSENCRANS: No, that was purely a secondary. Wait a minute, that's not a secondary, that was a primary. That was purely for the company. Nobody had taken anything out. If you sell the company it's worth $90 a share, if you just stay in the marketplace it's worth $40, $30, whatever. So it was very hard for me to say no to people for whom it was an opportunity to get out. Let the majority of shareholders make that decision. But UA Theaters, they wanted to stay in the business because they felt that it was a good business.

KELLER: But they didn't want to buy out the other shareholders, though?

ROSENCRANS: They didn't have the money to pay that price, but they found a partner, Ted Rogers, and the two of them came together – "We'll pay the price. We'll buy the others out."

KELLER: Did that include you, or were you staying with them?

ROSENCRANS: I didn't want to hold my stock because I didn't want to be a minority with those people controlling the rest of the company. So we all sold our stock, but I stayed with the company, as did all our employees including Ken and the Harmons and whatever, and we were now under the... what did they call it? Rogers UA. It was a contentious situation because they were putting us through legal hoops and they were trying to prove that I was working for my own benefit, etc., etc.

KELLER: What did they have to gain by doing that? After all, you'd built the company.

ROSENCRANS: Well, they didn't want it to be sold. They didn't want it to be sold.

KELLER: Oh, that's the UA people, not the Rogers' people.

ROSENCRANS: Yeah, Rogers came in as a third party.

KELLER: White knight type of thing.

ROSENCRANS: Yeah, they were the white knight, whatever.

KELLER: They were good operators in Canada. They didn't understand the United States, I feel.

ROSENCRANS: Not at all, not at all. Ted was petrified of the politics down here, maybe with good reason. But, you know, we all kissed and made up at the end of the transaction when the deal was done, but Ted and I didn't hit it off too well because Ted had his own view of how to run a company, which was totally different from... He said to me, "Bob, you have to understand the difference between managers and owners. I'm an owner, you're a manager," that was what he was telling me.

KELLER: Well, yeah, and you had already sold your stock.

ROSENCRANS: He was right! He was right, I had no stock.

KELLER: You were an employee.

ROSENCRANS: But I didn't look at it that way. It was still my company in an emotional sense.

KELLER: You had your idea of diversified management, and he wanted corporate structure, didn't he?

ROSENCRANS: Well, yeah, very much overlooking everything.

KELLER: Was that where the big point of contention between the two of you came?

ROSENCRANS: Well, no, I think... let's see.

KELLER: Stock options, you also mentioned.

ROSENCRANS: Well, that was with UA, later. See, what happened, you had a two-headed monster. You had UA Theaters owning 49%, Ted Rogers owning 51%, and Ted wanted to... he had a bunch of franchises or systems in this country, he some stuff out west that he wanted to sell to this joint venture, and UA Theaters asked me to evaluate them. So I said, "Well, I think they're not worth what he's asking." So that didn't sit well with Ted. The upshot of it was that they couldn't get along, so they had a breakup clause in their contract that said if one side can offer... well, the company would be split in two in terms of systems, and then the one that wanted the breakup, the other party could pick the half they wanted. So they asked me to divide up the systems. I wasn't really battling it too much at that point, but it was clear they couldn't get along and they had a lot of disagreements. So I built a western kind of group, which included Florida, Texas, the Northwest, and countered that with the eastern properties, and they were maybe about 300,000 each. So since UA asked for the breakup, Ted had the pick, and since we had about 200 franchises in New Jersey and Westchester, Ted said I don't want any part of that because when the renewals come up, a Canadian, they're going to kill me. I'll go where there's simple franchises like San Antonio. So he picked the west, UA picked the east, and I can now go with UA, and we have half a company but they're promising all kinds of things and half the employees were split, Ken stayed with me, some others had to go with Rogers, depending on where they were located. So the company was split. That was 198-... the company was sold in '81, was split in '83. So I'm working for UA and I keep telling them, you've got to give some incentive to the top management here. We can't keep them. You have to pay them properly, you have to give them stock options based on certain performance guides, whatever, and that's true of me, too. You've got to think in those terms, and all they were thinking of was in terms of theater managers who are not very high level, they don't have the jobs that cable managers have. We jockeyed around, nothing ever happened. We had a lot of interesting discussions. We had a discussion with Time, Inc. about merging Manhattan Cable into our group, one idea that came up that didn't go very far. Some guy called Bob Wright of GE one day and said how about us acquiring a percentage of GE cable systems, merge them into UA, we'll have a much bigger company, you'll have a share of a bigger company, and well-managed, etc., etc., and we finally worked out a very exciting deal and we were only paying $800-900 a customer, in effect, for the GE customers.

KELLER: In '83 or '84?

ROSENCRANS: Yeah, it was an extraordinary deal, and somehow UA got suspicious that I was doing something behind their backs, I don't know what it was. I guess part of it was we were working on health plans that each company had, and the GE people had a much better health plan than we did. So I said, well, I think we have to conform ours to yours because you don't want GE employees with less than... So UA was very upset with that, that they all of the sudden had to upgrade their health plan across the company. Anyway, the deal was choppy and they wanted to be in all the meetings because they didn't know what I was... but I told them everything I was doing. I put memos together, sent them, kept them totally informed, and worked out a wonderful transaction. The day after the transaction is announced they call me and say, "We've decided we really can't get along with you. We want to terminate you." So, whew! I was at a dinner up in Liberty, NY. I was getting an award for something or other with a foundation I was involved with, and I went down to the lobby of one of those hotels and took a blood pressure test, and God, the blood pressure was very high, but it turned out to be the best thing that ever happened to me. My contract was good so I got years of salary, and I think their plan was ultimately not to act as an independent company but to sell, and they wanted to control the whole ball of wax, which they did, finally, to TCI. So that was '84 or so, and I was sitting on my back porch one day and Scott Ledbetter, who had left the company earlier, who didn't like the UA characters either, he came over every morning and said let's start our own company. The people at Mutual of New York who had financed our other transactions called me and said, "Look it, we'll put up 15 million, you and Scott and Ken put up 2 million, we'll put up a blind pool together and you go out and buy cable systems," and that was 1984. I said, "It sounds good to me." As a general partner, limited partnership arrangement, which was very generous, so I said, "Great, let's go," and that's what we did. And that created Columbia International in '84 or '85, and we jumped out and we bought systems right and left. We bought Ann Arbor, we bought some systems down in Virginia, and we built five clusters of systems.

KELLER: How many subscribers did International have?

ROSENCRANS: At the end when we sold it, it was like 250,000.

KELLER: Who'd you sell that to?

ROSENCRANS: All in five properties, so they were big systems. They weren't those wide spots on the road. All of my old guys came back. Ronnie Harmon, Homer Harmon, Ken. Marvin didn't because Marvin had the opportunity, when I was gone to UA they made him the key guy.

KELLER: They put him in Denver.

ROSENCRANS: And it was fine for him, it was perfect. Our needs weren't there anywhere at that moment. They evolved as we acquired systems. But strangely enough, all the troops came back and we built a marvelous company again, the same principles, the same decentralization.

KELLER: You do your job, I'll do mine.

ROSENCRANS: Yeah.

KELLER: Who did you sell International to?

ROSENCRANS: We sold that to three entities. We sold to Cox in Michigan, we sold to Jones in Virginia, and we sold to TCI in Portland, two suburbs of Portland, Vancouver, Washington and Beaverton, Washington.

KELLER: Where in Virginia?

ROSENCRANS: Prince William County.

KELLER: Oh, okay. Was that Virginia or was that Maryland?

ROSENCRANS: Virginia. Prince William County is just south of Fairfax. We had about five transactions putting the thing together into a big system, and my son Rick was responsible for that area. Beaverton was the last sale Cox made of their... that was their cutoff, they sold Beaverton, and we jumped in and made that deal. All the deals we made because we had the capital, again, in hand. I didn't take long. Three hours later... you know the business well enough, you know whether something's good or not, and we shook hands on a deal real quickly before the rest of the crowd would come in and push the price up. That was true of Ann Arbor. We bought that from John Saeman. We bought Beaverton from Cox. Bought Vancouver from... who'd we buy Vancouver from?

KELLER: Vancouver, Washington?

ROSENCRANS: Yeah, was that Cox, too?

KELLER: I think it was.

ROSENCRANS: No, we bought Beaverton from an independent by the name of Bill Bouse. Alan Gerry had the system and it was about to go under contract, then you had the crash of '87, looked like a crash, and he backed out. When he hiccupped we jumped in and said we'd make the deal and we ended up getting it.

KELLER: I didn't know that Alan ever went that far west.

ROSENCRANS: He did, at that time. He always rued the day that he lost... because Beaverton is just a tremendous market.

KELLER: Then what are you doing now?

ROSENCRANS: Well, I'm kind of involved in a lot of charitable situations. I'm involved with the Greenwich Hospital.

KELLER: You're not doing anything in telecommunications?

ROSENCRANS: Well, I am. I'm involved with Tom Semptonfelder. Do you know Tom?

KELLER: No, I know the name, but I don't know him.

ROSENCRANS: He worked for TCI, and he left TCI after they bought our system, and he started acquiring small systems around the country for very low prices when cable was very weak. He asked me if I'd invest, which I did, and we're about to sell all of those, we've sold them, and we're about to complete that partnership in the spring. We'll do very well with that. He has all small systems except one big one. The biggest one was Branson, Missouri, the music center. I'm involved with Andrew Tow, Leonard's son, in a programming venture called Global Japan, which has a long way to go. It's a programming service in Japan via satellite. I'm involved in a publishing company that published non-fiction books. One of my boys is in Ohio in the business of... he has a country club and builds homes, and I'm involved with him, and we've built a country inn and things like that. That's exciting. I'm involved with Rick in a number of ventures, my son Rick, and my son Ron has another business, and my daughter is a ceramicist.

KELLER: They all have their father's propensity toward entrepreneurship, huh?

ROSENCRANS: Well, yeah, a lot of things going on, and it's exciting. I'm invested in a few other things, which are all very... bring me into contact with some interesting people.

KELLER: You made a great, great contribution to the cable television industry over the years, no doubt about that.

ROSENCRANS: Oh, thank you, Jim. I appreciate that.

KELLER: I don't think there's anyone that would disagree with me on that at all.

ROSENCRANS: It's an amazing industry because you make so many lasting friendships.

KELLER: Isn't that true?

ROSENCRANS: When you walked in the door, I didn't hear the word Jim, I just heard Mr. Keller, so I didn't really... but the minute you walked in the door, it's funny, there's so many connections we all made over the years.

KELLER: You never really know, just over the time you formed these relationships and it's been great. Well, I'm going to end up, Bob, with the commercial at this point. This oral history was brought to you as a contribution and donation from the Gustave Hauser Foundation as part of the Hauser Foundation project of the Oral History Program of the National Cable Television and Museum. The date, again, is November 17, 2000. We're in the offices of Bob Rosencrans. Your narrator was Jim Keller. Thanks, Bob.

ROSENCRANS: Jim, thank you very much. I enjoyed that. Nice rethinking that whole time.

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Ted Rogers

Ted Rogers

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

Ralph Roberts

Ralph Roberts

Interview Date: Thursday July 27, 2000
Interview Location: Philadelphia, PA USA
Interviewer: Tom Southwick
Collection: Hauser Collection

SOUTHWICK: I'm Tom Southwick, and this is part of the Oral History Program for The Cable Television Center and Museum in Denver. It's July 27, the year 2000 and we're with Ralph J. Roberts who's the founder of Comcast Corporation here in his headquarters in Philadelphia. Mr. Roberts, if I may, I'd like to start by asking you a little bit about your childhood, where you grew up, what your parents did, what were some of the important events in your young life?

ROBERTS: Well, I grew up in New Rochelle, New York, which the Chamber of Commerce called "Little Island by the Sea" or some very romantic name, and it was on the Long Island Sound. I was there right through high school and then went to the University of Pennsylvania and sort of stayed in Philadelphia. The war was declared in 1941, which was the year I graduated, and I was fortunate enough to get a commission in the Navy and that's where I spent my war years.

SOUTHWICK: In Philadelphia, in the Navy?

ROBERTS: I'm sometimes ashamed to say it, but I was in Philadelphia for the entire time. I was on what they call an "LMD", a "Large Mahogany Desk".

(LAUGHTER)

SOUTHWICK: And what did your father do?

ROBERTS: My father was a manufacturing chemist, who also owned a chain of drugstores, and as they said, the fathers lived in New York and slept in New Rochelle.

SOUTHWICK: And did you have particular interests as a young man in terms of what your career might be? Were you interested in following in your father's footsteps or some other area?

ROBERTS: Well, my father died when I was 12 years old, and I guess as far as business is concerned I thought I'd always find a way to get into my own business, even at that age.

SOUTHWICK: And after the Navy, what did you do?

ROBERTS: After the Navy I joined a partnership with a fellow named Carol Stover, who was an engineer and we knew that the manufacturing facilities in the United States had to change because they were all set up for manufacturing war materials, and there were no products around for a lot of these manufacturers to make. So my partner, who was a very ingenious and inventive type fellow, got together with me and we developed some inventions that could be translated into real product and we sold them. For example, one product we sold was bottle handling equipment that went into Coca-Cola, and that was lifting the bottles out of the crates. It was the sort of a thing that went sort of criss-cross, it had two handles, and you put it down on top of the necks of the bottles, lifted them up and put them on a conveyor belt. That was our best product. Another product we had was called scented ink; it was perfumed ink, so if a girlfriend wanted to write to her boyfriend, when you opened the envelope this bouquet of fragrance came out. And finally, a product that we made was golf clubs, and here we went into the manufacturing ourselves, and the golf clubs were called the "Century Putter" because a shaft went down just behind center – you're not allowed to make a shaft that goes dead center, and then it becomes a mallet – they're back of dead center, but we changed the angle. There were three angles – upright, medium, and low – and I took these and I went from Philadelphia to Miami and stopped at every sporting goods shop and sold these golf clubs. I must have sold 100,000 golf clubs because you couldn't buy golf clubs, they weren't being made at that point, and putters are the only club that a guy will buy another of them without worrying about a whole set of clubs. Well, one day I was out on the putting green, because that's the way I worked, I'd go on the putting green and a pro would watch and then he'd come over and buy the club, and I hit the ball and the shaft went around like a circle, it bent completely. So I panicked and I called up my partner and said, "What happened?" He said, "Geez, the last 5,000 clubs I forgot to send to the heat treating department." So I said, "I think it's a good time for us to go out of business," which is what we did do.

SOUTHWICK: So the shaft is essentially melted...?

ROBERTS: It was very soft, so you hit the ball suddenly and it comes and bends. It was not very good. I also had an interesting experience with that club – in order to promote it, Bob Hope was in town, in Philadelphia, doing a show one time and I got backstage with the help of the Inquirer photographer and said to Bob Hope as he was leaving the stage, "Would you mind holding this club? I'm a veteran and I'm in the golf club business. I'd love to have your picture with the club." He said, "Sure, kid." He takes the club and he holds it and he stands as if he's going to putt with it, and I'm snapping away, or my friend from the Inquirer is, and when he left we came out with a big spread that said, "Bob Hope Centric Putter". We never got permission from him or anybody else, and that was our promotional piece.

SOUTHWICK: Wow! An endorsement from a big star. And what was your venture after the manufacturing experience?

ROBERTS: After that I went and got a real job. I went to work for an advertising agency in Philadelphia and I was there for quite some time.

SOUTHWICK: And what did you do?

ROBERTS: I started off as a copy writer and I became an account executive. One of my accounts was Muzak Corporation, the local Muzak operator, and I was invited to New York by the head of Muzak, who also owned Encyclopedia Britannica, and he offered me a job to be a marketing and advertising director of their company and I accepted that job and I commuted to New York for about 2 ½ years. And then I was offered a job at a company that manufactured men's belts, wallets, and jewelry called Pioneer, and I accepted that job in Philadelphia. I was tired of commuting anyway. I didn't think that I would hold that job in New York forever because a typical example is one day Bill Benton, who was the guy that started Benton and Bowles Advertising Agency and also was a Senator, called me up one day and he said, "Ralph, I'm going to land in St. Louis tomorrow and I'd like to have one line that you can give me that's quotable, that I can state. I'll call you back in an hour." When I got home that night I said, "You know, honey, it's time for me to look for a new job. I'm sure I can't keep up that good fortune." I don't remember what the line is, by the way.

SOUTHWICK: You were committed to staying in Philadelphia – you didn't want to move to New York?

ROBERTS: Well, I had three children at that time and I didn't want to uproot everybody and move to New York, and New York was in those days about an hour and a half away, and sometimes I would stay overnight in New York and come back to Philadelphia two nights later. When I went to work for Pioneer I was in charge of their marketing and advertising, and eventually, when I went there I asked them for an agreement that they wouldn't sell the business without giving me a chance to buy it – right of first refusal – and they agreed to do that. One day the owners came in and said, "We just agreed to sell the business to Swank." This company was the second largest belt manufacturer, but they also made jewelry and wallets and leather goods, 15,000 stores they sold in in the United States. So I said, "Wait a minute, you gave me a right of first refusal." He said, "Well, you don't have any money. How are you going to do it?" I said, "Let's go down and talk to the Philadelphia National Bank," and I sort of convinced them that if this business left Philadelphia they'd lose 200 or 300 jobs and they ought to help me out and buy the company and I'd pay them back someday. I remember I said, "How about a pay the interest," when they agreed to do it, they said, "You just raise your salary." In those days interest was maybe 3%. Well, I ran that business for five or six years, and one day I opened the newspaper and there was a big ad for something called Sans-A-Belt, beltless slacks, this was a new rage. I thought, "Gee whiz, if this goes on I'll be out of business," because I'm making belts as a principle product. I called up my buddy, Ray Hickock, and said, "How'd you like to buy my business?" He's been asking to do that for some years, and he said, "Great." So I sold the business to Hickock. Right after that, Hickock had a heart attack and he called me up and said, "You've got to come up here and run both businesses," he was from Rochester, "because my father's will said that if I can't run the business physically able to, that I'd have to turn it over to my brother, and my brother, as you know, is not a very smart fellow, and I'd rather have you there and the bank would give permission and when I get better you can go home and I'll be okay." So I felt obligated to do something and I did that. In the meantime, I took the money that I had gotten from selling the business and went into the venture capital business, and what I did was I sort of financed people that had great ideas that were new – a lot to do with the computer, a lot to do with leasing, and several other businesses – and one day, I meet a guy named Dan Aaron, who had been working for Jerrold.

SOUTHWICK: Now did he call you to come to see you?

ROBERTS: The story is that he was tired of working for Jerrold and he wanted to be a broker. He saw all the money that Daniels was making and he figured I can do that too. So he got a hold of his first client, who was a fellow named Pete Musser, who today is head of Safeguard, a very successful business, and he and Pete Musser decided they would find somebody to buy the business, and the business at that time was Tupelo, Mississippi. It had a few thousand subscribers and it wasn't going anywhere too fast, and the story they tell is one day he and Pete, they couldn't find anybody to buy it, and one day he and Pete were walking down the street and Pete said to Dan, "Here comes our fish. He just sold his business and he's got a lot of money." So between the two of them they sold me Tupelo, Mississippi and that was the beginning of our introduction to the cable business. I didn't pay too much attention to Tupelo because the deal with Dan was I'd only buy it if he would come and run it because I didn't know anything about cable, I didn't even know what it was. And Tupelo – nobody every heard of that, except I later found out that it was the birth place of Elvis Presley.

SOUTHWICK: And you had an accountant at Pioneer who kept your books and did your taxes. Is that right?

ROBERTS: Well, we had an accountant... when I sold the business what I did was I kept a cosmetic and toiletry business that I started called Mark Two, and so I still used Touche Ross, who was our accounting firm, I had a bookkeeper and my secretary and that was the whole company. Julian Brodsky had been an accountant over at Touche Ross when I was in the belt business. One day he came in to see me – this was after we bought Tupelo, I believe – he said, "You're going in the cable business. I think that's a great business. I'd like to come and go to work here." I said, "Julian, there's no room for you here, we're in these tiny offices, and I'm not sure I'd know what to do with you." He says, "Well, instead of paying Touche Ross you'll pay me. And the way I'll work it out you'll come out even. We'll pay them a little something but really I'll do all the work." So I said, "Okay." And sure enough, one day he comes in with a card table and a chair and he says, "Here's my furniture." And he set it up. So it was really, I guess, Dan ran the business, he knew the cable business; I was still doing the financial work and making placements for various investments; and Julian did the accounting and developed, as it happened over the years, some very innovative methods of financing cable systems, which certainly worked to our advantage. So, let's see, after that...

SOUTHWICK: What did you think of the cable business as you got into it?

ROBERTS: I didn't think very much of it. The business I was in, belts and wallets, were a very promotional business. You had all kinds of promotions, you had colors, you had all kinds of exciting things – gift merchandise – and you'd set up promotions with the department stores. It really was a venturesome kind of activity, I thought. The cable business, you put up a tower, you run a line down through the telephone poles, you charge everybody five dollars a month, and you don't do anything. So it didn't seem very appealing to me. But as I began to look at what was happening, I realized the cable business was the best of all the ones I had invested in and decided to go forward full boat. And I guess the next cable system we bought, I think, was in Sarasota, and again Dan was the guy who ran the business. It was exciting once we realized you got to develop programming and you could do other things that would make people want to buy... people loved cable television because more is better.

SOUTHWICK: This was in the early 1960s?

ROBERTS: Yeah.

SOUTHWICK: And did you start at that time to get involved with the industry in terms of going to the trade shows and meeting some of the other people?

ROBERTS: I got around and met other operators. That's one of the ways you learned the business by talking to people who had been in it longer than I had.

SOUTHWICK: Who were some of the ones that impressed you?

ROBERTS: Well, I think Chuck Dolan was always a hero.

SOUTHWICK: Why was he your hero?

ROBERTS: He started Home Box Office and later was able to get into the cable business directly, and he was probably the most innovative of most of the operators, I thought. And of course we became friends with John Malone. We were people who other people were willing to partner with because we seemed to be just reasonable operators, and we partnered, when we bought Westinghouse, with TCI...

SOUTHWICK: ATC was part of that deal?

ROBERTS: ATC, yes, and then we split it up between us and we also bid for Storer and eventually we got that. We lost at first to KKR; they overbid us by a very small amount. So we just kept growing after that.

SOUTHWICK: And how did you grow? How did you raise the money to do this? Julian has done an oral history with us and described in some detail, but were there certain principles you had as to how risky you were willing to be?

ROBERTS: Well, I was very risk averse. I didn't want to gamble the whole company on any one system, so what we did was we financed each system by itself and the manager and everybody knew that that system had certain obligations to pay off, and it protected the overall company in case one of them went down the drain. So we paid a little more interest for our money, but we slept every night. The smartest guys in the business didn't give away any equity. They held on, they borrowed as much as they could, and because the industry went up, they all ended up with far more worth in their pockets than somebody who was as conservative as I was.

SOUTHWICK: But you did end up going public.

ROBERTS: We went public in 1972. The stock came out at $7, and I think if you'd bought 1,000 shares at that time you'd have 3 million dollars today, so the thing really grew like topsy.

SOUTHWICK: Fantastic. Now, in the late '60s, the federal government began imposing some regulations on the cable industry, in the early '70s companies began to experience some problems because of that. Did that affect Comcast's growth or were you secure against that?

ROBERTS: We were always very financially secure because we always had a pot of money, and the reason for that was if the banks got too tough with us we could say, well, we'll finance it ourselves. So by keeping large amounts of cash I think we felt safer about it. In order to secure the money to buy Tupelo I went back to the Philadelphia National Bank, which had financed me to buy the belt company and the bank very willingly, because I knew them quite well, gave me the money and it was arranged that I would pay them back in the seventh year the entire amount. After I'd been in business with this company about three years I realized I could never pay them back in seven years because nobody really told me about capital expenditures and extensions.

SOUTHWICK: That you'd have to reinvest in the system.

ROBERTS: That you'd have to reinvest the money and keep making the needed capital to make the extensions in the business. So I went back to the bank – the guy's name was Jack McDowell – and I said, "Jack, this business can't pay off in seven years like we were told." Everybody told me in the beginning, in seven years you've got your money back. I said, "We need 12 years." So he said, "Wow, let's go find an insurance company." And so he and I went out and we got the Home Life Insurance Company, who gave us the first 12 year loan for cable, and Julian made projections as to how we would pay this back and how it would operate, and we came within 5% after 12 years to have it all paid off. And the payments that we made, because I think they gave us a certain number of years as a standstill after that, we started a payment program. So that set a pattern for us and from then on we only borrowed long-term money.

SOUTHWICK: And that was one of the first, maybe the first, insurance companies that were involved in financing cable television.

ROBERTS: I think it was. It changed the whole complex of financing cable.

SOUTHWICK: And tell me a little bit about the advent of satellite television from your perspective. How did that change the business?

ROBERTS: I think it was 1972, I'm not sure, that two things happened. One was Ted Turner in Atlanta putting up Channel 17. That enabled us to go all through the south and buy and develop cable properties because Channel 17 out of Atlanta was considered the greatest thing since sliced bread, and that was a big thing that he put it on the satellite. What amazed me was that when he applied to the FCC for the rights to do that, none of the networks objected. They all thought Ted Turner was crazy, and here overnight he created another network because he could go to anyplace in the United States. The other thing with the satellite was Home Box Office, and when that went up on the satellite that enabled us to go after the big cities because they were interested in movies without commercials, and that was a major turning point, I believe, for the cable industry.

SOUTHWICK: Before we get into the city franchising, were you concentrated in particular areas? Did you have a regional strategy as you grew, or did you just take advantage of whatever...?

ROBERTS: We took advantage of whatever came along. We did know that when we were in Mississippi that anything around that area we thought we would try to get a franchise for. However, when we went to Michigan, we began to concentrate a little bit on Michigan and then we had special guys going out and securing franchises. But deep in our hearts we would go anywhere in the United States, it didn't make any difference, because we found great similarity in operating one cable system as compared to another.

SOUTHWICK: And there was no preference in terms of buying an existing system or franchising and building a new one?

ROBERTS: It was cheaper to franchise and get the franchise and to start from scratch than to buy, but we did everything. We bought, we built, we did anything anyway we could make some progress.

SOUTHWICK: And how big was the company, roughly, in the early '70s? Can you give some sense of what the growth was, and was that a difficult process for you, growing quickly?

ROBERTS: No, we kept doubling our size, it seemed to me, as we moved along, but it was not difficult because I think Dan Aaron, who managed our businesses for a long time was a very capable administrator and he was able to set the company up from an operational point of view that was very dependable and I give him credit for having helped us create the cable systems that we did have, and I give Julian credit for figuring out a good financial way to finance them. The only thing we did wrong was we gave away a lot of equity along the road.

SOUTHWICK: Really? In terms of the stock?

ROBERTS: All of our employees got stock and we very early on spread the wealth around. Now the disadvantage is that the smarter guys who didn't do that so quickly ended up with a lot more money than I have, but we have a very nice business and I go to sleep every night and have no problems.

SOUTHWICK: As HBO came online it became possible for the cable operators to enter the big cities. What was Comcast's strategy there and what was your theory on how...?

ROBERTS: Well, there were franchises that we had even gotten that we had reception of three good channels and maybe another one that we didn't think would buy any more television, buy cable television. As soon as the satellite came on we started to go after the big cities, Philadelphia, Trenton, cities that were near by but that were major markets, and that meant a great spurt for the cable industry. I think it was 1972.

SOUTHWICK: And that was a highly competitive operation, the different cable operators bidding against each other.

ROBERTS: Well, we were bidding against each other, there is no question about that, and I think we did as well as anybody else did.

SOUTHWICK: Did some of the companies over promise in terms of what they could deliver?

ROBERTS: We believe we did not in our applications. I think we stuck pretty close to what we promised and it was not like Warner that had the hired troop. Lewis had to go out and withdraw the promises they had made, but they got the big city franchises and Drew Lewis got everybody to agree to take less.

SOUTHWICK: Or he sold them off to TCI or other companies.

ROBERTS: Something like that. Very smart fellow. He was on our board for awhile.

SOUTHWICK: It seems to me, looking at the history of Comcast that the Storer and then Westinghouse episodes were the ones that really boosted you into the ranks of the big companies. Can you tell me a little bit about how those came about?

ROBERTS: Well, Westinghouse, if I remember correctly, we decided that we would like to go after their properties when they announced they were going to sell them, and I think I got a call from Time Warner that said, "How'd you like to be our partner, and we said, "Swell." And then we got a call from, I'm not sure whether it was TCI or..., that said, "Would you like to be our partner," and we said, "We just decided we'd partner with Time Warner, but I'll ask them if they want to go three ways." They said, "Fine." And we went three ways.

SOUTHWICK: And why were you an attractive partner? You weren't the biggest.

ROBERTS: No, I think we were the easiest to get along with.

SOUTHWICK: In a fairly contentious group.

ROBERTS: Right.

SOUTHWICK: And that took you to another level then, in terms of size.

ROBERTS: Yeah, by the way, Julian has the best memory of anybody and if I've made some statements that aren't correct, Julian will be able to correct them.

SOUTHWICK: Very good. Well, he's gone through this process.

ROBERTS: You can leave out my mistakes.

SOUTHWICK: Very good. And you'll have a chance to look at the transcript of this and change it if you'd like.

ROBERTS: Okay.

SOUTHWICK: Was there a process in terms of educating Wall Street? You had common stock, it was traded, was there a process in terms of educating Wall Street about how this business worked? Were they receptive to cable in terms of the companies that made recommendations on what stock to buy, the analysts and so forth?

ROBERTS: Our experience with Wall Street has been very good. We never over-forecast and our idea was to come under in our forecasts as opposed to what we would actually do. So they could learn to believe what we said rather than having a lot of puffing. So I think we did very well with Wall Street, and they understood that this business was recurring monthly income and once you make a capital investment, and it's very expensive to get into the cable business, so you have quite a barrier to entry, but once you're there you have this recurring monthly income. Now there are overbuilders for cable and they're comparing their costs to what somebody else is paying for a subscriber and it appears that they can build it cheaper than paying the current growing rate. And the difference is, of course, their cost of construction is greater than ours has been. Most of ours is written off even though we've upgraded the systems and we think they're going to have some problems. But again, these people are being financed by Wall Street private money, not the public money, and we'll have to see. I don't think that the cable business is going to be too badly hurt because our mentality has changed. We're now very competitive. We're anxious to hold on to what we've got and expand it if possible, find new products. And what it did is it revitalized the companies, I think. I now our company is filled with these young guys who have got bushy tails and want to go racing out after a million things and it looks like a lot of what's out there is going to work. So I think the business is more exciting today than it was then.

SOUTHWICK: That's great. As the company moved into the big cities and grew and grew, did it experience customer service problems or image problems with the customers, and how did you address that in contrast?

ROBERTS: We made a big effort. Of course my advertising background is such that you should be good to your customers, so we have always tried to give the customers more than a fair break, and to answer the telephone as rapidly as possible, and to do all the other things that you want to do to make the customer feel wanted. I'm sure other cable operators must have had the same attitude, but there's no question that if you have something that people think is the only game in town, you're people, whether you like it or not, sometimes are a little huffy when they shouldn't be.

SOUTHWICK: And maybe encourage to be so by some of your competitors? The broadcasters and telephone companies?

ROBERTS: Well, we've never had friendly broadcasters, so you have to assume they're not going to speak too well of us, but in reality, you've got millions of people in one generation suddenly moved to a different kind of entertainment and you're bound to have some slips along the way, but I think generally people recognize that the closer you get to the customer the better off you are.

SOUTHWICK: And during this period you also raised five children.

ROBERTS: Oh, yes.

SOUTHWICK: And if you like, we'd love to have you tell us a little bit about each of them, particularly one who ended up here.

ROBERTS: Well, my wife is an actress, and she's had many theatrical experiences while she had five children. It's amazing. When I would get home at night, the big deal was the dinner table and everybody talked about what they did, and I think we encouraged our kids to do that, which gives you the greatest happiness and don't worry what anybody says about it. If you want to be a hotdog salesman, sell hotdogs. It doesn't make any difference as long as you enjoy it, because most people, I used to say, hate their jobs. They wish they were doing something else, and that's a very unhappy kind of a situation to find yourself in. So do what you think you'd like to do, and they all ended up exactly that way. The oldest is a girl, she was a Phi Beta Kappa at Penn. She got a Master's in City Planning at Penn, went to Harvard and got a Master's in Public Health, and then went on to Tufts Medical School, where she was in the public health department, and she loved it. One day, she was on a tennis court in Boston and she met a guy with an English accent who was very charming and he worked for one of the local banks. Anyway, she married him, they came back to Philadelphia, they bought a newspaper, a weekly newspaper, and they're both very happy with the newspaper in their lives. Unfortunately they don't have any children, which is a medical problem that they have. The second child is also a girl. She went to Penn Fine Arts department, went on and became an architect at the University of Washington in St. Louis. After she was working in an architect's office for some time she called me up one day and said, "Daddy, can I come home?" She'd been in Boston. I said, "Yes." She said, "You know, I really don't want to be an architect." I said, "After all these years that you spent?" Every summer they went to Mexico for low cost housing and they spent so much time. She said, "I want to be a graphic designer." And today she's a graphic designer and she had her own business and she's quite successful. The third child is a son. He just got tenure at the University of Denver. He's a research developmental psychologist. At the moment he's already studying the brain. He'd gotten a $250,000 grant from the National Science Foundation and a $15,000 grant from NASA, so he's really doing very nicely. He has one child, two pairs of corduroy pants, two shirts, and some sneakers, and a great heart. And he's a perfect skier, he's an A-1 skier living in Denver. The fourth child is Brian, and Brian is very unique in that he made up his mind what he wanted to be when he was almost in junior high school to senior high school. He wanted to be in the same business I was in. And he would come out to the office and sit around; he couldn't get enough of it. It's amazing!

SOUTHWICK: As a young boy?

ROBERTS: As a young boy! And he wanted to know about the cable business and what business we were doing. When he got out of college where he had been a finance major.

SOUTHWICK: He was also at Penn?

ROBERTS: Also at Penn, the Wharton School, he also was co-captain of the squash team and he was a BMOC in those days, Big Man on Campus, very popular, and he would play squash all week and be in a tournament on the weekends, and when he wasn't playing squash he was bugging me: "What's happening today? What did you do? What are you going to do next?" And finally when it came time for him to look for... when he graduated, he came in and said, "I'd like to go to work. When do I start?" I said, "Brian, go get yourself a job somewhere else. Take at least two years, you can bring us back some other thinking this way, or be brainwashed by what's going on." He refused to go for an interview. The Wharton School puts out a book on every student and they go through Wall Street. He got requests from the investment bankers, from insurance companies, some other people, "Come in, let's meet you." Playing squash is a big item on Wall Street, by the way. So, he refused to go, and the story is – a true story – he came to me one day and he says, "You don't want me to work here because you're rejecting me." I said, "I'm not rejecting you, Brian, you can start tomorrow." And he did start. But I said, "One thing, you're going to have to start at the very bottom because you don't want people to say you got your job because of your father." He said, "I don't care where you send me or what you tell me to do, I'll do it." So he started, he had one summer where he climbed the poles in Westmoreland, Pennsylvania and he made installations in the house and he lived out there by himself. Then the next job, we sent him to Michigan and he was there all by himself, and he went through whatever agonies you go through in Michigan when there's a strike of the automobile workers. And after that, I think he went to Trenton as an assistant and then finally became a manager, then a group manager, so he really went through the whole business. I'd never ran a cable system in my whole life, but Brian knows more about running a cable system than anybody in the whole company because he's been through every one of them. By the way, during this time he also went and sold Muzak because that was our other business. We were the largest Muzak operator in the United States.

SOUTHWICK: Oh, really? That goes back to your relationship with Muzak in the '50s.

ROBERTS: Yes, I didn't burn any bridges with Muzak when I left there, and my brother, who unfortunately passed away in 1972, had been the advertising director at Revlon and had a similar career to mine. He was also in advertising and marketing, and Muzak Corporation, after I had left for some time, invited him to come over to be a senior vice-president of the company, and one day he came in to me and he said, "You know, Ralph, we ought to buy some of these franchises. They're a license to steal as recurring monthly income." That was our favorite expression, just like cable. You put in the equipment and every month they send you money. So we bought 13 or 14 Muzak franchises across the United States and my brother Joe ran those franchises. Eventually we sold them, but at that time, Brian had to learn the Muzak business too.

SOUTHWICK: So he was selling Muzak to companies that put them in buildings?

ROBERTS: Yes, it was business to business, as they would say in the internet language today. So, to continue with Brian, he then moved into the financial end. I think he spent a summer living with Julian and working in a computer company in New Jersey. So if anybody was trained with blinders on like this... He sees nothing but the business. Brian has got a one track mind, at this point, on how to make the business better and he's very ingenious in his development and he's a very good negotiator. He has lots of street smarts and he's an honest, decent person at the same time.

SOUTHWICK: How and when did the two of you come to the decision that he should become CEO?

ROBERTS: As early as possible. I thought that if I was knocked off for some reason and I didn't make that arrangement, it would be "Well, he died and Brian got the job." So I thought it ought to be while I'm still here. Most entrepreneurial type people have difficulty in transferring full responsibility to their children, and in my case – our offices our adjacent to each other – and in my case I thought that that's the right way to do it. I think he was 30 years old, or maybe 31, when he was made president of the company, and nobody was going to question that because I was standing right there. People would ask me a question about something and I'd say, "Why don't you check with Brian. I really don't know."

SOUTHWICK: Great feeling, I would think.

ROBERTS: Eventually it sunk in that he was going to be the guy, and I think everybody respected him for the way he got there and I think they figured it was nice of me to get the hell out of the way.

SOUTHWICK: Can you talk a little bit about the relationship between the cable industry and the regulatory bodies, particular the Washington angle. Were you involved in lobbying congress over the years, for example, and meeting with the FCC?

ROBERTS: Yeah, I don't remember specifically who was who.

SOUTHWICK: Right, but just in general, did they understand each other? How does that relationship work? It's been up and down – I mean, sometimes they want to bash you and sometimes they've wanted to help you over the years.

ROBERTS: I think a lot has to do with the lobbying that's done by the television industry of networks and the cable people. We've always felt we were the underdog, that the networks were bigger and stronger and had many, many years on us in developing relationships, as did the telephone company. The cable people were kind of "Johnny come latelys" as far as going into the political arena. We never had to worry about Washington when it was a local situation, we had local rules and everybody seemed very contented. Along came the big pressure when the stronger the cable people got the more opposition there was and the more lobbying in Congress, and I think we never did as good a job as the telephone company, and that's really because of lack of knowledge and experience in how to go about it. But we continued to grow and we got better and better at what we were doing, and eventually we got to know the FCC chairman and all the people and they came visiting our conventions and learned more about the cable industry. So that I think they then became more understanding of what we were trying to do. I think today the FCC does know all about the cable industry and the fact that there's so much consolidation going on is probably the only place that you can say there might be a negative as far as cable people are concerned. Today it's hard to find somebody who is just a cable operator because they've been absorbed by other larger corporations.

SOUTHWICK: You must have had a lot of offers over the years to buy Comcast, and many of your colleagues in the business, people like Alan Gerry and so forth, at some point, took those offers. Why did you decide to stay in the business without selling out?

ROBERTS: I've always believed that it's better to have a business than just money because having just money has a lot of limitations. There are a lot of people around with nothing but money, and either they don't know what to do with their lives or they're just there, but having a business takes years and years to create and develop and if you don't have to sell it, why sell it? Why not enjoy all the fruits that come from being stimulated from whatever activity that you can participate in? So I've always told Brian, I said, "If it were me, I'd rather have the business than a few extra dollars."

SOUTHWICK: Interesting. You mentioned Ted Turner earlier, and I was wondering if you could recall the first time you met him, perhaps, or some of the...

ROBERTS: I think Ted Turner is one of the greatest creations we've got. He's remarkable. I remember him coming into my office one day, a very small office, and his getting down on his hands and knees and salaaming to me and saying, every time he went up and down, "You hate me. You hate me. You hate me. Why do you hate me?" So I said, "For Christ's sake Ted, get off the floor. What makes you think I hate you?" "Because you don't carry my channel on every one of your cable systems. You don't carry it here and you don't carry it there, and if you don't carry it that means you hate me." That was Ted Turner. Recently, Ted Turner received the Liberty Medal from the city of Philadelphia, and before the ceremony we were in a room having coffee and Ted comes over to me and he says, "Will you be my pallbearer? I'll be your pallbearer." I said, "What the hell makes you think of that?" "Oh, I'm just getting things lined up, I want to know if you'll be my pallbearer." Then he gets up to receive the Liberty Medal before thousands of people, and it's a network program, and he says, "Well, I really don't deserve this medal. This medal should go to all my people that work in our company that have done it, and it should go to the cable people. If it hadn't been for them, I'd never have anything, and there's one of them sitting out there right now – Ralph Roberts – he's a fine fellow and he supported me." So, Ted Turner is quite a character but he's got a heart of gold and he really believes what he says. I think he's terrific.

SOUTHWICK: What were your relationships early on with Jerry Levin and HBO? Did he come and call on you to try to get you to carry HBO?

ROBERTS: Well, in the early days of Jerry Levin, Dan Aaron was the guy who made most of the contact and Jerry was always an extraordinarily smart fellow and he was a great credit to the industry and he handled himself very well. So I only can think of good things about Jerry.

SOUTHWICK: Let me ask you a little bit about, if you can kind of look forward, you've got a lot of competition from direct broadcast satellites, from overbuilders, from all corners of the universe, and yet it seems the cable industry also has lots of new opportunities for new kinds of businesses – high-speed data, which is going forward quickly, and digital, and stuff like that – how do you see things developing over the next ten years, if you can look that far forward?

ROBERTS: Well, it's an old cliché when you say necessity is the mother of invention. Cable people have to develop new services because you're going to lose business to the satellite or to overbuilders you've got to replace it with something, and so therefore I think we're challenged to find new products. A good example is digital – we've sold hundreds and hundreds of thousands of digital subscribers at $9.95 each, all brand new money. And I think that's an example of getting something that fits in with the operation that you can sell and will create new revenues, so I think it's a necessity for us to do this and develop it, and when you have enough guys thinking about it you're going to come up with some good products.

SOUTHWICK: It seems to me looking at the cable industry that we have managed falling into the trap that the broadcast networks were in for awhile where the world would never change and that they would always dominate and everything would stay the same. How do you kind of keep an entrepreneurial outlook when you've gotten so big? Is that a challenge?

ROBERTS: Well, it all depends on how you stimulate the folks around you, and I'm considered the bull in the china shop here. I'm always willing to go ahead and take a chance and get something else. Surprising, but I figure that I'm more conservative in other areas so I can afford to be a little more liberal here, but we've gone into many businesses – we've gone into QVC, which is a tremendous business, we did buy the sport teams here in the Philadelphia area and the stadiums contained therein, and we're willing to go into other businesses. We just started Julian off in a venture capital fund. It has nothing to do with cable, it so happens, but it's there, it's to be taken if you just reach out for it. That's called opportunism, and I think that our mentality is such we're willing to take the risk. Now, that's a very hard spirit to keep going as the company becomes larger and more bureaucratic, and one of the things I think we've tried to do here is by example, is to keep it a family affair and we have a university we call Comcast University, where we bring in the people, many of whom we've never met because they were either with Jones's systems or with some other systems that we acquired and we want to get to know them and we want them to get to know us, and we're very loosy-goosy about talking to people and telling them the door is always open. One of my fun things is talking to a crowd of our people and saying, "By the way, if somebody's not treating you right, call me up about it. Here's my telephone number."

SOUTHWICK: And do people?

ROBERTS: Once in a while. But they love it, knowing that you really are interested and people like what they're doing. Same thing I told my kids – if you don't like your job, it's a shame. You ought to change your job or improve it, or do something. To spend your life with something you don't like is not so good.

SOUTHWICK: I know you've been involved very much in Philadelphia and with the University of Pennsylvania, can you talk a little bit about your thoughts in terms of the philanthropic duties or involvement with community that somebody who is a successful businessman ought to pursue?

ROBERTS: Well, I have a foundation that I put a lot of stock in that I had in the company, and that foundation gives away the maximum amount of money every year. We also have a foundation for the corporation and we divide the money up with all the managers and tell them that they should use that money for their communities and to try to find a way to help out other people and make it known that they're willing to do that. At one point in time, we were the largest giver, I think, for United Way in that we provided doughnuts, cable commercial doughnuts, to our managers where the guy in the middle could say, "And my name is John Jones, I'm the manager of the cable system. Today we salute the Boy Scouts and we're giving five scholarships to them today." Then he comes back, "This is part of the United Way Program," for so and so, and so and so, and I think – they told us at least – that we contributed more than anybody else through that device and so I think that cable people are very responsive to their communities, and if you look at, I think you take any cable system, they make contributions and do things for the community so that people get to know them. So I think cable is a very generous, at least I suspect they are, same as we are, as a contributor to the good of the community.

SOUTHWICK: Terrific. Well, thank you for taking the time to visit with us today.

ROBERTS: A pleasure to talk to you.

SOUTHWICK: I think anybody listening to the history of your life would say, "Next time around I'd like to be Ralph Roberts."

ROBERTS: Well, I don't know about that.

SOUTHWICK: A marvelous family and a great success in a career, you can't ask for much more than that.

ROBERTS: Well, I can tell you, I haven't got anything to complain about from that point.

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Brian L. Roberts

Brian Roberts

Interview Date: Thursday August 24, 2006
Interview Location: Philadelphia, PA
Interviewer: Libby O'Connell
Collection: Hauser Collection

O'CONNELL: Hi, I'm Libby O'Connell. I'm here interviewing Brian Roberts, Chairman and CEO of Comcast Corporation. Today is August 24, 2006 and I'm here conducting an interview for The Cable Center's Oral History Program. Welcome Brian. I'm glad you could join us.

ROBERTS: Thanks, Libby. Glad to be here.

O'CONNELL: It's nice to have you here. You know, there are a whole collection of these oral histories on the website and you can go in and they're asking people how they got involved in cable and everyone has a different story. You have a very different story compared to most people. What was it like growing up in a cable family?

ROBERTS: Well, first of all, there are five kids in my family, my brothers and sisters, and my parents really never pushed their passion onto any of the kids so every one of my family members is enjoying their own life and enjoying their own passions. In my case, business was appealing from a disgustingly young age of like five or six that I wanted to work with my father. In those days, it wasn't even called cable television; it was community antenna television and it wasn't as exciting a business, I think, as it is now, but the dream was to perpetuate and build a company that could go on for generations and work with my father in doing that.

O'CONNELL: Your dad tells a story that when you were about ten you started going to meetings with him. Is that right? Is he exaggerating?

ROBERTS: Sadly, no, he's not exaggerating. In those days there was not quite the videogame excitement of stay at home as a young kid and I used to tag along with my father. He would literally sit me in the corner and say, "Just watch and don't say anything," and that lasted about ten minutes and then I'd put my hand up and say, "Well, I thought of one thing..." – usually stupid ideas, but he nurtured me. He wanted it, I wanted it to work. It wasn't because, well, this is the way I do it, sonny, so therefore this is the way you should do it. From the beginning it's been, I think, a dream for him, too. So we've been very lucky.

O'CONNELL: You went to Wharton undergrad, right? I think you're five years younger than I am.

ROBERTS: I graduated in 1981, and my father graduated from Wharton in 1941, so we're forty years apart and it was a great place, and is a great place.

O'CONNELL: So you graduated in '81, and then when did you start working at Comcast?

ROBERTS: '81.

O'CONNELL: '81!

ROBERTS: I had one great summer off. I played in the U.S. squash team in Israel in the Maccabiah Games; I traveled around Europe by myself, met some friends, and then sort of thought to myself around September after a long summer of traveling that if things go really well that may be it for three month vacations for the rest of my life, which is a depressing thought but it's an energizing thought in terms of if you find something you love. So I started in Trenton, New Jersey as a trainee. I had worked in the previous summers in high school and college climbing poles and selling door-to-door and getting on getting new franchises, but this was when the rubber met the road. If I was going to have the fantasy end and the reality begin, it was going to be September 1981. I went to Trenton and it was an urban market that the previous owner of the franchise had gone to the banks and to the equity community and said, "Raise me the money to build Trenton, New Jersey," the state capital, a growing community because you also had the suburbs in Ewing and that part of New Jersey, and no bank would give the money because in Trenton you got the New York TV signal and all the Philadelphia TV signals, so there were 20-some channels that you could get, lots of different sports and news, and therefore, why do you need cable TV in 1981? The gentleman had to give away his franchise and take a tiny interest, and Comcast came along and said, "We'll put up the money," and the first 1,000 customers were signing up when I got there. We have 35,000 or so now, and all that happened in the first couple years and it was very, very exciting.

O'CONNELL: That is exciting. So from Trenton, is that when you went out to Michigan after that?

ROBERTS: Yes. So I worked in Trenton a little bit – I became the controller of the system. A bad story, but an instructive story, was we had no bulletproof glass and we had no armored car pickup to take the cash. We were very used at Comcast to just getting checks in the mail. In Trenton, New Jersey, a lot of the customers paid in cash and they wanted to pay three months in advance and give you hundreds of dollars of cash and then worry about it in three months. So when the lines got busy, we all worked the cash register, then at the end of the day we took all the cash, put it in an envelope and drop it literally in – before ATM machines – you went to the bank safety deposit box. We also had a safe in the back of the office for leaving the cash in the middle of the day. One night, it was a person's job to take the cash and put it in the bank and they didn't do it, and it was overnight – that wasn't the first time that had happened. The next day the cash was gone and there was no break-in, the safe was open, and we lost about $20,000. I should have been fired because my job was to be the controller. One of our employees showed up the next day in a fur coat and resigned, said they were moving to Florida. True story. We called the police and said, "Well, it looks like an inside job, this person had access." They said there's no proof. The person quit, never to be heard from again, and I learned a very valuable lesson. We now have bulletproof glass, we have Brinks Security picking up the cash in the middle of the day, but in those days Comcast didn't have a procedure or a policy and we were making it like the Wild West. About a year later I got the call from Dan Aaron who said we'd like you to move to Flint, Michigan, and I remember him saying I really think this is good for you. My mother was in tears because I'd always lived in Philadelphia or nearby and she said don't marry a girl from Flint. I want you to come home to Philadelphia. For me that was really the first test. Flint was 24% unemployment, we were really hurting, and there was a question of could it make it in an auto town when GM was on strike and it was the highest unemployment in the nation, and I went out to do marketing and customer service and new sales. We had the best year, I think, Flint's ever had – not because of me, but it taught me another lesson which was in tough times cable is a great value, and if you can't afford to go to Disney World, you can't afford to go on holiday with your family in Europe or wherever, well, let's make sure we have 30,000 hours of entertainment in our home. We grew from something like 59,000 customers to 65,000 customers that year with the highest unemployment in the country. That was a lesson, obviously, that stayed with me for 25 years later.

O'CONNELL: Does Comcast still own the Flint system?

ROBERTS: Absolutely, and I like visiting, it's been a couple years, but we then made a big play into all of Michigan and Michigan's one of our most important markets.

O'CONNELL: And is your wife from Michigan?

ROBERTS: No.

O'CONNELL: Your mom didn't have anything to worry about?

ROBERTS: I came back – I went back to Trenton as the general manager, lived in Princeton, and then several... maybe a year or two later I was brought to Philadelphia as an area vice-president, and that's when I met my wife and we've been married for 21 years here in 2006.

O'CONNELL: So you married a local girl. That's nice. Did you ever worry about people thinking, oh, here comes Ralph's kid; he's just here because he's the boss's son. What does he know? Did you ever have to deal with that?

ROBERTS: No, I never worried about that at all. Come on! You're the kid of a boss and I would say that's... one of the single most important episodes in my life also occurred when I was 16, actually I was 15. Just before I could drive a car I had a summer job in a business Comcast had then called Storecast. My father liked the word "cast" and this almost had to do with supermarket merchandising and the idea was you'd go to a supermarket and you look at certain products, you paid your money to see if their product was on the shelf and if it wasn't, go and see a general manager and ask him to order more. So I went to fill out the paperwork to become an employee for the summer and the person who was the controller of the system, a lady, took me into her office, closed the door, looked me dead in the eye – I had my best tie on and a jacket, I'm 15 years old – and she said, "I don't give a gosh darn whose son you are. If you work for me you're going to work." I practically burst out in tears – what have I done wrong and already I'm being screamed at. Obviously that one stuck with me too, and I think as I talk to other people who think of going into any family business, who are working with somebody who is a parent, you've got to get over this one or don't do it. If it's going to take the fun out of it, that people will always say, well, the only reason Brian's successful is he was born with a silver spoon, don't do it. If you can deal with that, it will always rub you a little bit, but in the end you say, you know what? I don't want to give up this opportunity because of someone else's view of me. I'm okay with that. Probably a little bit of ego/confidence that you have to have in yourself. Then it's the best in the world to work with a family, but you will always have people say, well, I didn't get that job because you're here, and I think Comcast is a very different company but the kind of people who want to work here say, well, I like the fact there's stability of the family involvement. I think it's a positive when you're making long-term investment decisions, there's no politics, no one's just taking credit for the wrong reasons, and it's a wonderful environment if you can get it right. I really think... I give all the credit, really, to my father for setting that tone with the other employees that Brian's not a threat, this is all part of the plan, and if he's up to it and you're up to it, this can be an even better outcome for the company.

O'CONNELL: Well, I think it helps that you delivered. It's one thing to say Brian's not a threat, it's another to say you guys have a CEO who's really been a visionary, and I don't mean to sound too laudatory here, but what Comcast is doing is pretty amazing.

ROBERTS: You know, I chalk it up to being in the right place at the right time. My father was in the men's belt business and I don't think anybody would be calling me a visionary, but I probably would be in the men's belt business today. So I think some of it's luck. I heard a great quote Warren Buffet once gave – "I work 18 hours a day to be lucky." Maybe it wasn't Warren Buffet but somebody, you've got to make your own luck. It's been a nice 25 years.

O'CONNELL: I'm going to ask you a little bit about some of the times when you thought that the industry was shifting, okay? I'm going to go back to the business stuff. I like the family history. When I do history about Gettysburg or whatever topic I'm working on, I'm always interested in the cause and... but for The Cable Center I'm going to get back to the trade.

ROBERTS: Fair enough. The business of cable.

O'CONNELL: You have built Comcast into the biggest cable media entertainment company in the country. It's the biggest in the world, I would think, isn't it?

ROBERTS: I hope so. We're trying.

O'CONNELL: When you began your acquisitions or building out... when you bought QVC or your sports franchises, was there ever a moment when you thought this is when I'm going to a whole new level, this is when I'm building this company up?

ROBERTS: That's a great question. I think there are a couple of those moments, and the answer is different for Comcast, obviously, than it is for the cable industry, which also had seminal moments as we know. For Comcast, I think, my history really began back in Trenton, so let's call it 1981 but the company was born in 1963. If you talk to my dad and Julian and Dan, there are some moments in the company history from '63 to '81 that probably make or break the whole game, going public in 1972, some high and lows. But for me the first big, big moment was Storer Cable. Storer Communications was under siege. It was the beginning of the '80s, and if you remember the movie Wall Street, the '80s was a rock and roll period of Wall Street with junk bonds and Mike Milken, and so Comcast had made... the largest loan in the company's history was less than 100 million dollars, and along came a company, Storer, which was in broadcast and cable, and somebody called Coniston Partners bought 5 or 10 percent of their stock and announced that they were seeking to break up the company and it was the beginning of the raiders. So Mr. Storer took to figuring out how to get out of this dilemma and he went to Henry Kravitz and KKR, and they agreed to buy all of Storer at a price of, I can't remember, but let's call it $80 a share. That would make Coniston happy, KKR happy, and Peter Storer sold his company, and it was a management buyout, or a private equity that we would call today – the first one of its kind in our business. The investment bankers came to us and said, well, they're getting away with a cheap deal. Why doesn't Comcast make a bid? Well, that was about a 2-2 ½ billion dollar deal, and we had never borrowed more than 100 million. But because we'd always made every interest payment and every principle payment... I say "we" very unfairly, "they" – Ralph, Julian and Dan. Our first long-term banker, Lehman Brothers, Shearson Lehman, said that they would put up the 2 billion dollars, they would guarantee us. So based on that, Comcast began to make a bid for Storer to top KKR. A funny thing happened. They went to their credit committee at Lehman and it got turned down after we were out there, hanging out there, which had never happened, and it took about 20 years for Comcast to get over that moment but we're well past it. It was horrible. So amazingly, the lawyer that my dad had hired, a guy named Steve Volk, called up and said, "I have a friend at Merrill Lynch. I think Merrill Lynch might stand in where these guys walked away." Lo and behold, Merrill Lynch did in a week. So Comcast made a bid and topped Henry Kravitz. The company then decided to run an auction and we went down – my dad and Julian went and presented to the Storer board, Henry Kravitz went and presented to the Storer board, they both revised their bids and the board picked KKR even though it was a lower bid and Comcast walked away empty-handed, lost some money but not too much. It was "Wow! Who's Comcast? How did this company with 100 million dollar loan suddenly come up with 2 billion dollars in a month?" Shortly thereafter, Group W, Westinghouse decided to put itself up for sale and they were a big conglomerate in those days, and they needed to sell it by the end of the second quarter for whatever reason. They told everybody bids are due before the end of the second quarter and we're going to sign a definitive agreement. John Malone and Stuart Blair, both of TCI, called up Julian and my dad and said, "Gee, you guys look like you're hungry. We don't really need to own all of it, could we be your partner? The same time, Nick Nicholas of Time, Inc. called and said, "Gee, we don't really think we want it all. Can we be your partner?" And literally we were the 18th largest cable company, I think, and they were 2 and 3 trying to buy 1. But they didn't really want to go against Comcast and the fact that we had raised all that money for Storer, and we created this first ever three-way deal, which Westinghouse was happy with, and we went in and some people think that was the buy of the century in buying Group W Cable, splitting it up, and we eventually sold some systems to some others and it was, to me, that number 2 and number 3 and number 18 were all working together, and what catapulted us into top five, top ten cable company.

O'CONNELL: The interesting thing about that is that's because of a loss on the Storer bid. You had the assets but you didn't make the deal, but that opened the door to making the deal with Group W.

ROBERTS: Correct. I think I've taken away that the entrepreneurial spirit of this industry is what it's all about. Something good comes out of something bad. If life is about taking a swing every once in a while, even if you make a mistake, usually something good comes from that experience, and that's exactly the point of the story. Then just as icing on the cake, Henry Kravitz was ready to sell Storer – he also got the buy of the century as we knew at the time – and he sold and got all his money back just for the cable and kept the broadcasting and tripled his money, or whatever he did, and once again, the three of us got together to buy Storer and at the very last minute Time, Inc. dropped out and we ended up going 50/50...

O'CONNELL: So you split it with TCI.

ROBERTS: Which was a real financial stretch for little Comcast and big TCI, and again, that doubled us in size again. So those two all happened in a couple years just when I got to...

O'CONNELL: Right. You could feel the jet engines starting up.

ROBERTS: In 1985, I think is when some of this happened and then it just kept going. Then we did some larger deals and we kept getting bigger and we were very acquisitive throughout the '80s and into the '90s.

O'CONNELL: What about program acquisition?

ROBERTS: At that time Ted Turner came to the industry and said, "Bail me out." John Malone and Nick Nicholas put some money up, Amos put some money up from Continental, and we made a tough, probably a mistake, and we said, "We're not going to control that. Why do we want to own 10% of Turner?" Everyone made a lot a lot of money on that deal, but we were not in the mindset of being an investor but we were in the mindset of being an operator. I think that probably has retarded our programming development for a long time because we didn't get in on Discovery Channel or A&E and other ideas that were floating around at the time. People were all partners, as you know, you have multiple owners at A&E, same thing is true with Discovery, BET, and Turner. But we put in a few million dollars and then we bought Storer and they owned some Turner. When it was all said and done, Ted called me up and John called me up and asked...

O'CONNELL: John Malone?

ROBERTS: Yes, John Malone – called and asked whether I would come on the board. Nobody at Comcast was focused on programming, I was this young guy. I was flattered, my father thought this is fantastic. There was some consternation internally whether we were getting in with a supplier, and was it really appropriate to be on the board, but all the other cable guys were on that board that had invested, and I was Ted's director. He and I had an understanding that he literally took his selection and said, "I'd like to put Brian in." That shows you how smart Ted Turner is. He knew my vote would never really be the swing vote, but he knew how it would get another cable company to care more – who was now bigger than when we had started – to care about his company. And when it got down to one very tough day, Turner wanted to buy a movie studio, New Line – ultimately they made Lord of the Rings – and Castle Rock. Allen Horn was running Castle Rock, who is now the president of Warner Bros. It was a divided board and it actually did come down to... I think they could have reconvened the board and gotten around it, but the last person to vote on a tie matter was yours truly and helped Ted buy Castle Rock and New Line. So he's very fond of me.

O'CONNELL: That's great. That's a great story. I had no idea that was...

ROBERTS: Well, Time Warner felt that it was a conflict and they already owned Warner Bros., and they didn't really want Ted to do that and the movies may not make money, and it was before they bought Turner, but they voted no and TCI voted yes and it was a tie. It came down to the last vote, at least that day. It's kind of a fun memory, as a young person to realize you could make a difference.

O'CONNELL: When did you get QVC? That was a big step in programming. That's been a very successful network for you guys.

ROBERTS: Very successful. Well, it's a great story. My father, one day, we were still in Bala Cynwyd so it was very early – even before that Dan Aaron had come to see my dad and said, "There's this channel we're carrying in our Willow Grove system that no one asked us if we could carry called Home Shopping Network, and it turns out it's wildly successful, and if you watch it, it's incredible. They sell things all day long." My father's background being in men's belts, men's cologne, selling things...

O'CONNELL: Made sense to him, right.

ROBERTS: Dan went and tried to buy HSN and they told him thanks, but no thanks. One day, a guy named Joe Siegal wandered into my father's office and said, "I started the Franklin Mint, I sold it, I had a five year non-compete. Today's five years later and I'd like to go into these 17 businesses." Number 12 was television shopping. I wasn't in the room, but my father likes to say, he said, "Joe, if you're the guy that started the Franklin Mint – I love the Franklin Mint, what a great concept – if you want to start a shopping channel, Comcast will put you on every one of our system, we'll give you a million dollars to get going, and let's do it."

O'CONNELL: When was this, do you remember?

ROBERTS: QVC I think is either 15 or 20 years old. I'm embarrassed to say I don't remember sitting here this second, and it was three months before they were in business because Joe was brought in by a guy named Pete Musser, who was the guy that helped sell a system in Tupelo, Mississippi to my dad, so he had a warm spot in his heart for Pete. Joe left the room and said, "Okay, I'm dropping every other idea. I'm only working on this channel. I'm going to call it QVC." He proved to be one of the great entrepreneurs I've ever met. He'd call my house at 6:00 in the morning, my wife would answer the phone, "Hello?" and he would say, "Brian there?" Not "hi", "sorry", just "Brian there?" "Had a meeting yesterday with John Malone. He will carry the channel if we'll give him this." He was all business and it was incredible. 90 days later he had put together the whole channel and he was ready to take it public. The night before the IPO – and the deal was my father dreamed up with Joe a scheme that you go to every cable company and say, "You get a share of stock at a dollar, it's going public at 10, for every subscriber you give us. Sign this contract, we'll pay you 5% of the revenues and on top of that you can have a share of stock at a dollar that's going to go public at 10." Instantly every cable company said, "Okay, count me in." Well, some had already started another channel called CVN – Cable Value Network – and said I'll carry two of these. If I can get a 10 dollar stock for a dollar, here's a million subs, 2 million subs. And Joe... of course it was a brilliant concept. Everybody wins. The more subs, the more the stock's really worth 10, and on you go. The night before the IPO, I'm sitting at my desk, I'm now a group vice-president back in Philadelphia, and after hours in those days just a few of us in the corporate office, and the phone rings – we had a system where it would ring the whole office, you didn't have directed dialing – and so you'd pick up the after hour line if you were still working. A guy says, "Hello, is Mr. Roberts there?" I said, "Well, this is Mr. Roberts, this is Brian Roberts. I'm not really Mr. Roberts, that's Ralph." He said, "Well, is Ralph there?" I said, "No, he's not." He said, "Well, my name is Roy Furman, and you're Brian Roberts?" "Yes." "What's your title?" "I'm vice-president." He said, "Okay. I'm doing something called underwriter's due diligence," which I had never heard of, "and the company taking QVC public was called Furman Selz, and this was Mr. Furman. He said, "I want to know whether you're going to carry QVC in a million homes like this contract says, and I want to know that you think if this channel ever gets on the air that you think it has the prospects that it says in the prospectus." So basically the liability of this entire scheme is coming down in some ways to this phone call. I said, "Yeah, we'll put it on the air. What do I know? That was what we said we'd do, we certainly will do it." The stock opened at $27 a share. It was the hottest IPO that year. They went to 100 million in sales in a year or two. The fastest company, according to Joe who's a great promoter, of any company start-up at that time to get to 100 million in revenues, it was faster than any other company in history. QVC went on to... we sold ultimately our stake, which we paid about 300 million for after many, many longer versions than the story here, for 8 billion dollars to John Malone. We built QVC with Barry Diller after Joe retired. It went on to prove to make a billion dollars a year in cash flow, and it all started with a little conversation in Ralph's office.

O'CONNELL: One of the exciting things about the cable industry is that it starts just as this cable going into people's houses and now it's on all sorts of technological platforms. Do you want to tell us a little bit about what Comcast has done in that area?

ROBERTS: This is probably the single most important area of what makes it fun to come to work every day after a lot of years in the same business. I feel sorry for guys in other industries who enjoy their company but the product of business they're in, let's use radio, the same radio then is the same radio now. That is certainly not the case with cable TV. Somewhere along the line that got recognized as we went out of the construction business and the second great wave then became programming. We talked a little bit about Ted Turner, but many, many entrepreneurs got into programming and it changed the broadcast versus cable. I think the third great era was the recognition that we could do more technologically than just even deliver television. My memory would be that a lot of the credit for this goes to John Malone. He was, and is, an engineer by training. He ran Bell Labs, or worked at Bell Labs, ran Jerrold Electronics, and was yet not just an engineering guy. He was actually a business genius. So he had the idea, along with some others, particularly Dick Leghorn and others, to start something called Cable Labs. Just as with Turner and John came to me and said, "I've told Ted he should put on his board," he said, "I've been asked to chair this Cable Labs. I've never done an industry thing," I don't think he ever was even on the NCTA board, but he was going to put this new idea together with Dick Leghorn, would I be the vice-chair? "You're young, you're technology oriented." We've traveled the world together as a group to scour ideas for what our wire could do because now we had this wire everywhere. We were in Japan, we were in Europe, we were in Silicon Valley, we've been to Korea, we've been to consumer electronics shows together, and all over. It's been fantastic. One of the ideas, we were sitting in Tokyo at the Japanese Consumer Electronics Show talking about high definition television, and literally the TV set was $30,000. That was the cheapest HD, and John Malone sat there and said to one of the Japanese consumer electronics companies, I can't remember, maybe Panasonic, "What if we take 100,000 and we'll seed the U.S. market with high def TV." And the guy took his calculator out and started calculating what discount he'd give us if we'd buy 100,000 of these things. Now, nobody had the slightest interest in buying 100,000 $30,000 TV sets. If you'd get them for half price I don't think we'd take them either. But it was a great memory of they'd never even heard of cable TV and who were we to come in there and suggest really making the market happen because it was the broadcasters that should be doing this kind of thing, or satellite, and from that we started a relationship with these companies and today we're the largest distributor of high definition television in the U.S. We had a similar experience on data. Bill Schlier, John and myself, and Dick Green and others were sitting at breakfast one morning and we're talking about "Well, what about this data business?" There was no internet. "What if we tried to do data over our cable lines? A number of us went back and we partnered with Intel and others partnered with other companies, and the next thing you know broadband was born.

O'CONNELL: So the cable modems, which I can't imagine life without my cable modem, I've had it for a long time and just using dial up doesn't seem possible anymore in our lives today. I think that's something that's just really revolutionized people's life.

ROBERTS: Arguably in the long-run, maybe more than cable television will. What an amazing business that you could actually have a double, a second act, maybe even bigger than the first act. A famous act for Comcast was... one of those Cable Lab trips was to Microsoft and to Intel, and we decided to put a slide together. In those days, they would give us presentations and so we sat around and said, "Well, we ought to have a Cable Labs presentation." So we made one slide and showed the percentage of our homes we were rebuilding with fiber optics and when we would get to a whole new platform. About 2/3 of the industry was already hybrid fiber coax. Unfortunately, the 1/3 was John; he was the laggard. He had much more pressure as the largest company and had decided to wait until the technology was more proven and the economics were more proven, but because he was the largest and wasn't as aggressive at that moment in time, all the big companies thought cable wasn't doing anything, and therefore the phone companies were going to be the ones to put fiber in. On this tour, it was our goal to say as politely as we could that we really had a vision and we really were going to get there first. We went to Intel and I remember meeting Andy Grove, and he was telling us how great the phone companies were and we pulled out our slide and he said, "This slide can't be true. You're not 2/3 done. The phone companies only have 5%." Dick Green stood up and said, "This is absolutely true." Andy looked over at John and said, "Well, is this true?" And he said, "Yeah, that's what everybody's doing, and we're going to be right there, too." Andy Grove said, "Well, I want to get some of my other executives right in the room right now to talk about this." Then we went on to Microsoft and I won't bore you with the whole story but...

O'CONNELL: It's a good story though. People want to know this story.

ROBERTS: We got out there and we were going to meet with Bill Gates. Now everybody had met Bill Gates individually but never as a group, and he wasn't going to join us for a couple hours and they were giving us a series of presentations. One of the presentations was about MSN, which was a new concept. Another was about something they had just purchased called Web TV. They were telling us what data meant to them, and they also were telling us just the typical Microsoft sales pitch, all the different things they were going to do to...

O'CONNELL: Revolutionize the world.

ROBERTS: Exactly. Somewhere along the line, in walked Bill Gates. In those days, and maybe still today, he doesn't waste a whole lot of time with "Hi, how are you? How's the weather." He sort of just comes in, starts rockin' and thinking and playing with his PC, and then he just kind of out of the blue erupted, and just said, "You guys are horrible." "Well, what do you mean we're horrible?" He said, "Well, you started this thing called At Home and the people at At Home hate Microsoft, and so you hate Microsoft." We said, "Well, why do they hate Microsoft? What do you mean?" He said, "Well, they're basing it on UNIX, not on Windows." I don't think any of us, we had the heads of all the North American cable companies in the room at that moment – Rogers, Time Warner, Comcast, TCI, Cox and others – and we said, "We don't even know... none of us knew that, and we'll go home and tell them to base it on Windows if that's such a big deal. UNIX... we have no reason not to, we don't want to upset you this much." And he kind of calmed down, and then we put up our slide and showed our fiber chart, and he says the same thing as Andy Grove, "This can't be right. This is fantastic!" The whole attitude changed. Then he took us to dinner at a Seattle club and we're sitting at little tables and I happened to be at the table sitting next to him and somewhere along the line he said, "You know, I've been thinking about that chart. I've been thinking about what you guys want to do." And I said, "By the way, our stocks are at an all-time low because we're spending all this capital which is why some did and some didn't because it wasn't a sure payback." He said, "How could I help?" Being young and brash and what the heck, I said, "Well, why don't you buy 10% of everybody in the room?" as a joke. He sort of thought about it a second and said, "Well, how much would it cost?" "Five billion dollars." I had no idea where I got the number, tried to do a quick calculation, and he said, "You know, I have 10 billion in cash, I could do that." It was kind of breathtaking – Microsoft's cash position later went to 30 billion – and then on the other side one of the other cable operators who didn't really think this was such a productive discussion said, "Hey, Bill, where are you going? Tell us about one of your vacations that are always so famous and written about. What's your next vacation?" He said, "Well, funny you mention that. Tomorrow I'm being picked up by Paul Allen and we're flying to the Amazon, and we're going to look at these rare chimpanzees. We're going to stay on Paul's yacht and we have a helicopter flying us into the trees. The only way you ever see these chimps is from up in the air, they don't come down very often." The poor chimpanzees! Can you imagine, these rotors right in your face and there are these guys staring at you? Then he turned back over to me and said, "Would there be any regulatory problems?" I thought to myself, "Wow! He's actually thinking about it!" I said, "No, I think the FCC rules will be okay." I'm not sure that's the right answer, but it seemed the right answer at the time. The other guy said, "Well, tell me more about the vacation." We kept getting ping-ponged and soon the evening was over. The next morning we had a wrap-up of our Cable Labs trip. We'd been to Oracle, Intel and Microsoft on that particular trip, and John razzed me pretty hard saying, "I can't believe you were down on your knees begging Bill Gates to bail out the cable industry last night." Didn't everybody think that was a hoot? And others piled on. I called my father up and I said, 'I may have done it this time, embarrassed us. We had this great meeting with Bill Gates and I jokingly offered this..." As usual with my father, he said, "Hey, good for you. What a great idea." Got back to Philly, stewed over it all day, the next day I walked in my office – true story – there's a phone slip waiting for me from a guy named Greg Maffei from Microsoft, who wasn't even at the meeting, he said, "I'm the CFO," I called him up, and he said, "I'd like to follow-up. Bill sent me an email from the Amazon. He'd like to invest in the cable industry." I said, "Well, you know, to hell with the rest of those guys. They kind of joked with us. I'm not going to ask you to be monogamous, but if they want your money they can bug you separately. Why don't we just talk about a deal with Comcast?" 30 days later they invested a billion dollars for non-voting stock, no board seat, just to send a message that people who invested in these networks were right and were going to have a good investment prospect. They didn't really understand it until we went out to do the press conference. A writer from the Financial Times of London asked Greg – he and I were doing a joint interview at that point – "Why would Microsoft want to own cable?" He said, "Well, we're not buying Comcast," and went on to say they weren't going to own cable, but he said, "Remember when we started GUIs? GUI is a graphical user interface, and we were going from DOS to Windows and the whole thing was going to be Windows." – a lot of people said they copied Apple, but that's a different issue – "We needed to make a mouse that could really have all the features to make Windows work. We didn't make a mouse. Microsoft now makes a mouse. We can't let any piece of the equation slow down the power of our software, and the mouse was the weak link, so that's why we're in the mouse business. Well, into the home, we believe in the future there's going to be a lot of data coming in and out. If we don't have a big enough pipe, then we've got to make it happen. Our investment in Comcast here is to send a message – go ahead and build. They will come." A light bulb went off in my head. These guys are the smartest guys for a reason. The stock quadrupled. Cable broadband really got a shot in the arm even before we knew what was happening. He later went and invested 5 billion with what became AT&T Broadband. He bought into eventually with Rogers, and he partnered with Time Warner on Road Runner, so when it's all said and done they really did have a deal with the whole industry. In the long-run, now the phone companies build broadband, it's called DSL, and as the ultimate arms manufacturer, he got it going by taking sides with cable early and changing history.

O'CONNELL: That's great. That's a great story. Now we're going to go to very recent history. I think of you guys as being the most successful cable company right now in VOD. You've had tremendous success in that. Can you tell us why you're knocking that out of the ballpark?

ROBERTS: So AT&T came for sale – another long story I won't go into – we managed to purchase AT&T Broadband, and probably the single most important thing that ever happened to the company was AT&T Broadband. We tripled in size, we became a national local cable company...

O'CONNELL: And when was that?

ROBERTS: That was in 2001, 2002, maybe by the end it was 2003, but in that window we had a lot of difficulties with that with Enron and some of the other scandals happened right after we signed up, but it allowed us to become the largest cable company in the U.S. and have this wonderful footprint in 22 of the top 25 cities in America. So, Steve Burke came and we sat down one time and he said, "I've been thinking about our new position as a leader, and I've been looking at these digital boxes and what they can do," now that we've put so many digital boxes out there for other reasons – channel capacity, picture quality – "and we think we could start a VOD service, which heretofore has been primarily focused on movies on-demand, and take my experiences as an ABC executive and make it like television." Let's have sports, let's have news, let's have entertainment, let's have local, let's have kids, let's have day parts, and let's call it for lack of phrase Philly Vision, and let's dream up a way to go and have on-demand with hundreds, thousands of choices of programming, and make it free, a la the internet, with the vast preponderance of the content. And since we're the largest purchase of programming and we now think we're entitled to a big discount because we got tripled in size, the programmers really don't want to discount to us, maybe they'll give us the rights to use some of their content for on-demand and then we'll have something satellite won't have." It was a perfect play, except for the fact – what about Nielsen ratings, what about advertising dollars, I the programmer maybe don't want to give my programming, will the technology work, will the consumer use it – and we had to nurse our way through that. Other cable companies said, "We should be doing telephone. Don't worry about on-demand, there's no money in it." And we powered ahead. Last year, and maybe only our second full year, we did almost a billion and a half television shows that got viewed on-demand in just ten million homes. The average home uses over 20 to 25 times a month, and it's a new platform and we are first. That was one of the reasons... we didn't set out to be the largest; we were opportunistic in getting AT&T, but once you have that leadership position I think you really have to use it. You won't always be right, but this industry has to innovate, has to push, has to go to some place that's uncomfortable, and that's how you don't get commoditized and that's how you don't get caught.

O'CONNELL: You just split Adelphia with Time Warner.

ROBERTS: Yes.

O'CONNELL: How do you take those Adelphia systems and make them Comcast? What are you going to do so that they represent you as the local/national corporation?

ROBERTS: That is a business that we've been in for a long time as we've been buying other cable companies. It really clicked into focus when we bought Media One and AT&T in a very short period of time because again, Steve came one time and said, "Here's a shocking statistic. Two out of every three people that work for Comcast didn't work here 24 months ago." So the stories of Tupelo and Ralph and the good old days, they don't even know what you're talking about, and that's because we had just done so many deals and gotten so much larger so much faster. So we decided – again, I give all the credit to Steve, and at the time I was very skeptical – that we should create a Comcast University and take a play out of GE and a little bit out of Disney where all the executives have to go train at the theme park and you have to be a character. He had to do that when he worked for Disney. Then GE has their Connecticut training facility, which is world famous. So we set up Comcast University and we created a program called Spirit of Comcast and we brought in every supervisor and manager from an acquired system over a very short period of time, only 30 or 40 at a time, they stay here for three days and they hear from my dad, they hear from Steve, they hear from Julian, and Larry Smith and John Alchin and David Cohen, and Brian, and whomever is in town, with no script and we just go in and we talk about how we got here, others will take about our vision, and you just take questions, and then we sprinkle it with real presentations like here's the plan this year. We've now had over 3,000 managers all spend time with Ralph and understand the entrepreneurial integrity, the culture, the things that matter most at Comcast. We also take our act on the road. We went to every major market that we bought in AT&T and we will do the same, I'm sure, with Adelphia, and we will get all the employees to stop working that day, we'll shut the business down for several hours, we'll have a skeletal crew, install no new jobs – it's terrible. In Chicago we had 5,000 people in the McCormick Center when we bought AT&T Chicago, and we come out and we have a whole presentation about why this is the last cable company you're going to work for, why we don't sell systems, why this is the most important business, and here are our plans and our dreams and our aspirations, and every employee can say, "I was in a room with the company." Steve's introduction of my dad always chokes me up, which is he says, "I worked for the Walt Disney Company for 12 years. What I wouldn't have done to spend 20 minutes with Walt Disney. You're about to spend 20 minutes with Ralph Roberts who founded Comcast and you're going to remember this moment." My father will come out, and no disrespect to Ralph, he'll babble away and talk about something that doesn't matter, but you could hear a pin drop – it matters that much. He sets the tone not on cash flow and 12% versus 11%; he talks about family, what matters, your career, your co-workers, respect – and that's why this company's about.

O'CONNELL: That's great. One of the things that you're also about that I'm particularly impressed by is your leadership in diversity. I know that you personally have been honored by NAMIC and by other organizations. I don't think any company does it better than Comcast. Can you talk a little bit about your commitment to that and why it's important?

ROBERTS: Yeah, first of all, I'm not sure there aren't companies that do better. I'm never satisfied. I think we have set it as a goal to look like our customers and that the company's leadership top to bottom should stress that and value that, and that's not easy. Again, when we hired David Cohen and we hired Steve and people who had worked in large – in David's case for the City of Philadelphia – very diverse organizations, we asked how can this company be better? We've got some executive leadership programs that are fantastic, we have some outreach programs with partners to help recruit folks to the company, to talk about our products to people that are sensitive to what the channels are that we carry. Diversity is a very broad category that I don't think you ever stop, but it's a business... not a social objective, it's a business objective. It's the right way our company should run and then it has tremendous social benefits. I'm not satisfied that we're there. I don't think there is a there, but we have interestingly two white males in David and Steve who when I hired them each at the last interview I said, "Here's something I hope you will do better than I've done and help us advance this company to a better place," and they both have done great and we have some stars in the company and hopefully more in the future.

O'CONNELL: Can you tell us a little bit about Comcast Cares Day?

ROBERTS: That is an area I'm very proud of. It was an idea of a woman in Philadelphia who started something called Philly Cares, and it's a day of service for the Philadelphia community to go help local organizations. Diane Tuppeny-Hess, and others at Comcast, latched on to it and said, "Why don't we turn that into Comcast Cares Day?" And then it just spiraled. We, last year, had I believe 30,000 volunteers in our company and their families go to 300 or so community projects picked by the local managers, so some were Boys' and Girls' Clubs, others were high schools, others will be a tech center, a rec center, a police athletic league, and go in and volunteer our time – paint, wire, clean up, garden, whatever it takes – on a Saturday in October. We then decide to fan the executives out to as many locations as possible. So I'll hit three or four in a day. I always bring one of my kids if I can; Steve does the same, David, my dad, and John Alchin and Larry. We've been all over the country. Then we have something called Comcast Foundation, and for every employee who works, we stipulate so much money from the foundation to go to that organization. So at the end of cleaning up an unknowing school, or wherever we're at, the local manager says, "And oh, by the way, from the Comcast Foundation here's a check for $25,000 from all of us on behalf of the company." There are incredible reactions. I don't know that there's a larger day of service by any corporation in America. It is not required, it's totally voluntary, and every year it gets bigger. It's fantastic.

O'CONNELL: I see it all over because I'm in that corporate outreach work, and I've been so impressed with the way you've worked with the local systems to choose the areas that they touch and it's so effective.

ROBERTS: I was in Nashville and Knoxville, Tennessee last year, and I was at a Boys' and Girls' Club that hadn't been touched in 30 years. It was gross and it got fixed up, not completely in one day for sure, but then plus the money we donated, plus the visibility in the community because we try to promote the fact that this organization is doing something and other people will join in. A secondary benefit, but an unspoken huge benefit is that Comcast employees say this is the kind of company I want to work for.

O'CONNELL: It helps with employee retention, I think.

ROBERTS: Everybody feels good. This is our family and you want the family to stand for something and do something. So not a from-the-top initiative and we literally have fun dreaming up the t-shirt every year that we give everybody, and my daughter one year, who came with me, said, "You ought to make it like a rock tour. You ought to list all the cities." Lo and behold, when you look at it and we list all the cities, you can't even fit it on one t-shirt. It's incredible how many places get touched.

O'CONNELL: Innovation and Comcast – they seem to go together. When you're looking out in the future for the next five years, where do you see the places that Comcast is going to be investing in for innovation?

ROBERTS: The first thing is to give you my point of view on how you try to manage a company on that question because that's a really tough one. I don't believe we should try to bet on one or two horses and hope they hit, and oops! – we missed. The consumer really wants this, and we went there, and so we have to make sure we're flexible, fast, and not so in love with any one idea that it prejudices us from seeing the great ideas. I think certain trends are clear. We like to call it viewer controlled television. We're clearly in an era where the consumer's in control. I now can get my money out of the bank right now, at midnight, take my little card; I can get something to your house tomorrow with Federal Express. I want fast, I want to be empowered, and so speed, ubiquity, wireless, coupled with which screen doesn't matter – I maybe want to watch it on my big TV but I also may want to watch it on my cell phone. I'm not sure but clearly something's getting consumed more than just a phone call on those wireless devices. Kids love games; we have a generational shift where television was it for our generation but video games, internet, cell phone, text messaging is it for the next generation, and who knows what's coming next behind that? So what have you got to do? Well, you have to make sure you have the best network, you have to make sure that you are first, and we're trying to do all of that. We think in video you're going to be able to get what you want when you want it, and the content companies that figure that out faster I think are going to do better, how to preserve their business model... A very good parallel to that would be to look back when cable programming took off and how some broadcasters said, "Hell, no. I'm not going to do a news channel. Why would I want somebody to leave the CBS Evening News and go watch CNN?" An entrepreneur came along and said, "I don't have that legacy baggage." And I always refer to it as the burden of incumbency, you're trying to grow 5, 10, 20 percent on top of what you already got and some new entrepreneur says, "I just want to disrupt." So we had this in cable where all the best channels were funded by entrepreneurs, later bought up by the big broadcasters, and so we now have the same thing with on-demand. Some people say, "Well, I don't want to take the viewing away from my primary business." That's too late. That's going to happen in our opinion. You have a DVR, TiVo, you can get what you want when you want it with piece of consumer electronics, so why not make it easier for the consumer. In the broadband space we're going about 6-8 megabits a second. As we talk today, we have a project at Cable Labs to go to 100-200 megabits a second. IBM demonstrated to me 15 years ago a billion bits a second. We're in the 2nd inning. The telephone business... today we're having incredible success right this moment. It's the best thing going at Comcast. We're selling 30,000-35,000 a week.

O'CONNELL: And some of that's to people who don't get cable.

ROBERTS: Yes, and who only want our broadband, don't even want the video either. They'll take the new stuff but not the old. And others who want to take triple-play. Well, that's just plain old phone right now, but phone is moving and one of the things we're investing in is cross-platform. So when I'm watching TV and get a phone call, okay, I want to know, caller ID, do I want to pause the channel and take the call or send it right to my voicemail. Once it goes to my voicemail can I access that on my Blackberry? Can I access that on my email? Can I access that on my cell phone? Do I have two different voicemails or do I have one? Can I chat while I'm watching TV, while I'm watching an Eagles game, with my buddy in Boston as they're playing the Patriots? Can I do that on a wireless device as one person's on a television? Who knows? All those things we're working on. But you need to remind oneself that maybe the greatest invention in the last 25 years could be a company, Google. Google's never run an ad for Google, and Google, if I said to your viewer, "Raise your hand if you've used Google," I bet 100% of the people watching and at every management meeting I have when I ask this question, every hand goes up. Think of a product that came that fast that is that impactful that's never run an ad, and you realize today the best, right this moment, growing product on the internet is something called MySpace. It didn't exist three years ago. So the pace of change and technological innovation has so accelerated to an unprecedented level that no one has ever witnessed before that to answer that question is frightening. It's also an opportunity. We probably make more money, actual cash flow, off the internet than almost any company in America by delivering the best experience to the consumer. We have 10 million people who pay us $40 a month. So my first answer is make sure we remain the best.

O'CONNELL: Well, that's a good answer. With all this new technology, it also means new content is coming into the home, and that has raised a lot of issues about decency and indecency standards. I know that you've worked and been very active as a spokesperson for our industry on the Hill about indecency regulation. Can you talk a little bit about that?

ROBERTS: I put two hats on. One hat is the chairman of NCTA right now, and having to think through and articulate the industry view, but probably my more important hat is as a parent. I've got three teenage kids and we worry about this, my wife and I, a lot. I've come down very strongly that having the government fix the problem is not the answer. I just think you can start and stop with that can't be a good thing. And yet, it's disturbing to say there's nothing we can do about it and it's just a race to the bottom and there is no standard in our country. And so we have hopes... My first answer is technology to the rescue and let parents parent. There are many, many people you will meet who say, "I don't mind this for my children, and I don't care what they watch, or I only care if it's this type of programming." And then there's others who say, "My child's not developmentally ready to be exposed to such programming and I want to make those decisions but I need the tools. I need to know what's coming on before it comes on, I need to be able to push a button and make it go away." Then there's other that say, "That's impossible. I'm incapable of managing it. It's too stressful in the house." Any parent knows, who has to turn something off, how hard that is. Just don't even put it there in the first place. And so that's the conversation that's going on. I think Comcast should play a leading role in the cable industry in trying to manage that, but I'm a big believer in free speech even when it's uncomfortable, and I think that's where we ultimately come down. So we're trying to create family tiers that don't disrupt the experience for the programmer economics of this whole industry. We're trying to give everybody a free digital box that wants it to easily in one click program it out of your house without a password. And we look at AOL, and AOL today is coming down the mountain, but when it was going up the mountain, in my house and therefore I'm pretty sure in many households, their parental controls were one of the reasons parents wanted AOL instead of just getting "the internet". There were many controls, they worked pretty well, and you at least had some policing of what content was streaming into your kids' computer. I think the cable industry has the opportunity to take this issue, turn it on its head, and actually come out the other side as part of the solution, not part of the problem.

O'CONNELL: That's an interesting point. I hope that you're right because I think it's a very important issue, and if we can show people how to take control for themselves... It's not much of an effort to click a button on your remote.

ROBERTS: There has to be a better answer than saying, "Okay, you can't say this word at this hour." Some of that has been the root of television and there's nothing wrong, but I think to change and go further and to radically now apply that to the cable industry... there has to be a better answer.

O'CONNELL: I'm going to now wrap up with some questions that are more personal about leadership and big picture and something about you. How would you define your management style?

ROBERTS: Well, if I were to ask the people that work for me to answer that question, they might say chaotic, disorganized, but hopefully there's some method to the madness. A couple of things have struck me on management. One was a book I read called The 60-Second Manager that said if you walk into somebody's office and you see boxes and streams of paper, something's wrong with that person's management style. I pride myself on it always being empty and clean, meaning I've pushed it somewhere else. So I think that you let others do the work and you try to be there to be a resource to help. The best at that is my father, in my opinion. He nurtures, he mentors, he coaches, and he doesn't know any of those words, but he just does those things instinctively, not just for me but for others. I took the view I'm too young to be old. Certainly 15 years ago I was thinking that way, and therefore I'm not ready to just be a coach. I also want to do, and I still feel that way, so I like to take a few projects unto myself and say, okay, I've got that ball and I still want to run the play once in a while. But I don't want to do that for everything, and I think that that's the real issue for management styles going amok are you're either too removed or you're too involved, and so you've got to find the balance. I don't want to appear to abdicate, but I've got partners who are better than I am at what they do and what we do in their area. So I try to also have a collaborative style. One of the things that I am always amazed in reading articles about some companies that say, well, they did a big deal and only three people knew it – we have managed here and I hope we will always be able to, to not have a lot of leaks and therefore we have a very inclusive style. My father started a tradition which I have sort of taken to a ridiculous extreme, but we don't make too many decisions without passing out a little piece of paper and everyone getting a blind vote. "Should we bid for Disney", "Should we bid for AT&T," "Should we try to buy the Flyers," "Should we do Adelphia this way or that way," and we'll have 15 people in the room at that moment, all of whom have a chance to say, "Dumb idea," and you don't know where it came from. It's kind of the culture, which is inclusiveness. We use voicemail excessively. I'm always amazed when companies say, "We don't really use voicemail. Why do you need voicemail, we've got email?" Well, a lot of people will talk but they don't talk in a large group and it's actually worked for us to say, "Okay, I don't want to bother you on the weekend, but I need to know what you think. So when you've got a few minutes on the weekend, reply to the voicemail rather than us agree to 10:00 Saturday we're having a conference call." "Well, that's just when my kid's swim meet is." So we've tried to work very hard but do it in a way that's inclusive, collaborative, but give a lot of individuality, and that's a hard thing to get right.

O'CONNELL: Well, you've done something right by building a good team. When you're hiring people to work on that team, what are you looking for? What are the attributes that you select?

ROBERTS: So you've got a fine line. On the one hand, you don't want to surround yourself with people who all say yes, and on the other hand, if everybody's their own island and ego, it's not going to work. We've had our hits and misses like everybody else, but for the most part it's someone who says, "I want to be part of a family and a company that wants to be professionally managed but has the good of family without the controlling, over-protectiveness of one person making all the decisions." There's no magic formula. We just take our best gut instincts. I think we are fortunate that we've got some strong leaders and they're not uncomfortable... I'll give you a great example. David Cohen, who was chairman of the fastest growing law firm in Philadelphia and was the managing director of the city, and who in his own right could run any institution in this city – Steve Burke came to me after AT&T before we closed and said, "We've got problems in River City here. We are now the biggest company and every other day there's a crisis. We are out from under a rock; people have found their way to Comcast and everybody wants something from us. We need somebody to help manage that. You need somebody, and I think you should hire David." I said, "Well, he'll never take it. Why would he give up being at the biggest law firm in Philadelphia?" Steve said, "Why don't I go try?" He recruited David to Comcast – I said at some point, "Let me take it from here." – but he said, "That person should report to you, Brian, that job." And you could argue very rarely would you want to attract a superstar executive to a company and have him report to your boss. That might create issues. That's the kind of selfless... Larry Smith has been co-chief financial officer for 15 years. When we recruited Larry, the deal was he would become CFO after legendary Julian Brodsky. Then, six months later, our treasurer, Vern Gallagher, was recruited to be head of Century Cable, and so we needed to get a new treasurer. We interviewed a nice Australian banker working for Toronto Dominion named John Alchin. John said, "Do you think there's any chance I could someday become CFO?" Now we'd already just promised it six months earlier to Larry, so I went to see Larry and said, "What do you think of John?" He said, "Oh, I think he'd be great." I said, "Well, his only issue is could he someday be CFO." He said, "I could care less about titles. Who cares? He's good at what he does; I don't want to do what he does. Why don't we be co?" And for 15 years, I don't know of any other public company that has had co-CFOs and it's incredible how well it's worked. So that is what I look for, people who say I want to help the team, and it goes back to literally my very first day in Trenton. Bill Getz was the controller and he was training me, and we were two of three college graduates working for our system, and we had about 50 employees. That day, remember we were just starting, a truck pulled up with 2,000 converter boxes, or whatever, some large amount of boxes which way a lot, and we didn't have a warehouse facility with little lifting trucks. We went the old-fashioned way; we got a human assembly line, everybody went to the warehouse, you'd take off your jacket and tie and get the box, you'd pass it off to the next person – you unload the truck.

O'CONNELL: And you were there unloading the truck.

ROBERTS: And Bill said, "This is how it works, and if you're not into this... this is how we do it." It was great! I came from playing on a squash team in college; that's what I went to college for, and my team was the experience. So I just think that that is the mentality... there are two types of people in the world: those who say, wait a minute, that's not my job; and those who say I'll do whatever I need to do to help, and we've been very lucky to have many, many great people that take that right attitude.

O'CONNELL: That's a great example. I'm going to talk a little bit about legacies. The Cable Center asked me to ask you that, but I'm kind of wondering, do you think about your personal legacy? You seem sort of young to be thinking about legacy.

ROBERTS: Exactly. I don't want to be in Hall of Fames or museums.

O'CONNELL: But you are! You're going to be in the Hall of Fame.

ROBERTS: I'm 47 years old. Hopefully Comcast can be a company that helps change the world for the better and bring some entertainment and some fun, and at the same time now some information and some better use of technology, but also help the communities. If you said pick a couple things – we didn't plan it, but Comcast Cares Day is right up there, or my own family, trying to raise my kids the same way that my father raised our family with a balance that it's not just about the business. It's harder the bigger the business becomes, but be there for dinner.

O'CONNELL: Do any of your three children have the type of business commitment that you had when you were a teenager?

ROBERTS: I've been able to duck that question. My first one is going to college next week – it's a big milestone in our family.

O'CONNELL: Where is he or she going?

ROBERTS: She's going to Brown. They're all interested at some level in what's happening, but they are out pursuing their path in life and I want them to not feel the pressure to feel they have to to get my blessing.

O'CONNELL: Although in your case, it doesn't sound like you felt pressure. It sounded like it's what you wanted to do.

ROBERTS: That's true for me and true for my father, but for most people it's natural to say come join me, or something. I don't want them to feel that's what they have to do because I did it for my father and they should do it for me. On the other hand, they've all come on Comcast Cares Day; I think we have an opportunity whether it's inside the company or outside the company to take advantage of some of the blessings we've got and make sure you have your priorities right in life. At the same time, they're kids and they should have fun.

O'CONNELL: Do you play squash with them?

ROBERTS: Sure, and they're all active in the game. My daughter is going to hopefully play on the Brown team and I'm very excited about that. As crazy as it sounds, it's not because I played squash. Certainly I'm familiar with the game, but it was a very popular sport, five minutes from our house there's a very popular kids' program and they all liked it.

O'CONNELL: That's fun. Well, it's fast. It's almost like a video game when you think about it. Your reflexes have to be really in-sync with that ball. That little black ball! It hits you right in the head if you're not watching.

ROBERTS: I've had that!

O'CONNELL: I actually ride the train – I commute from Long Island – and two of the guys on my train are squash players, and I told them what I was doing and they went, "Great squash player!" They're good players, too. I think one of them's played you. Do you have time to do anything like watch TV? Are you a consumer at all of your... well, obviously you're going to consume your phone, you're going to be a consumer for the broadband, but what about television?

ROBERTS: Like probably a lot of people, you go up and down in your viewing hours based on what's going on in the rest of your life, but I'm not addicted. There are television-free periods and every once in a while my kids' teachers will say, "We're having no TV week. Is that okay?" And I'm like, "Of course it's okay!" I like to get that TV turned off at my house occasionally, too. I see a lot of different shows – my wife's a big fan of broadcast television and it's taken me a long time to actually like a few shows on broadcast. I've always been more of a cable fan – really, really. I was a QVC watcher – people were shocked by that – partially because it was the business but also because I bought some fantastic products on QVC. I have dropped my viewing since we aren't involved as much. The Golf Channel is fun to watch; I'm not saying this because you're here, but A&E and History Channel; Discovery, but I also like the news. I watch a lot of CNN and others.

O'CONNELL: Are you a sports... Do you watch sports?

ROBERTS: A fair amount of sports. Actually I like ESPN, but also like the regional sports and that's one of the reasons we're going into the business, is it's just passion of your local team and that's one of the beauties of that business. But really, generally we watch a lot of VH1, E!... I don't want to say – somebody will be mad at me whatever I answer to that question. It's very general.

O'CONNELL Is there anything you'd like that I haven't touched on that you'd like to mention so people will know about it?

ROBERTS: I hope we can continue to attract people to the industry. I think one of the goals that I have is that you don't look at the good old days and say well, that was it and now we're just here. What's so stimulating is the things we're working on today we didn't even think about five years ago. I don't think there's been a more intellectually stimulating time to be in business than right now. The pace of change, the ability to harness technology, to work remotely and collaborate not just in one city – it's an amazing time.

O'CONNELL: I'm Dr. Libby O'Connell. I'm here interviewing Brian Roberts, Chairman and CEO of Comcast Corporation. It's August 24, 2006 and this is for The Cable Center Oral History Program. Thanks Brian. I've enjoyed talking to you.

ROBERTS: Thank you. It was fun.

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James O. Robbins

robbinsJames5

Interview Date: Tuesday August 08, 2000
Interview Location: Atlanta, GA
Interviewer: Jim Keller
Collection: Hauser Collection

 

 

KELLER: This is the oral history of James O. Robbins, President and CEO of Cox Communications, a Cox Enterprise Company. Jim is the immediate past chairman of the NCTA and also served a first term as president in 1991 and '92. Jim is also on the executive committee of C-SPAN and is chairman of Cable in the Classroom. This oral history is brought to you by a grant from the Gustave Hauser Foundation as part of the oral history program of The National Cable Television Center and Museum. The date is August 8, 2000. The interviewer is Jim Keller. Jim, tell us a little bit about your background prior to the time you got in cable.

ROBBINS: Jim, good afternoon, first of all, and thank you for coming to Atlanta to do this.

KELLER: Our pleasure.

ROBBINS: Ever since I was in college, maybe even high school, I was fascinated with the media and I really thought I wanted to be the next Walter Cronkite and in college and in high school, I was playing sports, not reporting sports, and so I didn't get a lot of experience as a reporter and after college I went immediately into the Navy. I was in the NROTC program and after my first tour of duty in Vietnam, I had a chance to either get out of the Navy with a two year Navy contract program or re-up and maybe learn something about the press. And I actually decided to re-up in the Navy, go for another tour of duty in Vietnam and in that tour became a public affairs specialist with an outfit called the Mobile Riverine Force.

KELLER: Batton River?

ROBBINS: On the Mekong River. I spent all of 1967 on the Mekong River. But while I was in the Navy on my destroyer operating in Vietnam, I used to rip and read the news over the ship's one MC every night and that just got me more interested in this business called television news.

KELLER: You became a ham, huh?

ROBBINS: I became a ham. Anyway, I got out of the Navy, worked for a guy who was running for Congress as his press secretary, more sort of in the media, and then one day when I was about to go for a final interview in Tulsa, Oklahoma, I got accepted at a business school up on the East Coast that I thought long term would probably serve me better and open a few more doors than chasing ambulances in Tulsa. So I wound up at Harvard. The summer between my first and second year at business school, I went to work at a television station called WBZ and I worked on a show, it was a news magazine show from 9 to 10 in the morning called New England Today. It was a sequel to the Today Show, and as happenstance would have it, the guy that I was working for had a child who was sick that summer, so I wound up doing a lot of the programming. They though enough of me to ask me to stay on after graduation and I said, "Well, I want to go down to the newsroom because that's really where I want to be." And so I went down there as managing editor – assistant managing editor and then took over when my boss was let go and was managing editor of television news always wanting to go on the air and they said to me, "Look, this is the fifth market in the country, Jim. You're nuts. You want to go on the air, go on up to Burlington, Vermont or Lebanon, New Hampshire or something like that, a little small market and maybe you can do the weather on weekends to get started." Well, that didn't make a lot of sense to me and I was chasing my then girlfriend and now wife of almost 30 years, so we stayed in Boston and I started about a year later looking around at how I could combine my interest in television with an academic background in small business, really, and wound up going to work in June of 1972 for a company called Adams Russell. They had a subsidiary called the Montechusetts Cable Television Company, or something like that. Anyway, I became General Manger of Fitchburg, Leominster and Gardner, Massachusetts and that was my first job in the cable business and I must say, it's been a blast ever since.

KELLER: Once you start you never get off that horse, do you?

ROBBINS: Well, it's been a hell of a horse to ride.

KELLER: It really has been for all of us.

ROBBINS: We've had tremendous fun.

KELLER: So after you got into it, then, with both WBKZ, or W...

ROBBINS: WBZ, it was a Westinghouse station.

KELLER: Was there an affiliate, a national affiliation?

ROBBINS: They were affiliated with NBC.

KELLER: Then you went with Adams Russell. What happened after that?

ROBBINS: After Adams Russell, I was there for a year and half and then went to work for Continental Cable Vision, worked for Bus Hostetter and Irv Grousbeck out in Ohio. Our first child went to Ohio with us and we had two more children in Ohio and that was a wonderful place to bring up children. I was building and franchising and doing all of that stuff in those days and did the Dayton donut, all around Dayton and had a great time, worked for a great company. I really learned the business there over a five or six year period.

KELLER: It's a great company to learn the business from.

ROBBINS: It was a terrific company to learn the business from and Bud Hostetter remains a good friend today.

KELLER: And then you went out to the West Coast, didn't you?

ROBBINS: No, then I had a chance, they wanted me to move to St. Louis and I was from the East Coast, my wife was from Boston and I was from New York and I wanted to maybe go further East and I had a chance to go run cable in the eastern half of Long Island. It was a little bit of a turning point for me in that in Ohio I was managing a collection of small systems that totaled maybe 100,000 customers at that point. I had a chance to go to Long Island and run one big system that had 75,000 customers or something like that and I thought, well, that's a different experience than running a region of smaller systems.

KELLER: This was '72?

ROBBINS: This was actually in '79 and so I thought that would be another thing I ought to check off in my reservoir of experience, running a big system, and that turned out to be fortuitous. It was a different kind of challenge.

KELLER: What were the differences in the challenge between operating numerous small systems and one big one?

ROBBINS: Well, in running numerous small systems you relied on the managers of the small systems and you went and you counseled them and you coached them and you worked with them and you helped them in their franchising if they needed it.

KELLER: Like you're doing now.

ROBBINS: Yeah, and it was working through generalists like yourself. When you went to one big system, it was more like what I'm doing now and that is I've got a chief engineer, I've got a chief development person, I've got an operations person, so I'm dealing here with a collection of specialists, just the way I did when I was running eastern Long Island and they'd each bring their point of view to the table on whatever the issue was and then ultimately I had to decide between shades of gray and that was a very different experience.

KELLER: That was with Viacom?

ROBBINS: I'm sorry, that was with Viacom, yeah. There I was hired by John Goddard – no, I was hired by Chris Derrick and then he left and John took over and John wanted a guy in New York and anyway, he hired a fellow by the name of Ed Bennett.

KELLER: I know him.

ROBBINS: I wound up working for Ed and I don't think Ed had ever been in cable operations before and we worked fine even though this was sort of a strange mix of the way people had come together.

KELLER: What was your graduate school major?

ROBBINS: I majored in – at Harvard you didn't have any majors.

KELLER: Yes, you specialized in...

ROBBINS: If I concentrated anywhere, I concentrated either in marketing or in small business. I really thought I was going to be sweeping the sidewalks of the leaves and shoveling the snow in the winter in front of a small business where I could mind my own business and not worry. I never, ever, ever in my life thought I'd be involved in a big corporation.

KELLER: Well, apparently it's been right for you.

ROBBINS: It's worked and we've had a lot of fun and most of it is because of great people.

KELLER: That's the key to everything.

ROBBINS: I really think it is and it's been the key to my career since Adams Russell, I'll tell you that.

KELLER: It's interesting that Cox, primarily at that time, was a print oriented company in the newspaper business. They did get into the television station business and I got the history of Leonard Reinsch and getting into cable television and being the motivator of Cox getting into cable television, but it's always been amazing to me that this old conservative first line print company ever got into cable television. How do you read that?

ROBBINS: Well, the history of the company is such, Jim, that if you follow it it's a 102 year old company today and we've never been afraid to get into new technologies. Yes, we were a print company but in 1922 we got into the radio business and then we got into the television business, I can't tell you when, and then we got into the cable business. At one point, Cox Communications, or Cox Cable was a subsidiary of Cox Broadcasting.

KELLER: I remember that very well.

ROBBINS: Anyway, the company and the family has never been afraid of going into new technologies. We were in the cellular business for a while and made a decision that we couldn't be a big enough player in it so we got out of that but we were in the PCS business early on because we thought it was a way to leverage our platform. So, this is a thread that I think Leonard carried forward with great aplomb. Try new technologies; don't be afraid to try new technologies. The pie gets bigger every time one of these technologies evolves. It's not a share shift.

KELLER: Once you came over, you followed Jim Wright, didn't you?

ROBBINS: I actually followed David Van Valkenburg.

KELLER: Was he President of Cox? I wasn't aware of that.

ROBBINS: Yes. When I came here, in fact I had a couple of interviews with Bob Wright, they wanted me to go run a company called an S TV operation in St. Louis and I said I thought that was a lousy technology and a lousy business and thanks but no thanks, I had no interest in doing that. That was my first kind of foray with Cox and then they came back again and they said, "Jeez, you made a wise decision that made a lot of sense. Would you be interested in doing this?" And I didn't get that job. I was being pursued for one of the operating jobs here and then lo and behold, they came back later and said, "Look, you live up in New York. We've got a half a franchise in Staten Island and we've got a management services contract with Percy Sutton for Queens, half of Queens, and we need somebody who knows about New York City to do this." In fact, David Van Valkenburg, who's not normally a very colorful guy in terms of language said, "Jim, I feel like a virgin in a whorehouse in New York City." And so anyway, that's how I joined Cox in 1983 as the manager of their interests up in New York City.

KELLER: You needed a Jack Gault in New York.

ROBBINS: Well, what I did was we worked through lots of things but I came to pick up Peter Gilbert as our partner. Continental had the other half of Staten Island. It was a great market, huge density, 80+% owner occupied housing, I mean a fabulous market.

KELLER: Peter Gilbert was a character himself, wasn't he?

ROBBINS: Peter Gilbert – I had run eastern Long Island, which he had originally built and then sold to Viacom, so I knew the legend of Peter Gilbert through a lot of stories there and he was a great guy. Anyway, I found him and I said, "Peter, you're the guy for this." And he stepped into Continental's shoes and he ran the project and we had a terrific relationship.

KELLER: Did he have an equity interest in it?

ROBBINS: Oh, he had a big equity interest in it.

KELLER: Oh, he kept it then when...?

ROBBINS: Yes, he stepped into Continental's shoes.

KELLER: And he ran it then for Continental?

ROBBINS: Right. He was a half owner and ran it and we were thrilled and everybody made a lot of money on that project and he was terrific. He's a guy that's no longer with us...

KELLER: Unfortunately.

ROBBINS: ...today, but a great guy.

KELLER: And how! I can remember great meetings with him.

ROBBINS: And a real entrepreneur and if you needed to figure out how to get things done without going through all the paperwork and crap that the bureaucracy in New York City would put you through, Peter Gilbert was just the guy for that job.

KELLER: You know, it's interesting that you came into Cox from the operating side and then advanced to the Presidency through the operating side. That is rather unusual in cable television. Most operating people don't make it to presidencies in large companies.

ROBBINS: You know, that's ironic...

KELLER: I always thought it was.

ROBBINS: Well, it's ironic that you say that because here at Cox, historically, the leadership of the company has risen up through the operating ranks. That's been true on the newspaper side, that's true in the automobile auction business, it's true on the radio side, the television side, it's true throughout Cox.

KELLER: I think it's great.

ROBBINS: And we think of ourselves as a pretty good operating company although there's nothing to say that somebody with a finance background or marketing background or some other kind of background couldn't run... What you're really referring to is most of the other guys in the business came up through the financial ranks.

KELLER: Financial, yes. Virtually so. One way or the other.

ROBBINS: Yeah.

KELLER: Very few from the management side. There are a couple of exceptions, Joslin is one of them. Ray Joslin is one that came up through the operating side, but not too many. John Goddard came up through the operating side, but I can't think of too many. But when you think of Cox, I think you think of three primary attributes: excellent management, great customer service, and an involvement in community service. I think those are the three characteristics of Cox. Would you agree with that?

ROBBINS: Yes, and I would tell you that I think we are distinguished above all others in the customer service area.

KELLER: No doubt.

ROBBINS: Let me tell you a couple of things though, as we're talking here Jim. When I was at Continental, I really thought I learned a lot about this business and I've done two things differently here than were being done at Continental and I think they were to some extent the sign of the times and they were good decisions. Number one, I centralized early on the IT business because I felt that increasingly the...

KELLER: IT being?

ROBBINS: The information systems, the information technology.

KELLER: MIS.

ROBBINS: MIS platform. When I first came here we were in a quandary as to whether we should be decentralized or centralized and we went decentralized early on.

KELLER: You went back on your experience with Continental then, from an operating standpoint.

ROBBINS: I did and the decision there was to give as much control to the local operating managers as we possibly could.

KELLER: There would have to be certain exceptions, I think. Finance would be one.

ROBBINS: Yeah, oh sure. Your P & L and all of that.

KELLER: What would be the other exceptions?

ROBBINS: That's one. I think increasingly we felt that service call reporting needed that kind of attention, but what happened is we began to get one off kinds of applications and numbers were coming in a little bit different. We were a private company at that point so it didn't really matter a whole lot, but into the '90s it became increasingly clear to me that as we were going to add new services and trans-standardize some of these things, we needed to bring that function into Atlanta. We did that.

KELLER: Customer service?

ROBBINS: No, the IT platform. We did that and there was some strain and there was some pain and there was a lot of gnashing of teeth on the parts of the general managers who felt they were sort of losing control of their life, but in fact, I think the last half of the '90s when we've offered all these new products and services has borne out the theory that you've got to have a centralized technical platform and an information systems platform from which to drive the business. There are companies today that cannot put out one bill for voice, video, and data and it's a critically important issue. The other issue...

KELLER: But originally did you use it for reporting purposes?

ROBBINS: Oh, yes.

KELLER: That was the original purpose of it?

ROBBINS: Oh sure, oh yeah, and we also used it so that our customer service reps could know what was going on with each customer, but the whole level of sophistication in MIS, as you call it, has increased remarkably and that was a departure from what Continental did. The other departure was to set a national technical platform and I really credit two things. My own fear and ineptness in knowing anything about engineering and Alex Best's wonderful presence here with our company. He came from Scientific-Atlanta and when he got here he saw lots of different platforms out there and lots of different things going on and over time we really standardized, we set technical standards from Atlanta for all of our systems and that doesn't necessarily mean that one size fits all. Some systems it was appropriate to have 450 technologies, others 550 or 750 later on. But it was a departure from Continental where each of their seven regions, when I was with the company, they did their own thing and yeah, the regional people talked but there was no formal structure of what they did and one guy might like Jerrold and the other guy might like SA and so forth and so on. I think that helped Cox a lot.

KELLER: Did you standardize on then one manufacturer?

ROBBINS: No, we stayed with two manufacturers because we always felt that two sources of supply were obviously better than one, but standardizing the technical platform, I think, really helped us a lot and I know it's helped me as a manager and a CEO that I could turn to Alex and he knew exactly what was going on with our platform. So those two things were important.

KELLER: The technical aspect goes way back to Lew Davenport and some of the other people in the very early days when they were directing the engineering for Cox.

ROBBINS: Yes, and we had a technical... I mean, when I first came here one of my not so nice jobs was we had 40 or 50 white coated engineers in a laboratory downstairs and I said, "No, let the manufacturers do the R & D work. We don't need to do the R & D work; we're an operating company." And that turned out to be hard but...

KELLER: Did these white coats ever produce anything of value?

ROBBINS: No. They produced a converter at one point that turned out to be... I don't know what the devil... We called it the Cox 1000 and I think that they're probably a museum piece today and I hope the cable museum's got one.

KELLER: I've never seen one. The Cox 1000?

ROBBINS: Yeah, yeah.

KELLER: Converter, huh?

ROBBINS: Yeah.

KELLER: And that was all they produced?

ROBBINS: That was all. It didn't make any sense to have them here at all.

KELLER: It's the only company I know that had such a thing. Well, of course Cox has always been unusual in a lot of respects.

ROBBINS: That one was strange.

KELLER: Now, the centralization, excuse me, the centralization led to your current NOC, the National Operating... what do you call it? The National Operations Center?

ROBBINS: NOC, yes. But that really came about as a result of being in the telephone business.

KELLER: That's another subject I want to get into.

ROBBINS: That didn't really have anything to do with a standard engineering platform.

KELLER: But you said you wanted to get a handle on customer service at one time.

ROBBINS: Yes, let me tell you how that evolved. It was really in the late '80s that we had some employee opinion surveys and there was some anecdotal information from those surveys that said some of our employees felt we were not doing as good a job serving our customer as we could have. Well, for any CEO to hear that, that's an indictment of a CEO's leadership.

KELLER: Except... there have been exceptions in the industry and I won't name them but there have been exceptions.

ROBBINS: Well, you and I know there are a lot of them. We had a very simple attitude on this thing. We knew, Jim, that longer term there was going to be competition and the best defense against the incursions of competition were one, a real satisfied customer, which means we had to put our customer service in shape, and two, channel capacity to match or exceed what the satellite offered. So, really at the end of the '80s we said customer service is important and channel capacity is important and we drove down that path really for five or six years and of course it's the foundation of what we're up to today. I don't know that our technical platform is a whole lot different than anybody else's, but I do think the value system that we have about customer service is more important today than ever because if you're not a happy customer today you're never going to try telephone or high-speed Internet access from us. If you are, you will and the thrust for us today is bundling, bundling, bundling. That's how we're going to keep you as a customer because the more stuff that you sign up for, the better price value relationship you're going to get from Cox.

KELLER: And of the doubling that you want to do within the five-year period – you made that statement maybe a year or so ago...

ROBBINS: That's my boss's statement and I repeat it as a good soldier.

KELLER: All right, but the fact is you anticipate doing that primarily through services other than providing cable television services?

ROBBINS: We think, Jim, maybe in five years that our core cable business as we know it today may amount to 50% of the revenues and the rest of them are going to come out of advertising, telephone, high-speed Internet access, home networking, security, Internet through the television, interactive television, video on demand, any number of things. And that's frankly one of the things that's so much fun about being in the business today. What are the new products and services that are going to go down the pipe? Can you make money on any of them?

KELLER: It's one of the values of having a pipe rather than over the air type services.

ROBBINS: You bet.

KELLER: It's a great tool.

ROBBINS: You know, we're meeting on a regular basis on this whole subject of what are the things going down the pipe that we need to really hone in on.

KELLER: Once you got out of the SST business, or the microwave business in communities, including Denver, you've never been in the wireless business again, have you? Except for the PCS?

ROBBINS: Just PCS.

KELLER: Then you're a part owner with Sprint, is that correct?

ROBBINS: We're a part owner with Sprint and Comcast and Liberty.

KELLER: Those are great partners.

ROBBINS: Sprint PCS. Yes. But the reason we got into that is actually somebody at Cox Enterprises said, "Hey, they're offering some experimental licenses based on a technology that would use the cable platform as the return path for the Sprint PCS conversations." So we got an experimental license in California. We wound up having to pay for it – for some strange reason the government reneged on their offer of an experimental license.

KELLER: You went into the auction at that time, right?

ROBBINS: Yes, and when we did that we also said, "Well, look, let's hedge our bet here by taking a piece of the parent." So we took 15% of the PCS start up in Kansas City with Sprint Corp. and that's turned out to be a very valuable investment for us.

KELLER: And it will continue to be, I'm sure.

ROBBINS: I think so too.

KELLER: Now, you have always had various partners in various businesses that you've been in, even to go back to what made you a very formidable opponent in the franchising efforts, when you used to go in and get the local newspaper as a partner with you. If they weren't your newspaper at least you did know somebody, you knew the editor or publisher, whoever it would be and you'd bring him to the table during the franchising process, which I thought was a tough, tough competition for us. You won many of them on that and you're still bringing in outside partners into a lot of your businesses at this time.

ROBBINS: Part of that is done out of necessity because we have always been of a size where by getting together with other people our size or maybe a little smaller or maybe a little bigger, we were able to aggregate enough either homes passed or customers or whatever to give somebody who wanted to use our pipes a lot more scale. That turned out to be the case with Discovery. We got together with TCI and with Newhouse and that's certainly turned out to be the case with Teleport and it turned out to be the case with Sprint PCS and I want to know what the next one is going to be because those have all been wonderful value creation opportunities for us.

KELLER: Do you see yourself in those investments over the long term or do you think you'll buy some of the companies out or they'll buy you out? I know you can't say which is going to be what, but...

ROBBINS: Well, I can tell you historically, we've taken our... well, first of all, Teleport was sold to AT&T. We got AT&T stock for that sale, we took that AT&T stock and traded it for some cable television systems including Baton Rouge and Tulsa, Oklahoma, which fit into our clustering strategy very nicely. On the Sprint PCS stock, we still have 4 ½, 5 billion dollars of that on our balance sheet today and it becomes a more valuable asset everyday.

KELLER: I think it will continue to be too.

ROBBINS: I hope so. Discovery, I think we think, is a core holding. It has now come to be regarded in the Cox family as one of the crown jewels and we love the programming, we love the management and I don't think you'll see us to anything with that. We'd love to get more of that and we had a chance to buy more of it when United Cable sold their interest and we declined and John Malone, with his vision, just scooped it up.

KELLER: Hearst is in that too, isn't it?

ROBBINS: No, Newhouse.

KELLER: Newhouse, okay.

ROBBINS: Yes.

KELLER: Hearst is in some of the others – the History Channel.

ROBBINS: Yes, Hearst is in History Channel, I think Hearst is in Lifetime and some of the others.

KELLER: I thought maybe they were also in Discovery but apparently I was wrong. In your current operations in telephony and Internet data services that you're starting or has been started for some time in Omaha, Phoenix and southern California, how are you doing?

ROBBINS: I think we're doing great. These are new businesses, they require a lot of care and feeding. We've invested a lot of capital, probably more capital than any other company in the industry but the overarching objective is to put a bundle of services in your house and have those services stick by offering you nice discounts against an array of ala carte competitors and today, Jim, what's driving this is the need on the part of our consumers to have more control over their time. I'll give you a stretched example, but if it takes me 10 people to get video, voice, and data hooked up into your house and I bring them all in at 8:00 in the morning and they're all gone at 9:00 in morning, that's a great use of your time. It's not a great use of all of my labor but the flip side of it, and this is the nightmare scenario that I worry about, is Monday the cable guy calls, Tuesday the digital television guy calls, Wednesday the phone guy calls, Thursday the data guy calls, and you might as well be dealing with four different companies. That is not the business model that makes sense. The business model that makes sense is we come to your house once, you get very comfortable with us and what we're doing and that relationship so that when you have to write us $100 check every month, it's not a big deal. This is a company that's doing a good job for you and saving you time and making your life more productive. That's what this thing is all about.

KELLER: I think you heard Charlie Armstrong with AT&T in Chicago, was that two years or three years ago?

ROBBINS: Mike Armstrong.

KELLER: Mike Armstrong – state that that was his intent also within his systems and then he went a step farther in talking about the potential of a single, some kind of instrument that would accept all of these services and be able to show all of these services. Do you see that in the forefront also?

ROBBINS: I don't know what you mean by a single instrument.

KELLER: It would be an instrument that would combine a computer screen, a telephone instrument, television set and so on in a single, I don't want to use the word platform, but in a single location, in a single piece of equipment in which all of these services can function.

ROBBINS: Maybe, although I don't see long form video being viewed on a small screen and I'm not sure I see, maybe there's a better possibility, albeit not a very high one, of doing a lot of text on a big screen interactively. What I'm talking about there is a computer experience, a high speed data experience that you would have today taking place over a big screen television. I think we're going to have discreet and separate human behaviors – the lean back experience and the lean forward experience. There's going to be some blending.

KELLER: That's an interesting way of putting it.

ROBBINS: And I think one of the fascinating opportunities for the industry today is to bring those people who do not have an online experience at their desktop today, to bring them into that experience through the television and migrate them, upsell them if you will, into being a high speed Internet access customer. I think that's a huge opportunity. The TV set is on 7 hours a day today in the average American household, the computer is being used 1 or 2 hours and what better opportunity to lead people to a computer experience through the television set.

KELLER: I've always agreed that the television set could act as the monitor for your computer service. I don't think there's any doubt about that occurring.

ROBBINS: Right.

KELLER: You've gone into both switched telephony and Internet services in your various operations, which again has been a little bit different than some of the other companies, either one or the other. Comcast, as an example, has decided that they're going to go into the Internet services and stayed pretty much away from switch services.

ROBBINS: Well, they haven't done any telephone to speak of, they had done digital, which is an extension of their video product and they're doing a lot of high speed data service right now. For us, we have over a million customer right now that are taking one of the three new services, either digital television, high speed Internet access or telephone and we're adding to that customer base at a rate of 17,000-18,000 a week and all that does is leverage our platform, leverage the customer relationship that we have, leverage the people, the managerial resources and customer contact resources that we have across the company and I think that makes an enormous amount of sense. It's proven to be the right strategy even though we missed our numbers two weeks ago by three million dollars and Wall Street killed us. It is the right long term investment.

KELLER: I tend to agree. How many are taking all three services?

ROBBINS: I honestly don't know the answer to that.

KELLER: Is there a large percentage or a small percentage?

ROBBINS: No, I think most of our customers are taking a two service combinations: core cable plus data and digital, for example. Most of them are taking that, some are taking only one and there are some that are taking all three services and of course our job is migrate them up to three services so that, again, they'll feel very comfortable doing business with us.

KELLER: Are you bringing it into their present telephone instrument?

ROBBINS: Yes, and we use their home wire.

KELLER: The segue into this whole thing then is going back to the '84 Cable Act, which was a great boon to the industry and then the '92 Act and then the '96, which is a progression all the way through. The '92 hurt the industry tremendously from a dollar and cents standpoint.

ROBBINS: Yes, yes.

KELLER: Most everybody survived and in fact some of them bought out a lot of their limited partners on that basis too, in '92, but you were involved as chairman of the NCTA in '91 and putting the final touches on whatever agreement was going to be made when we re-regulated it.

ROBBINS: Yes and no. At that point the board of the NCTA, and I was chairman at that time, was really quite hands off. We had a long seasoned, experienced executive in Jim Mooney, who was running the NCTA, and I think in the final analysis we as an industry got caught up in our shorts a little bit. I think Jim took a hard line, I think the industry supported him on that, some of the individual companies, including one that you used to work for – you worked for bunch of them so that could be anybody...

KELLER: It was ATC.

ROBBINS: They also took a hard line and the net net of all that was we may have overplayed our hand by the time '92 rolled around and the industry was re-regulated. We may have brought some of that on ourselves by taking too hard a line.

KELLER: I don't think there's any question about it, especially in view of the Tennessee experience, which granted was anecdotal, it was very limited in scope, but nonetheless, it was a very powerful guy.

ROBBINS: It was from a "Johnny come lately" into the industry who was a financial player, I'll never forget him as long as I live, and we got screwed because, the whole industry got screwed because of the behavior of one individual.

KELLER: That's right, that's right. He was really going to lay it to them and get his money out in a hurry.

ROBBINS: You bet. He took us all down.

KELLER: And Al Gore got a hold of it and ran with it.

ROBBINS: And only history will know as to whether that good man's going to make it to the White House on the backs of cable television or not.

KELLER: Well, he's got a good start, we'll put it that way, toward it. But then the '96 Act, actually '84 was very good for us, '96 I think is yet to be determined how it's going to effect the overall industry and then profusion of services that are going to come together because of the '96 Act. It permits us to do all of these services, first of all.

ROBBINS: The '96 Act is a terrific boon to this industry, there is no question about that.

KELLER: And the telephone company was the one that wanted it in the worst way.

ROBBINS: Yes, it was a little bit of an irony on that one.

KELLER: A big irony.

ROBBINS: We had great leadership in Washington. Jim Mooney decided it was time for him to move on and we were very fortunate in having standing in the wings Decker Anstrom, who I think did a wonderful job bringing together the somewhat dispirited industry culmination of the '96 Telecomm Act.

KELLER: It was a confused industry, I think, then in the mid-'90s.

ROBBINS: Well, we'd been wumped by Reed Hunt, he'd taken our rates down, he'd caused all sorts of chaos on Wall Street for the public companies and it was not a time when people were investing aggressively in this business, which is what's going on now. I think it's fair to say that left alone, this industry will continue to invest heavily and toward the end of making peoples' lives easier and more productive.

KELLER: So you feel that those companies that are going to remain, and now we're going to put it in quotes, "cable television" because it's really not per se cable television anymore, it's a whole broadband communications service.

ROBBINS: We changed our name when we acquired the Times Mirror cable properties in 1995 to Cox Communications from Cox Cable and I think that says it all.

KELLER: I think so and I think there's no questions about it and so you really can't talk about the future of cable television, you've got to about the future of the telecommunications industry.

ROBBINS: Or broadband communications or whatever you want to call it, yes.

KELLER: But another term for it. There are going to be some major players in the business, as history tells us, we're going to end up with four or five major companies in the business over the next ten or twenty years. Do you see Cox being one of those players?

ROBBINS: I do. The Cox family loves this asset and I think as families in America go, no family has more invested in this business than the Cox family.

KELLER: I think that's true.

ROBBINS: There's no questions that it's true if you take 65% of Cox Communications with a market cap today after getting beaten up, it's somewhere in the 20-25 billion, 65% of that is 16, 17, 18 billion if my math is right, there's no other family in America that's got that much of their resources tied up in this business.

KELLER: How do you see the merging of, say, a Microsoft into the industry, or Paul Allen or someone else bringing this computerized background into the industry? How do you see that working?

ROBBINS: I think that's good. I think the industry's got to get away from its paradigm that's been around. It has to morph itself on to new technologies, new players, all the time. I think as quickly as you say that you also have to quickly beware of where Microsoft wants to wind up. They want to be the guy that is the toll collector for everything that you do and that's not in our best interests.

KELLER: The telephone company wanted to be that at one time too, including owning the instruments into the home and so on. Our industry, the cable industry, at that time wanted to be the same way, insisting that we own the converters as opposed to allowing it to be bought in retail and so on. We all went through that battle.

ROBBINS: And I don't think that's all bad. It gives you an opportunity to forward integrate.

KELLER: I didn't say it was bad, I'm saying it is a merging function of all services into the home.

ROBBINS: No question. No question, and there are going to be more services and more software applications and things like that that are going to go on.

KELLER: Do you see the competition between over the air services and broadband services going in what direction?

ROBBINS: I think it's going to be harder and harder and harder and I say this with a certain amount of remorse because the prophets from Cox Broadcasting allowed Cox Communications to grow, but I think it's going to be harder and harder and harder to sustain the economic paradigm that you have in broadcasting for a long, long, long time.

KELLER: They're finally going to recognize what business they're in?

ROBBINS: Well, maybe, maybe not, I don't know whether that's the right...

KELLER: Well, it's always been peeve of mine. It's like newspaper work the same way, they're not in the printing business, they're in the news producing business. The same way in broadcasting, they're not in the distribution business, they're in the programming business.

ROBBINS: Right, right.

KELLER: A lot of times those old timers never realize that in both industries.

ROBBINS: I think that's true and I just don't know – there's still an opportunity to get a mass market and advertisers are going to pay dearly for that but as you proliferate to all of the analog sites and all of the digital channels and now the Internet and streaming video on the Internet, it seems to me that the demand for broadcasting, as it's presently known, has got to go down. Some events like the Olympics this fall, no, but it worries me longer term. The future of that business.

KELLER: In what way does it worry you?

ROBBINS: I just don't know that the current economic model with very expensive programming, one, two, three hundred thousand dollars for a half an hour episode, I don't know whether that model is sustainable.

KELLER: I'm not sure it is either. Had Cox, other than through your investments in some of the programming services in cable, have they tended to move into the programming services from a broadcasting side?

ROBBINS: No, in fact just the opposite. We had an investment in Reischer Entertainment in the broadcast operation and we didn't feel comfortable with that and we got out of that in the last couple years. I think if anything we would pick up more stations and particularly stations in clusters. We've just done a deal that was announced in the last couple of weeks where we picked up Steubenville and one other NBC affiliate not so far from Pittsburgh, so now all of the sudden we have Pittsburgh, Steubenville, and we have one other community and we really blanket an entire region with the NBC affiliation.

KELLER: Almost like translators, huh?

ROBBINS: Yeah, yeah, it is in some respects.

KELLER: And you share programming, newscasts, and so on with the stations?

ROBBINS: I guess so, I don't know. We certainly share the back office stuff and you've got to make some sense over that.

KELLER: Tell me how your NOC works, your National Operations Center. It's amazing to me that you can monitor an amplifier in Las Vegas from a central location.

ROBBINS: That tells you something about how the telcomm costs have come down so much over the years. It's as simple as that. It's like being at AT&T's network operations center in Bedminster, New Jersey. We monitor all of our amplifiers. When you're in the phone business and the 911 business, you've got to be at that kind of state of readiness and we're running 99.93% tight network, which again is a great credit to Alex Best and the engineering standards that he established for it.

KELLER: And you also use it for customer service, don't you? You know what each operation is doing from a customer service standpoint?

ROBBINS: Correct.

KELLER: Truly amazing from a centralized, what's being done... TCI tried to do it from a billing and reporting situation from their operation center in Denver but not, I don't think, to the extent that you are using it.

ROBBINS: Well, we've got big customer service centers and operation centers around the country. So, just because we've got a NOC here doesn't mean that we haven't got somebody out in Orange County looking over the same thing. It may not be the most efficient and we're trying to sort that one out as we go.

KELLER: How far from the early days of the business when the only way we knew there was an outage was when a customer called in and said, "Hey, I've got no picture." And then we called the guys out. It's amazing, just absolutely amazing. You made major acquisitions during 1999 and early 2000 to media general, TCA, multimedia and then bought the Baton Rouge and the Tulsa systems.

ROBBINS: We traded them for AT&T stock. Jim that was pretty straightforward. In '95 we did Times Mirror, we felt very strongly we had to grow or get out of the business. Last year we felt the same thing. A bunch of nice properties that fitted well with us were coming in to the market and we just sprung for them and I think that was sort of another defining moment for this company.

KELLER: They made the decision they were going to move ahead.

ROBBINS: Yeah, we had to either get bigger or we had to get out of the business.

KELLER: Was that a battle on the board?

ROBBINS: Nope, not at all. Jim Kennedy, my boss since 1987 has been just a huge steadfast supporter of what we have done and it's turned out to be a wonderful decision for him because we've added an enormous amount of value to Cox Enterprises. When I came here, Cox Communications was somewhere between 20 and 25% of the family's assets. Today we represent about 53% of the family's... well, probably not today with the stock market the way it is.

KELLER: Including revenue?

ROBBINS: Yeah, but I'm really talking about evaluations. We're probably close to 50% of the Cox family holdings.

KELLER: Even with all the television stations and the newspapers, you're still more than half?

ROBBINS: Yes, yes.

KELLER: Have you learned anything from the experiences that Henry Harris or Bob Wright had preceding you? Those two come to mind more so than some of the others that were here, but those two were dynamos in business.

ROBBINS: I will tell you, with all due respect to Bob, who I think has done a fabulous job at NBC, I had some cleaning up to do because I think his game was to go out and get franchises no matter what the cost. We had some that were so costly we couldn't hang onto them.

KELLER: Well, that was in the era, though, when you couldn't provide any service, wasn't it, for some of those franchise markets?

ROBBINS: That's true and we went out and committed all sorts of things in some of these franchises that there was no way you were ever going to make a nickel on them. Henry, I think, represented very strong financial discipline in the company and hopefully that discipline continues today. I see him around here in Atlanta, I haven't seen him in a couple years but he's just a wonderful, happy guy.

KELLER: We haven't interviewed him yet and I fully intend to.

ROBBINS: Yeah, you should.

KELLER: There's no doubt that he will be interviewed, there's no doubt about it. The present industry standards: do you feel that Cox is really setting the basic standards for customer service in the integrity of the network and so on within the industry?

ROBBINS: I think we are in that respect. I don't pretend that at 6 million customers that we can set any standard about anything in this industry but we can generate some thought leadership and we can influence some of the thinking and where we have an expertise we try and do that. You've mentioned two of them: customer service and technical standards.

KELLER: Do you still serve on the board? As past chairman you still serve on the NCTA board?

ROBBINS: Yes, yes.

KELLER: And you still serve on the Kaitz Foundation?

ROBBINS: I'm still on the Kaitz Foundation board and I think some past position, I don't know if I got an official position but I guess by virtue of our size and anymore people will tell you you can have the industry around a dinner table and get all your programming deals done, but I still feel very strongly in what Cable in the Classroom does.

KELLER: Talk about that, will you please?

ROBBINS: And C-SPAN.

KELLER: Well, C-SPAN we've already interviewed Brian Lamb, but I'd like to talk about Cable in the Classroom that you head right now. How did you get involved in it and what are you currently doing?

ROBBINS: Well, I'll tell you, that in some respects, Jim, goes back to my days at Continental where I think Bud Hostetter felt very strongly about giving back to the communities that gave to him and that combined with a huge sense of fear that our educational system in this country wasn't keeping up. I've been to Japan and I've seen kids in July in uniform going to school and I'm saying to myself, "Wait a minute, this is summertime, these kids don't get any break. What's happening here?" And if you just look around the world from a competitive standpoint, I think a lot of American success hinges on education, but I worry that for whatever reasons we're losing the worldwide competitive advantage to people who are really focused much harder on education. So that sort of backdrop philosophy combined with what I think is the power of video led me to be an early and ardent supporter of Cable in the Classroom and that organization is evolving now from an organization that was able to bring programming to classrooms to a teacher training organization and I think now because of the composition of the industry, the industrial players, i.e. Cox or AT&T or Time Warner, they have got to do that job in the communities that they serve. It must fall to those because Cable in the Classroom, with a very small staff, can only support so many teacher training initiatives and then it's got to sprinkle on down the line. I think the companies have really got to take the responsibility for that, so Cable in the Classroom is now evolving into something that I think will bring nice credit to the industry from a political and public affairs perspective and should.

KELLER: Very much so.

ROBBINS: And I think its role... but its role is changing. It's probably going to do less hands on training and more advocacy, if you will, for educational support for our industry, for infrastructure of software, and so forth.

KELLER: I'm absolutely abhorred by the fact that most people don't know, and many of the textbooks don't even have such things as some of the very stalwarts of our history. They keep Thomas Jefferson in there, but only in sometimes in a negative way, that he was a slave owner and that was about all, never the great things that he did. The mid-history of our country with the exception, perhaps, of the Civil War are virtually lost on most of our college students. Most of them don't even know the Second World War. I'm abhorred by it, so I understand what you're saying.

ROBBINS: Well, I just think that it's very clear and I will tell you from a standpoint of sitting in this chair today, the hardest job I have is making sure we get and keep and train the people we need to keep up with the demand for the services that our customers are calling for and part of that has to do with the very robust economy that we're operating in, part of it has to do with the seemingly endless amount of venture money supporting start-ups, and frankly a lot of the experience that we have inside of this company is attractive to people who are doing telecomm start-ups, doing dot com start-ups, so I think it's doubly tough in the sector in which we operate and that just reinforces even to a greater degree my notion of support for Cable in the Classroom. I think it and the Kaitz Foundation, and you have to say in the same breath, C-SPAN, are three absolute crown jewels in our industry. C-SPAN is well known, the other two are not and one of the reasons to try and shift focus a little bit for Cable in the Classroom is to try and get some recognition that in fact, what everybody thinks of as ugly monopolists taking $35 a month from poor Joe six-pack, we do an awful lot of good things and if you see Johnny making his computer dance because he's got a high-speed connection and his teacher learned how to learn his connection and taught him, by God, that is advancing the competitiveness of America.

KELLER: Are you providing television sets or computers to any of the classrooms at this point?

ROBBINS: Some markets we have provided computers. We absolutely provide an Internet connection, we absolutely provide Cable in the Classroom programming in all the schools that we serve and in many of our systems we have educational coordinators that basically try and be the linkage between the classroom teacher and the programmer on how to use all this great stuff. You know there is fabulous stuff on the air but most people don't know how to use it, don't know how to access it.

KELLER: And also even some of our channels, the Discovery Channel, the History Channel...

ROBBINS: Discovery Channel, History Channel, Arts & Entertainment, Bravo, you name it - The Learning Channel - there are just tons of them. I wish I watched more television. I don't watch a lot of television.

KELLER: I watch the ballgame or I'll turn on the History Channel, that's about it.

ROBBINS: Or I'll go chase the news, CNBC, early in the morning when I get up, but I'd love to sit down and look at Biography every night. I think it's a great concept. I can't sing Nick Davatzes's praises enough in terms of what he's done for this industry.

KELLER: No question. You know, when you say what these various channels have done for the industry, I made the mistake of saying to Brian Lamb that C-SPAN was a great public relations venture for the industry and he almost went right through the ceiling because he just... and it is, it was, he can't deny it.

ROBBINS: Yeah.

KELLER: He said it wasn't meant to be, it just happened to be and that was not the intent.

ROBBINS: But that thing has got great substance, just tremendous substance and the public relations elements of that were secondary. I wish we got the same public relations benefit out of Cable in the Classroom and also out of Walter Kaitz Foundation. You wanted to go there in our conversation. We've got a very simple philosophy around here that if you're not reflecting the marketplace that you serve with those same kinds of faces in your ranks at all levels, then you are not taking advantage of the business opportunity that's there. If, for example, in New Orleans our customer base is probably 50, 60, 70 per cent African American and our ranks there reflect the same thing and that's good because I don't think I, as a white male, understand what goes through in a purchasing decision of an African American family or in Southern California or Phoenix or Tucson or wherever else, the Hispanic family. So we need to reflect that all the way around. The Kaitz Foundation, in good years and bad, allows us to do that. It's a fabulous legacy to Walter Kaitz and the fact that Spencer and his wife and his mother have been so steadfast.

KELLER: I was on the board from '81 through '86, a long time ago, but nonetheless. We were fighting battles then as to which way we were going to go, how we were going to handle it, how many interns we should have each year, whether we could afford to do it and so on. It was a long battle.

ROBBINS: Absolutely. And the recruiting effectiveness has changed over the years but I don't know of any other industry, Jim, that has something like the Kaitz Foundation. The dinner that they throw every year, that's an evergreen. It's a million five, a million seven, two million dollars that they raise. I mean, that's extraordinary that so many people would coalesce and maybe they go there because the investment banks feel that if they don't sign up for a table there they'll be left out or something. Whatever it is, but it's pushing the passion of Walter Kaitz, which I think is a super asset to this industry and one that we haven't got anywhere near the credit that we should.

KELLER: Explain the purpose of the Kaitz Foundation.

ROBBINS: It's really, in my judgment, to bring minorities into the managerial ranks of the industry.

KELLER: And women, at least it started off to be women.

ROBBINS: Well, when I say minorities, I mean minorities by gender, minorities by sex, and I don't think we've got as much of an issue with women in this industry...

KELLER: Not any more.

ROBBINS: ... as we do with minorities by race and that's where the NAACP is starting to pick at us a little bit and a little of that helps us a lot to really focus on what we should be doing and I'm very proud of the work that Cox has done in this area. I'm not proud of the grade that we got from the NAACP. We, like a bunch of other companies, were sort of in the middle of the pack.

KELLER: I wasn't aware that there was grading.

ROBBINS: Yeah, I think the industry got graded from B- to F, or something like that.

KELLER: By company or by system?

ROBBINS: By company and unfortunately part of this is a little bit of fundraising going on at the NAACP. I'd rather be straight up and say, hey, if you've got a request you want, let's talk about it but let's not go do a dipstick and you're bad and the way you get out of the bad box is to gift some corporate resources to the NAACP. My take is we need as a company to reflect the markets that we serve and that's what hopefully this company is doing and I hope the rest of the industry is doing.

KELLER: I would hope that would be the case but unfortunately I don't think it is, as of today.

ROBBINS: I don't think it is either.

KELLER: Do you see the Kaitz Foundation continuing to bring in educated minorities into the business because I think now they've set a standard at which the interns can be – they have to have some work experience and some educational background before they can do this.

ROBBINS: Oh yes, oh yes.

KELLER: At one time that was not the case.

ROBBINS: Yes, absolutely, and I think the pool is bigger than it's ever been because more people have been able to go to college one was or another. Absolutely I do. In fact, I've got a phone call this afternoon with John Goddard and Spencer Kaitz on a new chief executive officer for the Kaitz Foundation and I'm looking forward to that call.

KELLER: They've had some good executive directors of that foundation who have worked awfully hard and of course Spencer is the keystone of the whole thing.

ROBBINS: He's the godfather who has been there through thick and thin, absolutely.

KELLER: As his father was in the early days of the industry right on through. He fought some of the battles in California that they won before they ever got to the national scene. It was just amazing.

ROBBINS: Yeah.

KELLER: Where do you see, philosophically do you see Cox moving on into the future?

ROBBINS: Jim, we're at 6 million customers. The Cox family loves the business, we have a lot of financial capacity if we want to use it. We could get a lot bigger if we wanted to. Right now our concentration is on executing against the bundled opportunity and that will take another two or three years. Of course you can never predict the timing on when big opportunities come along.

KELLER: Are you constrained by a debt/equity ration basis?

ROBBINS: Not really. Our debt is somewhere between four and five times. We're not overly leveraged; we're adequately leveraged. Where we're spending our money today is making sure that once we put these new services in we do a good job and that's costing us a little on our cash flow line and that hurts because we put a lot of capital in the ground. Wall Street wants to see bigger and better returns and they want to see them instantaneously. Well, when you're rolling telephone across the country, that takes some time to get in place.

KELLER: If you don't do it, the Internet services are going to because they're digging up every city in the country right now.

ROBBINS: Absolutely, and these are all opportunities for us to lose. We are beautifully positioned, have a wonderful pipe and relationship to the customer and again, we were talking this morning about in home networking: you get one or two or three computers in your house, plus a television, plus telephone and there is a terrific opportunity for some company to be the first phone call to fix any problems that you may have.

KELLER: Can you do that right now in your systems?

ROBBINS: Can do, we're not doing it. We're not concentrating on that.

KELLER: You haven't got the trained people to be able to do it?

ROBBINS: Well, I'm so busy doing everything else that it's not an initiative we've started on, but we need to do that because otherwise somebody else is going to get into this relationship with the customer and that's not good for us long term.

KELLER: Do you see the capabilities of your chief technicians, your chief engineers in your major complexes changing their basic needs, their basic educational background from rather the transmission type of experience to something more?

ROBBINS: Yes and no. The average customer contact person has got to be more knowledgeable today, rather that person is on a telephone or rather that person is out in a truck in the field and that rise in skill set, I think, runs all the way up the organization. I must say I feel inadequate today about really understanding the Internet and what's going on there, but I didn't come up in that generation.

KELLER: I'm with you.

ROBBINS: So, I need to get a 35-year-old hotshot in our company that can help us figure out what the opportunities are there. Just to go back to your other question about what does Cox look like in the future – we're going to push more and more of these new services down the pipe and we think by leveraging that platform, leveraging our customer relationships, leveraging our management and leveraging our clustering, we think that's a great strategy that should be able to give us a double in the size of the company every five years.

KELLER: I don't want to sound like a Wall Street analyst, but is that going to have a major impact on your cash flow and on your earnings?

ROBBINS: Oh, yeah. I think 50% of our cash flow in five years will come from other than traditional video services.

KELLER: But in the interim though, it's going to have a negative effect, isn't it?

ROBBINS: In the interim, laying on these new services costs money, absolutely.

KELLER: And you're willing and the company's willing to take that...

ROBBINS: My boss is very clear about let's take the long term view and you know, it's tough when quarter to quarter Wall Street wants you to show just never ending increases in your cash flow.

KELLER: how often do you tell them about your plans?

ROBBINS: Wall Street? We talk to them a lot and you can get caught up in their rhetoric, which they all want double digit cash flow every quarter, whatever. Well, they don't understand that you've got to invest and some of the additional marketing and effort to get these new services rolled out is going to cost you in the current quarter and you won't see the revenue impact for a couple of quarters later so it's a balancing act that we've got to work our way through.

KELLER: I think many of the analysts were so bound up by the utility concept where if you made an investment of x number of dollars, you immediately had x return on that investment, that is the telephone companies, power companies and so on.

ROBBINS: Yep, yep, guaranteed rate of return.

KELLER: And we don't have that and fortunately we never wanted it.

ROBBINS: Always risk capital in our business.

KELLER: Always, from day one.

ROBBINS: Yes, absolutely.

KELLER: That's one of the advantages of growing up in small towns and burgeoning from there as we have been.

ROBBINS: Yeah, yeah.

KELLER: Jim, is there anything else you'd like to add before we wrap this up? It's been a delight speaking with you. Do you want to put a tag on it?

ROBBINS: Well, my only finishing comment would be I think that if this company is remembered for one thing, maybe it is remembered for it's customer service. Yes, we do a lot in the community but other companies do that. I do think that we have defined what customer service is all about in this business and we continue to define it every day and frankly I think that's a great long term business proposition for the industry.

KELLER: I'll go back to a comment I made earlier about the Cox reputation about being management, customer service, and community service. It still is a major, major factor within the entire industry, whatever that industry is today, whatever you want to call it.

ROBBINS: Well, we hope we have a little bit of thought leadership in those areas and as we get new players in the business and different players in the business, we hope some of the stuff that has brought us to the position of greatness that I think we've arrived at - not to get fat and happy - but we've arrived at will rub off on some of the other new guys coming into the business.

KELLER: I don't think there's any question. Jim, we appreciate it. This oral history has been provided by a grant from the Gustave Hauser Foundation and is part of the oral history program of The Cable Center. Again, the date is August 8, 2000. We're in the offices of Cox Communications in Atlanta, Georgia. Again, Jim, thank you very much for you time. What a pleasure.

ROBBINS: Jim, thank you very much. Fun being with you for an hour and a half.

KELLER: It was fun.

ROBBINS: Great.

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William Riker

rikerWilliam5

Interview Location: Denver, CO
Interviewer: Rex Porter
Collection: Hauser Collection

PORTER: I'm Rex Porter and we're at the AT&T Media facilities to interview cable pioneer Bill Riker. Bill Riker is presently Chief Technical Officer for the National Cable Television Center and Museum. Bill, welcome.

RIKER: Thank you.

PORTER: I'm quite used to talking to Bill Riker about the SCTE over the number of years he was heading up the society. Before we get into that period of your history, Bill, why don't you bring us up to date going back to your early years, growing up, high school, and so forth.

RIKER: You want to go all the way back?

PORTER: All the way back.

RIKER: I grew up in a town called Chatham, New Jersey which is about 45 minutes west of New York City. During those years, I spent a lot of time seeing the sights of New York, first with my parents and then on my own. I went to Chatham Township High School and at that point in time got interested in music. I joined the band there at the school, but eventually branched off to start my own "garage band" back at home. Because of the influence I was getting through traveling to Greenwich Village and seeing Jimi Hendrix at the Fillmore East, concerts and clubs, I really got very much involved with the music business.

Concurrently, I was also very much interested in film and had my own 8 mm camera and was taking my own home movies. I was also a projectionist, first at the YMCA in town and then became projectionist for one of the local theaters. Both of these two backgrounds really got me interested in electronics. As we traveled around the state with the band, when the equipment used to break down, lucky me was the one to be asked to repair it. So that seemed like an interesting direction to go at college so I did go to a school for electronic engineering.

After graduating from Monmouth University, I was lucky enough to get a job in radio. At first, I was building sound systems for some of the dinner theaters that they owned. Then I went on to design one of the first quadraphonic broadcast studios in the country. If you remember, after two-channel stereo came along, they decided the next step was going to be four channel stereo. We built a broadcast studio that could do discrete, QS and SQ encoding of different audio signals in order to deliver four-channel programming. As the FCC, in its infinite wisdom, the same as when it dealt with AM radio, did not choose a specific technology or format to distribute those signals. So four-channel kind of went by the wayside because it was never standardized.

PORTER: What you've got today is just surround-sound.

RIKER: Now it's five-channel sound. I heard just two days ago now they have a 12-channel system that they want me to look into for The Cable Center.

PORTER: Oh good.

RIKER: After what I considered mastering audio, my desire was to get into television. Being in the New York area, that seemed like a logical move. However, by the time I decided to get into television in New York, most of the production had moved out to Hollywood and Los Angeles. I was offered a position as a cameraman for the New York Yankees games at Yankee Stadium. I said, "Well, that sounds great, but what do I do when the Yankees aren't playing and the season's over?" They said, "Do like the rest of the union guys – collect unemployment." That just didn't seem like the way I wanted to start off my career in television.

I saw an ad for a chief engineer position at a cable television system. While I had heard about cable television and all the wonders it could deliver back when I was a kid, like pay-per-view and uncut movies, that type of thing, it was never available in the town that I grew up in until well after I had left. So it was really a new concept to me, but it had the word television in it so I figured it must be linked to what I really wanted to do. That was Dick Loftus's system in Hoboken, New Jersey. A gentleman by the name of Hank Majors was the general manger there at the time. He hired me on to maintain a 60-mile system with about 12,000 subscribers on it.

PORTER: How many channels?

RIKER: We had 20 at the time. It was a Jerrold Starline 20 system which was pretty high-tech compared to what I have seen in other areas. It was a real manageable system that was also a good place to learn. We had a headend up on the Palisades Mountains overlooking Manhattan. One of the big problems we had was that you could get a better picture off your antenna than you could off the cable system because the Empire State Building was within visible distance. You could get the signals directly without any amplifiers as opposed to going to a headend, being processed in several distribution amplifiers to get to your house. So the signals we offered were usually worse than what was available over the air.

PORTER: Did you bring in the Philadelphia channels also?

RIKER: Not yet. It was something I ended up doing later on. At the time they started moving the broadcast towers from the Empire State Building to the World Trade Center – I don't know if you remember that happening –

PORTER: I wasn't there but I remember it happening.

RIKER: Since they started building the World Trade Center, it interfered with the propagation of signals from Empire State. So they made a several year transition to move the antennas on top of World Trade, which is where they are now. In doing so, this caused us to completely reorient our headend, because now we were aiming in a different direction. In fact, the reflections off the New York skyscrapers became different. Surprisingly enough, the Channel 2 signal coming in right off World Trade was so full of ghosting that we ended up going through the whole town with a little Radio Shack antenna and a TV set and finally found that the best picture we could get for the system was on the roof of a bowling alley in North Bergen, N.J. We ended up paying that guy an exorbitant amount of money – something like $500 a month – to be able to put an antenna on his roof and then back haul Channel 2 all the way to the headend, because that picture was better than what we could get at the headend site.

PORTER: Did you have UHF stations also?

RIKER: We did have several UHF stations.

PORTER: Then the problem with them must have been compounded as far as ghosting.

RIKER: It was a challenge, but the UHF's were coming from directions away from Manhattan. We were also one of the first systems to get a feed from Home Box Office. At that point in time, HBO was being transmitted out of New York City at Two Penn Plaza, on top of the Madison Square Garden facility, and was only being distributed by microwave. With our proximity, we were able to get a microwave feed from them. Prior to that, for a very short period of time, we were going the old bicycling of tapes route where HBO would create hundreds of ¾" tapes and send them out to each cable operator for them to play back, almost as a local origination station.

We were one of the first to make that transition to a live feed – not by satellite, but just by microwave. Because subscribers could receive all of their off-airs at the same quality or better through their own antenna as opposed to the cable system, our system was going to be first to declare bankruptcy because we just didn't have the subscribers. I'll give you an example. Hoboken, New Jersey – ever been there? Home of Frank Sinatra, The Clam Broth House, and all those exciting things. They did a demographic study and usually the breakeven point for building a cable system is 100 homes passed per mile. In Hoboken, it was 1,000 homes (or apartments) passed per mile because it was such a densely populated area. So the marketers said, "Can't lose." Actually we did lose because the signals that everybody received off-air were better than having to pay us for it.

So it wasn't until we introduced HBO, which now gave them something they could not get without the cable system, that we turned it around and started making a profit. That system was then bought by Prime Cable. I'm not sure if it's still with them or not. That's where it went. Then they expanded and built in several of the other cities around the area.

You'd asked me about the Philadelphia stations. At the time, we could not receive the Philadelphia stations from all the way in New York City. I worked for several months on different antenna configurations and tried to convince my boss that this was a worthwhile investment. We ended up getting two large UHF antennas that were about 20' tall each. They had multiple butterfly elements on them. One was tuned for Channel 29 and the other Channel 17, which were the two we were bringing in from Philadelphia. With that and some very sharp notch filters and some very good pre-amps, we were able to bring in signals from over 100 miles away with surprising clarity. That was another thing that helped us turn the system around financially.

PORTER: So now you've got HBO, and you're still there. You've got two additional stations that people can't get. How long was it before you got another one, or did you leave there before then?

RIKER: At that point, I was offered a position in New Jersey in Bob Bilodeau's system, which was called Suburban Cablevision. Bob had worked for Peter Gilbert out in Long Island. When Peter Gilbert sold the company to Viacom, he gave each of his managers bonuses as part of the sale. Bob Bilodeau and another gentleman named Mitchell Kleinhandler took their bonuses and used it to buy a franchise in East Orange, New Jersey. From there, they built a system over a period of ten years to encompass not only that one town but all of Essex County and then expanded into all of Union County. When I joined them, there was probably about 200,000 subscribers. When I left, there were over 600,000.

My job there was to interconnect the master headend in East Orange to all of the different communities within those two counties. We did that by AML microwave for the most part. So I was building hub sites all over the area and erecting the towers and dishes to bring in the feeds. It was quite different than climbing poles. Now I'm climbing towers. It was a whole new technology, and AML was really an exciting thing to work with in those days.

PORTER: They didn't have very tall towers in the New York/New Jersey area?

RIKER: I'd say the tallest tower that I had to climb was about 200'.

PORTER: That's a good sized tower. I couldn't climb 20'.

RIKER: One of the first microwave dishes I installed was on the roof of the Gulf & Western Building in New York City. We were linking the local origination feeds from our office over to Gulf & Western, and then sending them out into Long Island. So we ended up having to put a dish on the roof of that building which was over 80 stories tall. Bringing that dish to the top of the roof and then mounting it was quite an exciting chore. When I went to leave, there was an updraft inside the freight shaft. The loading dock was open so air could come in and out. But there was such a strong wind that day when I was at the top floor and tried to go down, we didn't go down. The air was keeping us up. Then when the wind gusts stopped, we dropped about two floors. That was my last time at Gulf & Western.

PORTER: How long did you stay with Suburban?

RIKER: I was there for 2 ½ years. The last thing I did for them was to install a series of seven microwave hops to distribute the New Jersey Nets games. The Nets were a brand new basketball team playing out of Rutgers, New Jersey and we would bring that signal into Madison Square Garden so it could be added to the Sports Network there.

PORTER: Which is now MSN?

RIKER: Madison Square Garden Network.

PORTER: So what happened after ... Why did you leave Suburban?

RIKER: Going back to my music days and having experienced what I did in New York City, I always wanted to go out to California, specifically San Francisco, since I knew Jerry Garcia lived there, and the Jefferson Airplane. I wanted to see the scene there. Plus, I love water and had heard there's no better place to be than San Francisco. So I put my feelers out and was offered jobs at Cox Cable in San Diego and with TCI in San Francisco. I chose the TCI option because I felt San Francisco was going to be less of a culture shock coming from Manhattan, than going to San Diego, even though Cox had a very good operation. I didn't think I was going to be quite up for slowing down to that pace. That turned out to be true. We used to do telethons in the San Francisco area. Where you can get a hamburger at 3:00 AM at almost any place in New York City, even in San Francisco there wasn't one to be found.

PORTER: That was a Viacom system in San Francisco, right?

RIKER: The one I worked for was TCI which served Daly City, Brisbane and Pacifica, along the San Francisco peninsula.

PORTER: So south?

RIKER: Yes. We had the headend up on the San Bruno Mountain, which overlooks the city and also Mount Sutro tower. There was very poor grounding up there because of the fact that we were sitting on a big chunk of rock.

I experienced my first earthquake up there which was quite a thrill. It's a real quick story. We were doing some grounding work up in the headend. We took copper screening and grounded the entire outer shell of the headend because of all the RF interference. We had music playing and the tech that was working with me was dancing around to the music. I thought he was dancing a bit too much and I looked up at him to tell him to stop it. There he was, standing against the wall like this. I realized it wasn't him that causing the floor to shake. It was an actual earthquake. It's quite unusual. It's not like it just shakes. It really shifts, so you go this way and then you go this way, and then you go this way and it finally comes to a stop. That was an experience I will never forget and luckily had not repeated since.

PORTER: Does that have anything to do with you leaving TCI in that area?

RIKER: No. Not at all. I loved the area. Pacifica was just a gorgeous place. It was basically a horse town on the Pacific Ocean, yet you could be in downtown San Francisco in a half hour. So life-style-wise I enjoyed it thoroughly.

One of the biggest problems that I ran into the day I got there, was that Channel 2 had quite a bit of interference in it. So I got my spectrum analyzer up to the headend and started tracking it down. It took about a week, but I finally identified that there was a pager transmitter also located on that mountain that had poor output filters. There were spurious beats outside of its bandpass. So I brought the FCC up there, showed them my equipment, showed them the tests I had performed. They said, "You're absolutely right. It's that pager transmitter right over on the other side of the street here. We'll issue a cease and desist on them until they repair their output filters." So the picture got clean for a day, and I was getting all kinds of recognition throughout the town which had had to live with this interference for years. Then a day later it came back again. I'm sitting there puzzled. How did I misdiagnose this? Come to find out, that transmitter was a medical pager network for all the doctors in the Bay area. Because of that, it was a necessity for life safety and they were allowed to come back on and operate until they got around to fixing the filters.

PORTER: Did they ever get around to fixing them to your knowledge?

RIKER: I departed before that happened. The reason I did depart was Showtime had approached me out there. It was a new division of Viacom. Now that they had just gotten up on the satellite, they wanted to start tearing down the stand-alone playback facilities, which were all over the west coast, and replace them with 10-meter earth stations. So for about a year, my job was to travel along the west coast of the country tearing out studios and replacing them with Scientific Atlanta dishes.

PORTER: Did you ever work with earth stations before they came to you and said, "How 'bout this job?" Or you went to them?

RIKER: No, they came to me and just said, "We need somebody out there to do that. What do you think?"

PORTER: Did you learn by hands on or did you go to SA school?

RIKER: No. The first dish I built was up near Portland, Oregon. I sat down there with a bunch of crates and a bunch of manuals. My boss, Jim Vaughn, came out from New York to give me some assistance. We erected that first dish in a couple of days. Then they decided they didn't want to send me all over the country because they were trying to build these things much faster. So the next time I built one, they decided to videotape my construction process, thinking that then they could send this training tape out to cable operators and say, "Build your own. Here are the plans. Here's the tape. Go for it." Needless to say, that didn't work. So they eventually transformed that video tape into a PR piece to show communities how important this monstrosity of a dish was to their home entertainment value. Dishes being put up the size that they were at the time were not being very well received and considered community eyesores.

PORTER: That would be a daunting task. How many locations? When Showtime came to you and said, "You've got to tear this down and put in an earth station." They had to have a lot of these locations already sold. So this had got to be kind of daunting. You must have had a list a mile long or across the United States.

RIKER: Yes. Well, I was only responsible for the west coast, but that still did not minimize the volume that was out there.

PORTER: And they continued to sell Showtime so now you've got to erect more dishes, right?

RIKER: Right. Two things really happened shortly thereafter. One is that cable operators, the engineering staff and the cable operations themselves got more dish savvy and started being able to build them on their own. Some got SA to actually come out there and help them with that process. Then the other benefit to me was that when my boss, Jim, left New York, they promoted me and brought me back to New York to oversee a whole regional engineering department that would then go out and finish these types of jobs. At that point in time, it wasn't only getting the dish up there, but it was also the fight for channel space and security for the signals.

I don't know if you remember back at the Western Show about 1980 or so, that Showtime came out with what was called "Dual Pay". They had a whole bunch of statistics showing that a cable system could actually continue to bring in even more revenues by offering two competing pay services as opposed to choosing either HBO or Showtime. The technology usually used for the first premium service was a negative trap, where you would trap out the signal to everyone who didn't take it, assuming that the majority (over 50% of the people) would take it. So that's a lot smaller amount of hardware that had to go in. But when you add the second channel of service, its buy rate was going to be significantly lower, so you used positive trap technology, where you only had to put traps onto the drops that took the service.

PORTER: When it was the second pay service, was the first one Showtime and the second one The Movie Channel?

RIKER: At the time it was HBO or Showtime.

PORTER: Oh, I see.

RIKER: The Movie Channel and Cinemax were a few years later. So for some reason, probably because of Viacom's strong presence on the west coast, Showtime seemed to be dominant out there. HBO was dominant in the east. So we became a second pay to the east and HBO became a second pay to the west.

PORTER: Since there was common use of the satellite dish, did HBO send one of their men in to assist you with all this work you were doing for Showtime?

RIKER: If we were coming in to do the first pay service, then it was our responsibility. If we were coming in to add the second pay service, then the dish was already up and running. I assume they felt the same way, coming in on the other end.

PORTER: I just wondered about that. I never knew that HBO and Showtime shared a dish that way. It's interesting. Okay, so now you're doing all this tearing down and putting back up.

RIKER: That was a multi-year project. The other part was really to convince cable operators how to secure the premium signals. So the regional staff not only built the dishes, but also went out and worked with the headend techs and the general manager on how to roll out a second premium service economically. Then came the issue of back yard earth stations. Now we're not talking about the small dish network dishes we have now. We're talking about good size, 6' diameter, back yard earth stations that were coming up mostly in areas that were not served by cable itself. But also, they were coming up in metropolitan areas because they could steal the premium signals for free.

PORTER: Because the signals were unscrambled at that time.

RIKER: Exactly. So that was my next challenge – to research all the different scrambling technologies. General Instrument had one, Scientific Atlanta had one, Leitch Video had one. There were quite a few others that developed different technologies on how to scramble. None of them had been tested over a satellite link. So what I and others would do was test the picture quality at the decoder. We were unsure as to which one would remain most secure.

I remember going to the Texas Cable Show in about 1981 when we were just about ready to roll out scrambling. One of the trade press rePORTERs interviewed me about Showtime's plan to scramble. One of the questions she asked was, "Do you think anybody will try to steal the signal and unscramble the technology?" I said, kind of tongue in cheek, "I bet MIT will make it their class project." That was my first press interview. I've learned since then. As a result, an article comes out the following week that says, "Showtime's RIKER Challenges MIT to Break Its System."

PORTER: So did they? Did you ever hear anything from MIT students? Usually you challenge an engineering school like that, they'll take you up on it.

RIKER: Certainly, you know, the system had been broken. HBO selected Videocipher, which became the industry standard and that's why there's Videocipher II, etc. out there because of needing higher security capabilities.

PORTER: So Videocipher got picked.

RIKER: Yes. HBO made that decision so it kind of became a de-facto.

PORTER: Before we get away from unscrambled signals, I always wondered about something. There were a lot of companies back then that actually sold dishes to poor unsuspecting customers and told them that they would always be able to pick up these channels. Then these companies went to some retirement location, some island, and took all their money with them. Did you ever catch flack from cable customers or people out in the field associating you with that? That was a bad era in telecommunications.

RIKER: It's just that the technology advanced and backyard Earth Stations proliferated faster than we thought. It was really the movie makers who put the pressure on us to scramble. For us, it was a huge investment. We weren't in any real rush to do that. We were still making good money off of the people who were legitimately paying for it. But for the movie producers, they were just watching all of their copyrighted product go out into the sky for free. They were the ones who really wanted to see us scramble and secure their product.

PORTER: I just remember I had a number of relatives who picked on me by saying that the earth station or the dish people sold them dishes and told them, "Buy this dish and these signals are never going to be scrambled. You're always going to be able to pick it up for free." Then when they tried to call the owner of that company back or locate that company, he was always in South America or down in Bermuda. So I just thought I would ask you about it.

RIKER: If the sales person was honest, he'd have said, "Well, they're talking about scrambling so you may someday not be able to continue to steal signals for free using my dish," which is the more accurate way to say it. We really didn't get calls from Earth Station owners because there was plenty of notice scrambling was going to happen. We used to even put warnings on – "You have one month ..." because we could give them a decoder. So unless they wanted to start paying for it, at the subscription price, premium channels became scrambled one by one.

Videocipher came out with not only a headend industrial strength model, but also a home use decoder model, as well. As far as the cable subscribers we had, which of course are loyal customers, were happy to address the fact that they've been screaming about – others being able to steal something that they've been paying for.

PORTER: ... got honest all of a sudden.

RIKER: Exactly. So it really didn't turn out to be that much of a problem for us, except for your relatives.

PORTER: Yes. They complained about it.

RIKER: Then the other one that was a big PR issue for us, and actually still remains to be so, are these ads that you see even in the newspaper of the airline magazines. They would say, "Get cable channels for free." These were not the descramblers that would take the signals off the satellite, but these were boxes that were either manufactured by the industry, got into a refurbished pile, got rebuilt, and then got modified a bit to be able to descramble everything. These worked when signals were being scrambled by the cable system, not scrambled on the satellite.

There were a number of companies that were out there selling boxes that could then steal pay services that were already in the cable systems. They just paid their basic rate and they got everything else for free on top of that. We were getting irate letters. Actually by this time, I had moved on to NCTA. We'll get to that in a second. But we were dealing with cable operators sending us these ads and where they got them from saying, "Can't you do something to stop this? These guys are jumping all over our business." Then you might remember the acronym "COST" – Cable Opposing Signal Theft. It was a coalition ...

PORTER: Of operators?

RIKER: It was a division of NCTA and its goal was to help operators stop theft of signal, whether it be people tinkering with the boxes they were issued by the cable operator or by people buying illegal boxes and bringing them into the cable system. So we created a couple of court cases in that process and fined some of these vendors very heavily. Most of them have gone away. Occasionally you'll see an underground newspaper carry one of those type of ads. I think even that will disappear soon as the industry moves closer towards digital video transmission as opposed to just scrambled analog transmission. Then those boxes will be useless.

PORTER: So how did you get to the second stage of Digicipher?

RIKER: I had left before Digicipher II came on. My dealing with Showtime was through the transition to Earth Stations and then scrambling of the signal for the first time.

PORTER: So you've got all those studios torn down and dishes put up and said, "I want to go do something else"?

RIKER: I don't know if you know Frank Bias. Frank was my mentor at Viacom, a wonderful person. He had asked me to start attending NCTA's Engineering Committee meetings so that Showtime also had a presence there. HBO was already there. Frank kind of represented Viacom and Showtime, and he felt there needed to be two people doing that. So I started attending the NCTA's bi-monthly engineering meetings, and we started dealing with issues such as keeping video quality high and audio levels uniform.

PORTER: Now are you still on the west coast and you've got to go back to Washington, DC to attend these?

RIKER: No. I was back in New York at that time.

PORTER: Oh, you're back in New York now, okay.

RIKER: In 1980, I was promoted and transferred back to New York and had the regional engineering group underneath me after that.

So after attending these engineering committee meetings at NCTA, I got on a number of the satellite transmission committees because there were no standards on the video transmission, no standards on the level of the audio signals. So we, as a fledgling industry, started trying to change that so when you change from satellite channel to another satellite delivered channel, the sound didn't go way up or the picture didn't bloom, whatever. We were very successful in getting the programmers together to kind of set their own standards on how satellite transmissions should be handled.

Because of my involvement in that and in a number of other subcommittees at NCTA, when Wendell Bailey, who was Vice President of Science and Technology at NCTA, created a new position called Director of Engineering, he asked me to assume that role. It was actually a very tough decision whether to leave what I was happy doing at Showtime and going into a non-profit organization down in Washington, D.C. But I was always up for a challenge and this seemed like a great one with a position that hadn't existed before. There was really a great need for imparting more information to the FCC and Congress about the technical capabilities and constraints of our industry because, as you know, we were being regulated very heavily and the broadcasters were lobbying against us very strongly. I was there from 1982 to 1985. During that period, I was involved in the passage of the Cable Act of 1984 due to the lobbying efforts of Wendell, myself and, of course, the entire NCTA staff.

PORTER: Did you find yourself working more with satellite dish problems in that role at the NCTA than you did general cable problems?

RIKER: Actually that's what we ended up dealing with was most of the general cable problems. They included the differences in franchise fees, the differences of how franchises are negotiated, minimum customer service guarantees, signal leakage and pricing. I remember when Jim Mooney was president of the NCTA at the time, he said to the operators, "We got this bill passed, but be careful of your newfound freedom because you're deregulated now. Don't blow it." Sure enough, rates went high, and there was a reregualtion of the industry several years later.

PORTER: So how did you get away from the NCTA?

RIKER: Pretty much the same way I got away from Showtime. I shouldn't say 'got away from' but 'got drawn away from'. At NCTA working with Wendell, SCTE, the Society of Cable Television Engineers, was going through hard times which, you well know having been a charter member of the society. They were looking for a new executive vice president to take over the helm of what was really a much needed, but not very organized society.

Wendell asked me if I would help out as a volunteer in order to keep good relations between NCTA and SCTE. So I started attending SCTE meetings and got involved with the chapters. I remember going to one meeting where they were just thinking about doing a certification program. I went out to the bathroom or something to take a break. I came back, and they said, "Well, we've just elected you head of the certification program, and the first exam we want you to write is about distribution systems, and we want to have it ready by three months from now."

PORTER: Is this part of what turned out to be the BCTE?

RIKER: That's exactly correct, yes. Originally it was going to be called PCTE (Professional Cable Television Engineer) and a lot of the states had a problem with the term PE being a part of it. So we had to go to BCTE (Broadband Cable Telecommunications Engineer – or Technician as the case may be). So I believe because of my involvement as a volunteer with SCTE plus my leadership in rolling out a whole new certification program, .... Tom Gimbel had set the groundwork as far as how the program should be administered, but the role of creating exams fell into my hands. So we started doing that. It was Dave Franklin, who's now with Time Warner Cable, who came and asked if he could put my name into the hat for the new Chief Staff Executive.

PORTER: He was with Comcast then, wasn't he?

RIKER: Adelphia.

PORTER: Adelphia, yes.

RIKER: Then I interviewed with Andy Deveraux, who used to be with American Cable Systems, Tom Polis and Jim Emerson, who was the president at that time. I decided there again, that while I was happy with NCTA and with what I was doing, this is such an opportunity that I could either be a hero or a failure very quickly because the organization was in financial trouble.

PORTER: ... and going bankrupt...

RIKER: Even more so – bankrupter. If I didn't do it and somebody else did, I would always have regretted not taking on the challenge.

PORTER: At that time the headquarters was in Washington, DC. Is that true?

RIKER: It was in Washington, DC when Judy Baer was running it. After she resigned, basically the offices belonged to her, and she had leased them to SCTE so SCTE had no offices. So Tom Polis was kind enough to give us space in his warehouse. Tom and George Tamasi ran a construction company at the time.

PORTER: Plus go over and pick up all the paperwork and all the records.

RIKER: Yes, Tom went down to Washington. They had thought they had staff. It turned out the staff wasn't theirs either. They relocated what there was up to West Chester, Pennsylvania where Tom and George had their business, CCG. And that's where I started.

PORTER: I remember coming to see you and there was just you and ...

RIKER: Teddy Zentz.

PORTER: Teddy, your secretary.

RIKER: It was myself and one secretary, that's correct. We were three months away from the annual SCTE trade show, Cable-Tec Expo, and not one thing had been done in preparation for that meeting.

PORTER: And a staff of two to pick up the pieces.

RIKER: And a staff of two to do it – that's correct. Luckily from my background with Showtime, I had also been involved in trade shows from an exhibitor's point of view so I had some experience in what it takes to do a trade show. But boy, that was a whirl-wind learning experience that was. The previous years, Expo had lost money. We were about $50,000 in debt when I came on and pretty much had to decide at the end of the week, do I pay myself or do I pay FedEx and the phone bill.

PORTER: Or pay nobody.

RIKER: However, after the success of Expo '85, we were able to pay off that debt and at least start our way towards recovery. At that point in time, we had 2,500 members. We were offering basically training as our major member benefit.

PORTER: And I think the dues were still $20 then – a year.

RIKER: They went up to $40 in 1983 so they were $20 up until then. I guess the dues were $20 from '69 on?

PORTER: Yes.

RIKER: So we were still pushing training as what we did best. There were only two regional chapters of the Society at that point in time.

PORTER: Was that in California and Great Lakes or Central?

RIKER: Appalachian Mid America – AMAC was the first.

PORTER: Then they got its name changed, and I don't remember to what. I think the other one was out in California.

RIKER: Golden Gate. As I remember, I believe from you, that there was actually, when you formed the Society back in '69, there was actually regional chapters started back then that disappeared at some point.

PORTER: Yes. I think at one time, when I was in Kansas City, you had to belong. That was the only one. So they put you into a chapter, not recognizing where you lived, but that being the only chapter that you could attend, and ask everybody to start meeting groups. I'm sorry. I don't mean to get into your stuff.

RIKER: No, that's quite all right. You've lived it longer than I have. So you take it from here. Let's turn the cameras around the other way.

PORTER: So you're sitting in CCG's offices and all of a sudden you decide that the SCTE can grow and the SCTE is going to need some growing space.

RIKER: Right. So we moved to a three-office portion of an office building and started there with adding another staff person to do the member newsletters and also to grade the examinations. So now we had a three-person staff. And the three of us planned the following Expo, which was in Phoenix in 1986, if you remember that one.

PORTER: And that was a successful one.

RIKER: That was a very successful one. We actually started with 600 attendees at my first Expo, which was in '85. When I left in 1998, attendance had grown to 10,000. So over that period of about fourteen years, the attendance at that show went from about 600 to 10,000 people.

PORTER: That would be a scary thing to leave the NCTA and a secure job. We're awfully glad that you did do it though, because it really was, as you said, you could become a hero .... You became a hero to the SCTE because you really did bring it around.

RIKER: But there was no guarantee that could happen.

PORTER: Oh, I know. I don't know if I would have done it.

RIKER: I pretty much adopted a philosophy that nothing leaves the building unless it's done properly, even to making a Xerox copy. Because if you're getting materials from the Society and it doesn't look like we really cared too much about how it was prepared, when you get the invoice for your next dues payment, you'll remember those things. So I really wanted to make sure that people realized that the SCTE now was turning into a class act. Apparently we were successful in doing that because membership grew from 2,500 to over 15,000 during that same 14 year period of time. But not without a lot of help and a lot of new innovations on the part of the board of directors of SCTE and the staff itself.

PORTER: Now while you're back there at the SCTE headquarters, you also got involved in the original Cable Center and Museum. Can you tell us a little about that back in Pennsylvania at State College?

RIKER: Sure. That follows suit with my other involvements – you work for one company and they ask you to help out another company and then you end up moving on to that one. So I had started with SCTE in late '84, and in 1986 Marlowe Froke, a Penn State administrator, who was volunteering his time to The Cable Center, asked me to join their board of directors. I believe I was the only technical person who was on there at the time.

PORTER: I think so.

RIKER: I knew nothing about it other than I knew of the Cable TV Pioneers. I knew the Pioneers were behind the creation of this facility, and it was going to be a museum, if you will, that would document the 50-year evolution of the cable industry both from a point of view of technology and how the industry built itself up on business plans financially. It was also going to perform a series of oral histories, similar to what we're doing right now, to get the recollections of those pioneers as to how the business got started. All of this was done with the intent of becoming an educational resource for young people in college who were thinking of cable TV as a career. You couldn't go to school to get a cable TV degree. You could get a broadcasting degree. You could get a communications degree. But myself, and hundreds before me, learned how to work a cable system by climbing poles and that was our education.

PORTER: So as part of that Cable Center and Museum, I know that you also volunteered to build an actual headend at the Cable Center and Museum at State College.

RIKER: Good memory. The drive between SCTE's headquarters near Philadelphia and Penn State's campus in State College, Pennsylvania, was over four hours. One day, driving back from one of the board meetings there, I thought it would be really nice – since we have all this equipment already – that it would be better for students and visitors to understand how a cable system works if they saw an actual cable system working. So I came back and asked the SCTE board of directors if they would allow me to put some time over several months into building a simulated cable system at Penn State – which was supposed to be the future home of The Cable Center. What we did was to paint murals of the homes in the State College area but looking down at them from 22' in the air, which is where cable lines are attached. Then we got AT&T to give us some old telephone poles which we cut in half and mounted them against the wall of this room. I then built a headend. We painted a tower on the wall, and I actually had antennas coming off from that. We also had a couple of racks of headend gear.

Then TCI, who was the operator in the area, came in and helped me run strand and string cable and hook up some amplifiers and power supplies. We actually had drop cables coming off the taps and going right into the wall with one of those feed-throughs as if it were entering the houses that were on the mural.

PORTER: So no matter where we go in the future, you can always have the claim that you built the first demonstration academy and you built the first museum because you had a lot of old gear that was coming in. I don't know whether you distributed or serialized it or whatever, inventoried it. But I know we sent a lot of that through the SCTE, especially the old amplifiers and equipment.

RIKER: That's correct. I was kind of acting as interim curator of equipment for The Cable Center while our relationship at Penn State was going through trouble and before we decided to move to Denver. So we did amass quite a bit. My favorite piece is a television set that was modified by Ed Allen back in the very early days. What they actually had was one of these Philco TVs which was about this big. They drilled a hole and took the speaker out of it and put a volt meter in there and attached that to the AGC of the tuner.

PORTER: So you've just got an open chassis type? So you've got the picture tube and the tester? I think you brought it to one of the shows.

RIKER: I did, yes. To me, that was really something to see how the ingenuity of this industry got started. Of course, there is much more that's so exciting. People who come to The Cable Center will get to see the infamous "coffee can amplifiers" where operators... when the transition from tube amplifiers moved in to transistor, the new amplifiers were either so expensive or unavailable that some people took it upon themselves to get coffee cans and cut them up and actually solder little partitions inside the coffee can to keep one RF stage from interfering with another and mount those up on poles. From what I understand, there were 300 of those things. We could have a whole cable system run by the coffee can amplifiers.

PORTER: Well, being an old cable guy, I mean real cable, my favorite is the display that shows the evolution of cables from ladder line, G-line, all the way through to strip braid to spiral field to today's modern gas injected polyethylene cables. That's my favorite. I really get a kick out of it. Of course, I had a little to do with supplying and time-lining that display, so that's my favorite.

RIKER: The first cable system I worked in used polypropylene cable which worked well unless it got water inside it. Then it basically became a short circuit. Then when I was out in California with TCI, we were just changing out from what was called a "discade" system. Do you remember those?

PORTER: That was Bruce Merrill's Ameco's discade.

RIKER: That's right. Basically it was 10 cables about the size of an RG 6, each carrying Channels 2 and 3, bringing all those cables into the home and having a box that switched between the 10 cables and you got two channels per cable. So it was basically a 20-channel system, a primitive one, but it worked. The only real downside was when that cable got cut, instead of having one large cable to repair, you had 10 of those little guys lying there.

PORTER: The British would recognize this real easy because they had the original version of that and called it rediffusion over in Great Britain. That's actually where Amico, back in the 70's got the idea to do that. I know they put one system in California and they put one system in Arizona, I believe. The only reason I know about it is because I was working for Times Fiber Cable at that time, and we got the contract to make the multiple cables for the system. So you know ... Now you're at the SCTE and you've done all this work at Penn Sate and you find out that 'my creation is going to be transferred'. How did you feel about that? All that work you put into it?

RIKER: Actually I was involved with that whole transitional period. My personal recollection of it was that when we were at Penn State, we were getting opposition from the industry because it was such a difficult location to get to. "Why isn't it in New York?" "Why isn't it in Washington, D.C.?" The Museum of Broadcast and Radio was being built at about that same point in time in New York and companies like Viacom were supporting that because of their broadcast interests. So there wasn't much support for a cable center or a cable museum at that time in Penn State, other than the people in Pennsylvania such as George Barco and Joe Gans and other people who felt that Pennsylvania was really where cable got its big start. It wasn't necessarily the first cable system, but certainly there were a lot of early cable systems in Pennsylvania.

A new chancellor came on board at Penn State and just couldn't quite see the logic of giving up the real estate or how a cable museum would help the academic flow of Penn State. So we had a board meeting and basically decided that this was not going to work. The board at the time was half Penn State academics and half cable operators. We just decided to part ways. But it took about three years to work out all of the logistics of how to separate the project.

PORTER: Did you discuss locations during that meeting? Possible locations?

RIKER: Relocation? Yes. Actually at that time, I was building the new SCTE headquarters in Pennsylvania near Philadelphia. I suggested that maybe we could go jointly and we'll build our headquarters for our needs and on the same piece of land, we'll build the cable museum next door, and share in the economies of construction, staffing, etc. There was a big groundswell to bring it to Washington, DC because part of the reason we wanted to build this facility was to show government regulators what we've done and what we can do in the future, and we wanted to make it easily accessible to them.

PORTER: In addition to C-SPAN's presence in Washington. That's a good spokesman so this would be a second spokesman for the industry.

RIKER: So Washington, DC was the front-runner.
Change of video tape

PORTER: So, once again you had a meeting about The Cable Center. So you know that it's going to be moved and some discussion about Washington, DC, but nothing definite about where the actual location that you're going to move to.

RIKER: Right. There was actually something else going on that caused us not to be in such a rush to choose another location and that was that it took us about three years to negotiate a break-away agreement with Penn State because money had been donated by the Pioneers to create academic programs at Penn State and money toward a building fund as well as all the archival material that were being held there.

Mike Rigas at Adelphia worked tirelessly to work out an agreement that was amenable to Penn State as well as getting us what we really needed. Ultimately, what we decided to do was to duplicate a lot of the materials so it could reside at Penn State and we could get the originals back to our new location – wherever that might be.

PORTER: So to vacate though, it took about three years.

RIKER: Yes. Then at that critical time, Bill Daniels came to our rescue. He said, "I'll tell you what. I'll give you $1,000,000 to help you in this transition process if you bring The Cable Center to my favorite university." And that was the University of Denver. So that was quite a compelling argument since we would probably not have been able to move anywhere without some transition money. So we started pursuing that direction. Then Chancellor Ritchie, who used to be chairman of Westinghouse ...

PORTER: Group W.

RIKER: ... and Westinghouse owned a number of cable systems called Group W Cable, and the president of Group W Cable was none other than Bill Bresnan. Bill Bresnan was now the chairman of The Cable Center. So between Dan Ritchie, Bill Bresnan, and Bill Daniels, the three of them got together and worked out a deal to bring The Center to the University of Denver. Chancellor Ritchie promised support of operations as well as academic involvement in the moving forward of The Center, Bill Daniels funded the interim process, and Bill Bresnan oversaw the activities as chairman of the board. That worked out very well.

I remember the day that it was all finally agreed upon. Frank Drendel from CommScope has a fleet of trucks to deliver his cable all over the country. It became more economical for him to have his own transportation division as opposed to hiring trucking companies. So when he goes out some place and delivers the reels of cable, he'll usually back haul some sort of freight. He was nice enough, in our case, to help us move the equipment from Penn State out to Denver to some warehouses out here where they will stay until we move in about one year from now.

PORTER: Immediately after the decision was made that you would accept Bill Daniels' funds and look toward moving to DU, I believe Marlowe Froke came on out to Denver even though there were no real facilities at that time. He sort of acted as lead man.

RIKER: Yes. Marlowe, who was lead man back at Penn State as well, had retired from Penn State University and had offered to volunteer his time for a number of years to see that transition through. Once the equipment got moved out to Denver, which was about 1995, he was then brought on as acting president and then ultimately president to oversee the start-up and resurgence of the project.

PORTER: And he had a temporary office, I believe, down on South Josephine.

RIKER: Correct. It was actually in an old sorority house. So the biggest challenge first off was to locate a second restroom facility because there was only one in the building for the women who lived in the sorority house. So we had to build a second bathroom as part of the deal of moving into that space. And at that point he started out to expand the staff. He brought on Beverly O'Brien as director of development, Sharon Fritz was his office coordinator and executive assistant, Chris Wera came on as financial officer, and ultimately I came on as vice president of operations and engineering – although that decision did not happen easily.

PORTER: Even before you get to that. Bev was brought on and immediately started working in harmony with Marlowe's efforts, basically to get money, to get donations.

RIKER: That was her job and she was good at it. What we did was conduct some focus groups at the Western Show as we were trying to make this transition. The leaders of our industry proved themselves to be leaders of the industry because they came in and said, "I'm not going to give money to create a shrine for myself. We've done a lot of wonderful things in this business. We haven't promoted ourselves very well as to the impact we've made on society. But more importantly what we want to do is to make the public aware of the future capabilities of broadband technology and hopefully interest people at the college level to go into a career in cable television because we do need to train the leaders of tomorrow."

So as a result of this 3-day focus group at the Western Show, all of a sudden we were no longer building a cable museum. It became The National Cable Television Center and Museum, and the museum ended up going in the lower level and the academic portion was the link with the university: programs for distance education, programs for educating the public, programs for educating franchise officials and government legislators about what we have accomplished and our impact on society.

You look back and some of the exhibits we have in the building .... One is Cable and Information. Two quick examples that come to mind are 24-hour news. It never happened before the cable industry was around. The other one is C-SPAN. It was the first time we ever got a true look into the workings of our government. This is information that would never have been available without cable. Another exhibit is Cable and Entertainment. Now you can watch the Golf Channel, the Garden Network, the Food Channel, all these niche programming would never have survived in a broadcast world because you cater to the lowest common denominator and such programs were not economically affordable to a broadcaster.

So the wealth of entertainment that is now available and the diversity of entertainment available to the public is so strong compared to the old network days that we are erecting a video wall inside the entrance to The Cable Center to show the diversity of programming. It's going to have about 98 television screens, all simultaneously showing live feeds of different programs that are available over cable at this point.

PORTER: So while we wanted to commemorate our past, as an industry, we wanted to accentuate the possibilities of the future. So that was the two-prong, basic goal of The National Cable Television Center and Museum.

RIKER: Yes. And the other goal was to become the world's largest repository of cable and telecommunications information in the world. We're collecting documents from franchise hearings, all the testimony in front of Congress that the cable industry has made so that people who are doing research on the history of cable television will find the most complete database in the world at The Cable Center. It not only includes documents, but also programming. I believe at this point in time, we're up to about 3,000 titles of cable programming that would be available for review by students or the public. We hope to bring that close to 100,000 titles as we move forward.

PORTER: I've been invited to some of the board meetings and sat on some of the committees. Sometimes I think that the people who are just asked to donate money are getting the easy way out. I noticed how many various meetings that take up the people's time who are really trying to plan and bring this to fruition. They're really giving a lot more than just giving money. Do you have any feelings about that? I know that in your own staff, Marvin Jones has come over and given of his time to get his thing going. But there's a lot of hard work that's going into this. I think the people out in the industry don't realize that it's a 24/7. It's not a 12-hour job or an 8-hour job. You guys are working almost continuously. The minute you leave one meeting about the actual building itself, you're into another meeting about the museum or you're into another meeting about .... I don't think they really realize how .... There's a lot of hectic .... I'm worried about your getting gray-headed a lot quicker, Bill.

RIKER: Well, your description is very accurate. As an example, this week alone, other than meetings, I have about only two hours to myself in my office to do the rest of my job. I had 60 e-mails sitting on my computer this morning. So there's a lot to be done right now. We've got one year left to do it as the building is scheduled to open in late 2001. We've got to get exhibits in place. We've got to get the archival systems in place, the library. We'll have five theaters in the building, each showing different aspects of cable's impact on society, a distance learning studio capable of sending classes from DU directly to other universities around the country by a live uplink through AT&T. There's just a wealth of educational programs that we plan to offer from the building, and we've got one year to get all those pieces together.

PORTER: Pretty hi-tech, multimedia stuff. I know we were talking about as people move almost like a Disney World application, so that as they move to different areas, they'll start different programs.

RIKER: There's quite a bit of interactivity. On the Heritage Walk, that's the walkway that depicts the 50 year history of the industry. One side discusses the events that were important in cable's evolution. The other side talks about the people who were instrumental in effecting those changes.

PORTER: How does it feel to just come off ... This seems like no time ago you took us to a building at the SCTE when even some of the board members said, "You've got to be real careful. We don't have a lot of money, and we can't afford that building." And you brought it to fruition. You came to us and asked us for building fund money. You went out and promoted the benefits of such a facility. The location that the SCTE is in now is a very lucrative business center. I don't think the SCTE will ever do anything except make money if they decided to ever vacate that premises. It's in a business center, as you well know. So you showed a lot of foresight. How does it feel to come out, just come away from putting the SCTE into their own building – from buying the land to designing and constructing a new facility – to give that up and here you are faced with the task of building what is going to be a very modern beautiful cable center and museum building. How does that feel? How did it strike you that, "Oops, here we ... Deja vous, we're starting all over again."

RIKER: Well after 15 years with SCTE, I felt that a lot of my original vision had been accomplished. I had a ten-year plan when I got there. That ten year plan included certification programs, the international outreach, the explosion of chapters, of which when I left, we had 75 chapters around the country. If you were to add up the number of meetings they have within a year for each chapter, basically every day of the year there is a classroom session going on somewhere in the country that is sponsored by the Society.

The one area that I did not envision in 1984 was technical standards, and that's become probably the strongest part of the society at this point in time. I was certainly involved with the development of the standards process, but that wasn't part of my first ten-year plan. That became the last five years of my work there. But I felt that it was time for some new ideas, some new blood to come in there and take it to the next level. But on a more personal level, I felt that I was ready for another challenge. The Cable Center is one that I had already been working on since 1986.

PORTER: Hadn't had enough already?

RIKER: I guess I'm a glutton for punishment. I'd like to tell you, as well as very many other people in our industry that this was a project that I'd been involved with since 1986, and it was something that I deeply believed in. Myself and Yolanda Barco, who recently passed away, she and I used to have lengthy discussions on making sure that the vision of the Pioneers translated through to the full operation of The Center, while also taking into account the wishes of the donors – which was more focused on education and less history. They'd been asking me to get involved with The Center as an employee for a number of years. Just when CableLabs first started out, Dick Green called me. He said, "You're the first person that I'm calling to ask if you'd like to come to work for us." Dick and I had worked together in Washington, DC for a number of years prior.

PORTER: He and I worked together at Times Wire.

RIKER: Yes, that's right. Then I worked with him on the Advanced Television Systems Committee, ATSC. Then he went on to PBS and back into cable. I just wasn't ready for uprooting my family at that point in time. Then they asked me to come out and do this job with The Cable Center. I still was kind of hemming and hawing about it. Then Dick Green and Marlowe Froke got together and said, "Listen, we'll make you a joint offer. We both want you. So why don't you come out and work, part-time for The Cable Center and part-time for CableLabs." That, plus the fact that Bev O'Brien and Marlowe Froke had recently raised $50,000,000 toward the project when, for the first ten years they'd only gotten up to $1,000,000, convinced me this was going to be a viable project. Once again, I felt if I wasn't the one to do it, somebody else would, and I'd always wish that it should have been me.

PORTER: The building's come a long ways now.

RIKER: It has.

PORTER: You're going to moving from the outside to the inside. What does it look like to you? You've got to take great pride just to drive down I-25 and look over and see it now. It's a building – it's not a steel skeleton like it was for a little while. You're coming to the finishing stages.

RIKER: When I first took the position back in 1998, my job description was basically to take care of all of the technical equipment inside the building – to procure it, to design it, to install it, and to operate it. Soon after I came on board, we realized that the building design itself needed a lot of work. Mainly because the architect and the consultants and the exhibit designer and the audio/visual designers were not really coordinating. They were kind of designing their own things that didn't necessarily mate with each other. The board asked me to take that issue on as well. So my first year on this project was to redesign the entire building and make it functional.

After doing that, I'm now back on to the Telecommunications Equipment Campaign which is an effort to get cable vendors to donate equipment that will be showcased in probably one of the most visible venues in our industry, as well as help us operate the facility. There's going to be a full RF distribution system to all the rooms and throughout the building. Exhibitory – we have over 200 screens of all different types throughout the building offering interactive requests for information, showing videos about the industry, and biographies about the major players. Then, as I said, in the studio itself we'll be able to emanate programming and transmit it around the world. There's just so much infrastructure and technology to go into that, and that is where my focus is today.

PORTER: When do you think... You're not at the point where you're putting electrical wiring and so forth ...

RIKER: Electrical is going in. Conduits are going in. CommScope, as well as Trilogy and some other companies, have been kind enough to donate all the cable that we need. So with the conduits in, at some point – probably early 2001 – we'll be running all that cable.

PORTER: So you've got RF cable and fiber – all the latest technology?

RIKER: Fiber, RF, enhanced category 5, triax (which is camera cable) because even though we have the distance learning studio in one location, if we wanted to video tape a program that was going on in the Great Hall, we'd just roll the cameras into the Great Hall and plug them into the wall and they go right back to the control room. We can do inside remotes very easily.

PORTER: Other than more cash, other than more money donations, what's your biggest concern as far as equipment, getting equipment in?

RIKER: The one flaw to our business plan was we expected to get all of the equipment for free. As I said, the hardware vendors in our industry have just been wonderful coming through with anything we need that is related to their business. But when it comes to the television studio or the 100 flat screen plasma monitors that we're looking for, companies like Sony and Panasonic are not predisposed to give that stuff away. So we are working on a deep discount arrangement with them for that equipment. But we will need additional funding just to support the equipment that we cannot get donated completely for free.

PORTER: When you get it donated, if you were to get it donated from them, of course we'd give them good exposure. We'd make sure that they were acknowledged donors to our Cable Center and Museum.

RIKER: Absolutely. And the three areas that any contributor of any equipment will be listed are: their name etched in the doors of the headend; they will also be downstairs in the Great Hall on what we call the Contributors Honor Roll, an interactive scrolling mechanism for identifying all the companies and what they gave; and thirdly they would be on our Honor Roll on the web site so that people who aren't able to visit The Center will know what companies participated and what they donated.

PORTER: And you're going to etch some image of poor Dave Willis, who has given all this help all these years putting all this electronic gear, cataloging it, sorting it. I just wanted to say on this interview that I personally know he's made a lot of effort to make sure that people understand this old equipment that they're going to come through and look at. For a technician or an engineer from out in the field, it's kind of fun to see that archaic old stuff, especially tube-type stuff and what it looked like back in those days.

RIKER: For your first question, I think we're going to have a bronze statue of Dave so he'll be standing there holding this ...

PORTER: "The Lineman of the Ages."

RIKER: Right. In addition to just having this equipment being on display on shelving, what we plan to do on probably a rotation basis will be to have a glass showcase area and we would feature: "The Evolution of Set-Top Boxes Over the Years". Then you basically start off with an A/B switch to choose from cable A or cable B, go to the discade box, go to the old dial style, to the remote control versions, and all the way up to the modern digital set-top boxes which are capable of decoding digital signals and interaction through modems, etc.

PORTER: If you had one thing to say to the industry as far as help in the future, what would you say to the industry for The Cable Center and Museum?

RIKER: As far as what we need in the way of help?

PORTER: Yes.

RIKER: Well, certainly the immediate need is still support. As I said, the equipment manufacturers have been wonderful with their support of in-kind equipment. The leaders of our industry have been very generous with monetary support. But we have not yet launched campaigns for corporate memberships which would be for programmers and vendors as well as MSOs. We even have an individual share plan that we're going to be rolling out at this year's Western Show where individuals can buy a share of stock in The Cable Center for $100. So ownership is designed to go all the way from the million dollar donations that we've received from some benefactors all the way down to $100 from people who are comfortable giving at that level. We want them all to feel that this is their alma mater. It's going to be preserving their history, and they can take their kids there and show them 'this is what I used to do, this is the equipment I used to work on.'

This middle area right now is where we really need to focus upon – to get corporations to come in and say, "Yes, I want to be a member of The Cable Center, not only so that I can say that I support this project, but take advantage of the other facilities that are available to us." We have a 200-seat indoor theater, state-of-the-art. We have a Great Hall that will seat 200 for a sit-down dinner or 300 for a reception. We have a Board room and several break-out rooms. Corporations who are based in Denver or just visiting Denver, could arrange to use this space in the building. We want to see this facility as active and busy as possible.

I also envision quite a bit of grade school activity as you've probably seen since you've been out here in Denver. Denver loves educational venues. My daughter has already been to every museum in the Denver area at least three times each.

PORTER: Got some great museums here, too.

RIKER: Yes, they do. I believe that The Cable Center will be another great destination for children because of its interactivity and its hands-on type of approach. It's designed to be a living museum. In fact, the art work within the building are plasma screens instead of paintings. The content of those plasma screens is being dictated by DU's School of Art. So you might walk into the building one day and see Renoirs on the wall. You walk in the next day and see Picassos. Everything is designed to keep pace with technology. We want to be constantly at the forefront of what's going on at all different levels of The Center itself.

PORTER: Do you expect to do anything with the schools as far as training, giving educational programs maybe emanating out? Has there been any thought to that, Bill?

RIKER: Absolutely. Unfortunately, Bob Magness passed away before he was able to make a major donation to The Center. However, John Malone and several of Bob's other close friends and business associates got together and raised enough money to name an educational institution in Bob Magness's name. It is called the Magness Institute. That is the real educational outreach of The Center. It will encompass seminars, both for the industry or about the industry, in addition to distance learning education. We hope to have affiliations with at least one university in each state for a minimum of 50 that we'd be able to downlink our educational classes with a data and audio return for Q&A and interacting with laptops. What's really going to be the major focus of The Center is education.

PORTER: And you'll have uplink/downlink capabilities to take these nationwide or worldwide before it's over with.

RIKER: Right. AT&T is supplying us with a fiber feed from its headend. That will be giving us upwards of 250 channels coming into the building for us to use on the video tower. Then we will have a return line from here to their uplink at the Digital Media Center for the distance learning studio. Then just as backup, we put two satellite earth stations on the back side of the building so in case something goes down or we want to downlink something that's not on the AT&T feed, we'll have that capability as well.

PORTER: And I understand the Barco Library itself, as a library, is going to have one of the greatest collections of not only legal papers and legal books dealing with the telecommunications industry over the history of its life, but that it will also be made available for research to legal types and schools. So you should have a pretty good influx of people in and out of Barco Library on a regular basis?

RIKER: Yes. And we are actually having a fiber link tied between The Cable Center's Barco Library, the University of Denver's Penrose Library, and several other university libraries across the country such as the University of Colorado and other facilities. So when you look up information on something, if we don't happen to have it at the Barco Library, we can tell you where you can find it elsewhere. The Penrose Library has been operating to support the DU School of Mass Communications for many years, and we have a joint management agreement with them for the Barco Library so that they're doing all the cataloging for us and integrating it into this large database from a number of university libraries.

PORTER: I've seen some of the unique planning that's gone on. I know you guys need time to plan and time to work. I've been surprised. I think what's unique about the planning that you've done is that you've separated the activities within The Center so that a multiplicity of activities can be going on for a multiplicity of audiences. They can come and see if their interest lies with old equipment or historic equipment. They can come and go. They're welcome to see all of The Cable Center and Museum. But if they have a unique or strategic interest in coming, they can go as soon as they've seen what they wanted to see, study it, leave, come back at another time. So you've planned the use of The Cable Center and Museum to its fullest, it seems.

RIKER: Right. There's a number of different divisions or departments, if you will. The Barco Library is one. It has printed matter, a traditional library style with bookshelves, and current periodicals. Actually we have made up annual books of cable trade magazines all the way from the beginning of that particular magazine's history. Then we also have the electronic database that is tied to the other universities, and we have computer workstations to access them. The third area of the Barco Library will be video viewing stations where people can access classic cable programming from the archives that we have as well. So the library itself, is multi-faceted.

PORTER: ... and oral and video histories such as this one ...

RIKER: ... will be part of that

PORTER: ... of all of the cable pioneers that people want to learn about.

RIKER: And the histories such as this one will be available on video, printed transcripts and also on our web site. The interviews that we're conducting can be made available to a wide variety of people through a number of different formats.

PORTER: Now I'm going to ask you something that you didn't expect me to ask you about.

RIKER: I'm expecting that's the end of the questions.

PORTER: Looking into, not in your future because you've got your hands full just bringing such a great idea like this to fruition. But I'm looking down years and I'm looking at the association between Denver University and The Cable Center and Museum. Something that you brought up quite awhile back in this interview – you brought up the fact that there's no one educational facility to teach us what we need to know as broadband engineers today, especially as cable engineers. One of the things that the broadband industry faces today is that even if they go out and reach for a chief technical officer who has an electrical engineering degree - or he may have a mechanical engineering degree or he may have any of a number of engineering degrees – but there is no broadband engineering degree. I've always felt like there should be one. I know that DU a different type of university, and it's reaching out to do different things. I can't think of a better plan in the future than for DU to come up with a curriculum that would allow an engineer to graduate with a broadband engineering degree, especially being set in the center of the United States on a campus that's very close to The Cable Center. It's also very close to the satellite companies.

RIKER: EchoStar.

PORTER: It's very close to digital television centers. We have one of the nicest ones right here in Denver – AT&T's digital center. We have all the facilities here to send these people in a split curriculum so they could come into the classroom for a certain amount of time and almost as in the old days, when you had to learn a trade by doing it, send these students out. Maybe they've finished the first two years in a regular curriculum. But their junior and senior year is a mixture of training in the classroom and training by actually doing it. I would like to see the future of what you're doing today lead to something like that. I can see companies like the computer companies, the telephone industry as we see it today, the broadband industry, all lining up to take the first class of these guys that come out because you have an engineer that you don't have to retrain .... That's one of the problems that we have today with the engineers in the broadband industries – we have to retrain them. They learn fixed frequency. They don't learn how to sweep anything. There is no curriculum at any university, including MIT that you mentioned, that trains a broadband engineer to be a broadband engineer. This is not my interview - it's yours. But as somebody who's doing something so important, I hate to see it fall short. As a matter of fact, I'm writing a white paper about it – a call for broadband engineering degrees. If the aeronautical industry and the chemical industry and all those industries can decide that they have a need for an engineer, trained a certain way, I can't think of anything more important in the future, as we see it today, than telecommunications and broadband communications worldwide. I'd like to see that. What do you think of the possibilities of that ever happening, Bill?

RIKER: Well, first of all I think it was a good idea we put another half hour tape into this machine here! One of the first examples of doing something like this was made possible by a grant from John Sie. We brought in six regulatory officials, also heads of the Chinese broadcasting consortium, to DU and they went through a very extensive multi-week course being taught by both the Institute as well as professors from the University of Denver. It was a very intensive class, lots of homework. They all did very well learning about the business of our industry. Then we sent them on the road for two weeks and took them to New York and showed them Time Warner. We took them to Washington and showed them C-SPAN, out to Los Angeles and looked at some AT&T operations out there. It was very well received, very successful, and something we plan to do on an annual basis, eventually with different countries as we rotate around. As far as the technical side, and coming from an engineering background and my tenure at SCTE, I couldn't agree with you more as far as educating technical people to the level that we are right now trying to educate the business side of the industry. But the decision at this point in time by the Board of Directors is that there's NCTI and there's SCTE that are addressing these issues to some extent. Where the real goal in their eyes is in building strong executives and strong managers, and that's where they would like to see us focus. Now, in the future, they would like us to branch out to encompass some of the other disciplines within the industry. So I think your wishes will come true through The Center. But because, as you said, there's so many things on our plate, we've pretty much decided to focus on smaller chunks at a time, especially the ones that the donors feel are most important for the current evolution of the industry.

PORTER: The only reason that I brought it up was that I believe in it, and I think you do too. But it's nice to know that there is a view - a view that board of director members and staff looks farther than the completion of that building and what goes inside it. You can see a goal of making the future teach. The future has a continuing goal for The Cable Center and Museum, and anybody that's involved in giving time, money, equipment – somewhere down the line they're going to train tomorrow's engineers even better than we did.

RIKER: Right.

PORTER: It makes me feel good to know that we're not just building a building and we're through once all the equipment goes in and traffic starts coming through it. We've got a much greater goal than that.

RIKER: Absolutely. We've recently broken up our organizational staff chart into two areas – one is operations and one is programming. The operations people are the ones that make the programs possible. In other words, the programming folks are the educators and the researchers and the archivists. But the operations folks are the ones who make the building run and give them the tools to do their job. I think that's going to work out very well. Both Marvin Jones and Cox Cable have given funds to develop programs geared toward customer service. I'm sure that you'll agree that's another area that's really been lacking attention as far as a focus in our business.

PORTER: Absolutely.

RIKER: Years ago, the way I look at it, cable television was an entertainment vehicle. It was not a necessity. So if you were without your Channel 3 or even your HBO for a night, it wasn't the end of the world. These days, I bet if you polled the average consumer and said, "Which would you rather be without for an evening – your cable or your telephone?" they'd choose to be without the telephone even though the telephone could save their lives in an emergency. Cable's more important to them. So our whole industry has to take on a new mindset that we are now a necessity to the consumer and no longer a luxury, especially as we start to deliver telephone and data over our networks. Then we need to have the reliability to compete with the phone companies. Along with that comes the customer service end because without the customer service side as well as, of course, the technical people to make it operate, it would be hard to convince people that switching to an all broadband network for all their services is a good option.

PORTER: All the necessities bundled into one.

RIKER: And then you might also have heard of the Jerry Levin contribution just a few weeks ago. That is going to be used to create yet another academic chair based in The Center, again affiliated with the University of Denver, to educate students about how cable programming has had such an important impact on society. Also part of that funding will go toward the restoration and archival process of classic made-for-cable programming.

PORTER: Sounds like you're moving at full steam ahead, though.

RIKER: Double that.

PORTER: We appreciate you taking the time for this interview.

RIKER: Thank you for inviting me.

PORTER: I'm sure the Barco Library and The Cable Center and Museum appreciate it too. Thank you, Bill.

RIKER: Thank you.

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  BACK TO ORAL HISTORIES

John Rigas

John Rigas

Interview Date: Wednesday October 11, 1989
Interview Location: Coudersport, PA
Interviewer: E. Stratford Smith
Collection: Penn State Collection
Note: Audio Only

SMITH: This is October 11, 1989 and we're commencing the oral history interview of John Rigas, Chief Executive Officer and President of Adelphia Communications. This is Tape 1, Side A. John would you mind stating your name for the record?

RIGAS: My name is John Rigas, John J. Rigas, the J. stands for James. I was named after my father, which was a Greek tradition that the oldest son is named after the grandfather.

SMITH: John, we want to go as extensively into your background as you are comfortable and, if you don't mind, would you tell us when and where you were born?

RIGAS: I was born in Wellsville, New York which is located in the southwestern corner of New York state, population approximately 7500 people, on November 14, 1924.

SMITH: You mentioned that you were of Greek parentage. You were born in this country, were your parent's immigrants or were they also...

RIGAS: My parents were immigrants, and my father came over at the age of 18 from a village in the central part of Greece called Arachova, which is way up in the mountains. The elevation was approximately 5500 feet. The village was the last village on that mountain. He came to America and over a period of years worked on the railroad and eventually tried a small theater in which he lost some money. Then he later on opened up a billiard and had locking processing cleaning establishment. Anyway, in 1920 he went to Wellsville and he opened up a restaurant as all good Greeks should open and do. The restaurant is still in existence. It's managed and run by my brother and now his son is still managing. The name of it is the "Texas Hot" which in those days primarily specialized in hot food with a chili sauce, but over a period of years it has evolved into an institution where they have a lot of short order sandwiches and meals and it's really a big part of my heritage and my family. I was born over the restaurant.

My dad in 1922 married my mother who came from the same village. It was one of those marriages that was arranged in that he wrote back to his brother and said, "It's time for me to get married and who would you suggest." My uncle in the village had suggested my mother and they talked it over and my mother knew my dad's background and family, he liked the picture, and so they came to this country and got married over the restaurant.

SMITH: And your mother did not actually know your father prior to the time she got on the boat, is that right?

RIGAS: Well, she just knew him by his reputation.

SMITH: That's interesting. What was your mother's name before she married your father?

RIGAS: Eleni Brazas. My mother is presently still living and she is 88 years old. She has moved back over the restaurant and it's really a joy to go back to my hometown and of course, be part of the restaurant and seeing my mother and visiting with her.

SMITH: What sort of educational background did your parents have?

RIGAS: Well, essentially, they had the traditional background in those days. The country was very poor, going through a number of wars and that's why so many of the people had migrated to America for opportunities and essentially to just do something better for their families. My parent's education would be an equivalent to what we call third grade. I think the education was a little different. But by the time they were twelve years old, their formal education was over. They went to sheep herding and whatever was necessary to pitch in and do their share in the family life in the small village.

SMITH: Had your father seen a picture of his future bride before she came over? You mentioned that she liked the picture and knew the family; did he have any prior introduction to what your mother would be like?

RIGAS: Actually, no. I asked him that. He never had seen the picture of his future bride; he just took good faith his brother's recommendation and saw the first introduction although there was a ten year difference. My father left when he was 17 or 18 and so therefore my mother eight years old and she could just vaguely remember when he left the village. You know there was a big farewell party, etc. The first time they really got to know each other was when he greeted her when she got off the boat.

SMITH: Was that at Ellis Island?

RIGAS: No, it was in Boston. My wife arrived in Harvard, Boston. She was supposed to arrive at Ellis Island but they reverted it to Boston because there were so many immigrants coming in and they were overloaded, so she came to Boston.

SMITH: And your father had gone up there to meet her.

RIGAS: Yes.

SMITH: And they want home and got married, is that it? How did it work?

RIGAS: Yes, what they did is they had a civil marriage in Boston. They had some acquaintances in Boston that were first and second cousins that greeted my mother. She stayed with them one or two days and then they took the train back to Wellsville. My dad had the apartment over the restaurant and was sharing that with another couple and two of their children which were from the village. The following week they had the church wedding and all of that that went with it.

SMITH: How long did the other couple and children stay in the apartment?

RIGAS: Well I was born and my sister was born. They stayed there another three years and they had found another apartment vacant next to the restaurant and moved into that.

SMITH: Did they have an interest in the restaurant with your father?

RIGAS: Yes, they did. My father began the restaurant and about a year later they had worked together in Johnsonburg, Pennsylvania and Mr. Raptis had asked if they ever had an opportunity if he'd be interested. So my dad thought he needed some support, needed a partner and so he called him in Wellsville and they joined a partnership and they stayed partners up to the age that each one passed away ‑ some 60 years later.

SMITH: You mentioned the gentleman's name.

RIGAS: George Raptis.

SMITH: You've mentioned a sister and you've mentioned a brother. Could you tell us what their names are?

RIGAS: Sure. I was the oldest in the family and then my sister Katherine was number two and then my brother Constantine which everybody called "Gus." The translation happened when they came off the boat. I guess somebody said well, Constantine is too difficult to spell, nobody would understand it in those days, so they called the Constantine's Gus. Very strange translation. All Constantines, so many of them became Gus's. Then I have a sister Mary.

SMITH: Oh, you have two sisters.

RIGAS: Katherine and Mary and one brother Gus.

SMITH: Are your sisters living?

RIGAS: Both sisters are living.

SMITH: Where are they at?

RIGAS: Katherine lives in Chattanooga, Tennessee and married a doctor. Dr. William Palace, who later on had developed some interest with my efforts in cable television as an investment. He ended up selling his system to Xavier Cugat.

SMITH: The entertainer, the band leader?

RIGAS: Yes. I've got to check that out because I've got a feeling. I'm pretty sure it was. Abby Lane?

SMITH: Abby Lane was married to Xavier Cugat.

RIGAS: Ok, so I was right. Anyway, he was an OBY specialist and he's presently is in Chattanooga. Katherine is still alive. My brother Gus came back after college and he continued on with the restaurant and did a marvelous job of developing it and studying its reputation. In 1955 he and I joined into a business where we obtained the franchise and we had a business relationship up until '81 or '82 at which time we decided to do other things to cash in. That in turn leads to the name Adelphia which maybe won't fit in, but you can sort it all out when we're finished, when we're talking about later on when we put some of our systems together, we're trying to think of a name. I suggested, why don't we use the Greek word for brothers which is Adelphia so that accounts for Adelphia Communications and now it's even more appropriate because my three sons are involved with the business and the name fits pretty well. My sister Mary lives in Olean, New York which is 30 miles away from Wellsville; it's where St. Bonaventure is located. She has a restaurant with her husband.

SMITH: The restaurant business just kind of runs in the family, doesn't it?

RIGAS: Well, to me, you know, sure restaurants have a lot of nostalgia, but it means an awful lot, just going back to my hometown which is 30 miles away from where I presently live to see a lot of my classmates who are really customers that we grew up with. It's just a great relationship. I find that over a period of years I probably do my best business in restaurants where I can hear the dishes clanging and the orders barking in the background. Sometimes I get in an office and it's much too peaceful and too quiet for me to concentrate.

SMITH: As the interviewer, John, I'm not supposed to do too much talking, you're the man to talk, but I simply have to let it get on the record the last time I talked to you on the telephone, I reached you at a restaurant where you had a telephone on your table. Do you conduct a lot of business from the restaurant, do you?

RIGAS: I really do. It's interesting. I start my day in a restaurant, 6:30 ‑ 7:00. I find the restaurants ‑ some are busy, some are not. I feel more comfortable that way. I don't know. People maybe can't search me out as much in restaurants. When I get into the office there are all kinds of interruptions, so I do a lot of business. Later on, and when I think about it, I've got to tell you how once when Milton Shapp was making an offer to buy one of our cable properties, my brother Gus was working over the grill and I was standing there by the grill. In the background it would be," one hot beef, two hots without onions" and Milt Shapp finally said, "What the hell is going on down there?" I'll elaborate on that later on.

SMITH: John, I had the pleasure of visiting last night and meeting your wife Doris who I don't think I had met earlier, if I had it was just in passing. When were you and Doris married? Give us a little background on that meeting.

RIGAS: Well, I first met Doris on a blind date in college and we dated perhaps two or three times, but nothing very steady. She also dated a couple of my fraternity brothers, so we'd see each other, particularly when she was a senior and I was a junior. I had spent three years in the service so she was attending Albany State University and I was attending Rensselaer Polytechnical Institute. When she graduated she accepted a position in my hometown of Wellsville teaching. Teaching English. When I came back after my graduation, we began to see each other on a more regular basis and on February 1, 1953, we married.

SMITH: Is Doris also of Greek ethnic background?

RIGAS: No, her parents both were immigrants from Denmark. So her background is Danish and that's a pretty good mix because the Greek king was Constantine and he married a Danish princess and we always thought that was a pretty good follow-up. But we always joke about it. I put on my fraternity house bulletin board, little clippings from the local paper, that Doris Nielsen, that was her maiden name, had accepted a position teaching in Wellsville and I facetiously put on, "Well, obviously she's trying to trap me, and she followed me to Wellsville." It was just kind of a joke but as it turns out we did meet and match.

SMITH: And frat men or not, it was ok.

RIGAS: Turned out real well. Going back to my hometown of Wellsville, which obviously has meant a lot and meant much to the family, it was a great community to grow up in. I had a wonderful childhood and as I went through high school although I wasn't very large, I enjoyed a lot of great popularity with my fellow classmates, played a lot of the sports and for all that I was thankful and got an awful lot of support from the storekeepers on Main Street that we grew up on and were very sympathetic because my playground was essentially the alleys and the main street. There were five other Greek families and we became very close and the childhood memories and growing up together. You either had a confectionary store or a restaurant.

When I was growing up I went to Greek school. After your regular school was out, we had to go to classes from 4:00 to 6:00 and learn our Greek and then Saturday mornings was classes from 9‑12 which were reveled and hated but I look back on them as a wonderful thing.

SMITH: Was this your family's effort to preserve your heritage, make certain that you didn't get too Americanized?

RIGAS: Exactly. Because initially it was a strong tie back to the homeland and with the idea that perhaps they would be going back. But, at least if they didn't, it was important that we understood the culture and the language and I think that has been an important part of my life too and I think that's been great. Most Greeks were Greek Orthodox, 99.9% of them belonged to that and the Church had a big influence keeping the community together and that kind of background too.

SMITH: You mentioned that you were quite active in sports, as a youngster. What sports in particular did you enjoy?

RIGAS: I enjoyed them all, I guess it was that as I grew up I played... I wasn't a great athlete but I must have had something in that day because I played four years of varsity baseball and I lettered in track for four years. I was on the varsity basketball team, junior and senior year and lettered in that and I played football for my sophomore and junior year. I tore my cartilage and I couldn't play my senior year. Yeah, I was pretty active in sports, I guess.

SMITH: What position did you play in baseball?

RIGAS: It's hard for me to believe this, but I struggle with all this, but in those days I played shortstop and I can't believe my arm was strong enough to do all that. I was quick and could move around. One of my heroes when I was growing up was Phil Rizzuto because he was short in stature and what not. Yeah, I was shortstop and track I ran the dashes, the hundred, the 220, and in football I played in the backfield, in those days you went both ways, and so on.

SMITH: It's difficult to visualize you on a football team when you look at the size of today's players.

RIGAS: One thing while we are talking sports, two stories. One is that when I was a sophomore, one of my highlights of my sports career was a second game we were playing. I got into the game for the first time in my varsity game in the second quarter. I heard the coach yelling, "Give it to RIGAS:" and I got in the game and I was really scared and nervous. They called my play and I took that ball and I must have run all over that field avoiding everybody and just running real scared all over the place. But anyway I scored a touchdown. Unfortunately, they called the play back because somebody was offside and the next day the headlines came out and the first line was, "Wellsville Defeats the Team" and the second line was, "Crowd Thrills to RIGAS: Dash."

SMITH: Even if it was called back.

RIGAS: Even if it was called back. It was amazing.

SMITH: That's great. You said there was another sports story.

RIGAS: Well, one thing is that I was going to relate, I know that my business career life kind of relates to my football experience in this respect. When I was growing up I always seemed to be playing because of the way the neighborhood was constituted, with older children. Two and three years older, four years older. I was small and quick and so when we were playing football I could remember when they hit me, it hurt. I'd pick myself up and I'd do anything so they wouldn't hit me and on the other hand, they'd do anything to try to catch me, because it was always a feat. And all the way through growing up, I was always one of those scab bags who was evading everybody, but later on as I'd get into the huddle, and I used to be hurting and I'd think, "God I hope they don't call my play again." When they'd call it, you know, you'd take the ball and you get banged and smeared and there was no opening and little discouraged, a lot of discouragement, and you go back in the huddle, take that ball again, and maybe not do too good, but every once in a while there was an opening. You had to know which was a right opening and where the right hole was or you weren't going to go any place and you also knew, I learned early on that those holes closed up pretty fast.

So intuitively and through whatever it was, you had to pick the right holes and then when you got through the right holes, you don't know whether you're going to go through the sidelines, you're going to go down the middle, you slack up on the speed, you do whatever. I guess, my business experience is that through my life, you're taught to carry the ball and it hurt, and disappointments, but every once in a while, you find that opening and there were the right openings and you close them fast, whether it was to make a loan or to get a franchise, because they were gone. I think that's my football story.

SMITH: That's a beautiful analogy, too. A way of life. You played it like you played the game of football.

RIGAS: You took the ball and lots of times it hurt. There was no gain and lots of times there were some losses, but you went and picked it up again.

SMITH: John, you mentioned your children and we will talk more about them later on because I understand your son is participating in the business, would you tell us when they were born and their names, just identify the children for us now?

RIGAS: My oldest son is Michael. He was born on November 30, 1953. Then my number two son, Timmy, was born May 17. My number three son is James, who was born 19 months later. I'll check those dates and get them in here. December 17. Then Ellen was born on June 5, and I'll have to see those years again. So I have three sons and then we got our daughter. All which were born in Coudersport, Pennsylvania, in a little old hospital that had a wooden frame building, family practitioner.

SMITH: When did you move to Coudersport, John?

RIGAS: What really got me to Coudersport was I bought the theater there in 1951.

SMITH: Motion picture theater.

RIGAS: Maybe this is a good time to back up to reflect on that. When I graduated from college, with a degree in engineering, my father asked me to consider going into restaurant with him. I always had a desire to do something in the business environment because that was kind of the environment that my parents and friends had been exposed to and I kind of wanted to try that. I felt that was a place to be where maybe you could control your destiny better and so on. It was a challenge. I tried the restaurant and I worked in the restaurant for approximately nine months, but I really began to feel that the restaurant wasn't going to be my niche because believe it or not there's a knack to cooking and I really didn't perform the best. I could work the grill but maybe not as well as somebody else. I sensed all that, so I began to think of maybe what other opportunity I would have in the business world.

I had a Greek friend by the name of Peter Grafiades who was involved with a chain of theaters. He was always promoting that I should try the theater business. So one day he said to me that there was a theater in Coudersport that was for sale. So we went over and looked at it. It was run down and disarrayed, but we thought it over and of course, that was just the beginning for the box offices were really starting to slump off because of the inroads of television. The question was how much time do we have before the box office, what is the future of the motion picture theater? Recognizing there were a lot of risks, and my father didn't have any cash, nonetheless, we decided that there was a few years before TV stations were going to proliferate perhaps in rural America, so if I really worked hard, I could build up an asset base, so we took the risk and a gamble and we paid, which was as I look back on it, it was an unreasonable price, but I paid $72,000 for the motion picture theater in those days and saw immediately I started with a nice debt.

That brought me to Coudersport. I was commuting between Wellsville, so what I was doing was in the first year I would work some in the restaurant, and had the theater open in the evenings trying to sock all the money I could in a way to pay off the mortgage. All the banks had turned us down. We didn't have a bank loan. My dad had 5000 dollars to contribute, I didn't have anything. Then we went to some of our Greek friends for another 20‑25,000 dollars which they were willing to lend essentially my dad and then the seller took a mortgage on the rest of it. So that began my theater career. The theater is still in the family, we still operate it on weekends and it's still part of our lifeblood in Coudersport.

At the time there were five theaters in the county and none of them have survived and we're still there. I've got to tell you that after the 60's, you know you were just a loser but I felt that I'd like to keep it alive as long as I could and the theater has struggled but the last two or three years, it's kind of turned around. Just the other day, I couldn't believe it, my bookkeeper came into me and said, "John, don't you think we ought to take the money out of the theater's checking account and put it into a Hi‑Fi account or something and draw some interest." I said, "I've never had any money in the theater account. How much have we got?" He said, "We have $10,000." So for the first time, I said, "I can't believe that. That's unheard of." So there we are.

The theater business has really picked up in the last two years for a whole lot of reasons, but that's another story. So the theater is still there, we're still making popcorn and selling tickets.

SMITH: In reading some background material on your company, I noticed that apparently the theater business there had something to do with your entry into the cable business. Is that right?

RIGAS: Yes, it sure does. It has a big part of it, actually. Strat, I suppose that if anybody can actually make the claim of being at the right place at the time right time, I guess this is the story that probably verifies that. Let me give you a little history about that. When I went into the theater business, I knew absolutely nothing about booking, about how the films were bought, what was happening. But I decided instead of booking a company, book the movies, I would like to try my hand at it. We used to have approximately 20 film companies and salesmen that would make their rounds every thirty days to book and sell the shows, M.G.M., 20th Century Fox, Warner Brothers, and R.K.O. had a gentleman by the name of Sam Milberg. Remember that name when it comes to RIGAS:. Sam Milberg. Sam Milberg was a salesman that I had a lot of respect for in that he was a marvelous encyclopedia of all the movies that were ever made. He grew up in the business, his father was a salesman early on and he knew the directors, the cast and he just had a wonderful mind for all of that. And loved the business.

But Sam was also an individual that most people avoided because he was the type of a guy that if you went to the restaurant, he spilled egg on his tie, insult the waitress, and there was always some embarrassment. Always broke, and the other salesmen would never go to lunch or dinner with him because they would always have to pick up his tab if, you know. But, what happened is one day, Sam said to me, "Well, John, he said, you know as I'm traveling around western Pennsylvania, I'm noticing that the small towns are beginning to bring in some television by wire." "You know, he said, I think you ought to get into that. To protect your theater investment." I found it very difficult to say no, that's still one of my traits, I'm not very good at saying no. I said, as courteous as I could be, "Sam, I just got into the theater business, I've got a big debt, I obviously don't have any money, and this was in 1952, the last part of '52.

At this point I had taken a position as an engineer for Sylvania Electric in Emporium, which was about a 33 mile drive. So what I was doing, I was driving in the day time to work as an engineer at Sylvania Electric and then in the evening I would run the theater and do my booking and meet with my salesmen. With the idea that I would live off my income from Sylvania Electric and put everything I could into paying back my debts. Anyway, Sam started explaining to me how they were bringing it in. I had a theater exhibitor by the name of John Troy that is doing this in the little town of Tidioute, Pennsylvania. He has a theater there, just a small tiny theater. He said, "I'm going to have him call you up." I thought fine. Well I never hear from anybody and that would all disappear. I wasn't concerned about it. I never really gave it any serious thought.

So about two or three weeks later, Sam was in Tidioute and he had asked Mr. Troy to give me a call, which he did. Mr. Troy was being very nice about it, and explaining how he ran this wire in, they hadn't had any customers but they were starting to run in and this sort of thing. So I listened and he explained what they were going to do. I thanked him and promptly forgot about it. Next time, Sam came up and said, "What did you think about that?" I said, "Well Sam, I'm sure that television is going to come to all of these communities because I noticed some of the people on the side hills are starting to bring in television to hook up two or three of their homes in the neighborhood and running their own lines and so you know, I'm sure I've got to contend with the competition from TV and it's happening now. But I really don't have any money for this kind of a project and I'm busy and I'm trying to pay all of this back.

He said, "Well, John, you've got to do this. This is the way you've got to go." I said, "Well, that's easy for you to say but I don't have any money!" He said, "John, this is an opportunity. What you've got to do is get the license." We call our franchise our license. I said, "Well, I don't really have any interest," but Sam was persistent. Sam was a salesman. The best way to get rid of Sam was to say, "Ok, Sam, I'll call." So the next time he came up and I hadn't called...

End of Tape 1, Side A

SMITH: This is Tape 2, Side A. We did not record Side B on Tape 1. This is still October 11th and we're interviewing John RIGAS:, President and Chief Executive Officer of Adelphia Communications. John, when the tape ran out on the other side, we were talking about the efforts of Sam Milberg to get you to acquire a franchise in the cable business. Would you like to proceed with the rest of that story?

RIGAS: Sure. So when I talked to the president of council in Coudersport, he told me that that franchise had already been given out. I was really relieved. Would you believe that Sam Milberg said to me, "Well, call him up and see if he'll sell it." I thought I was home free so many times and I said, "Sam, I don't have any money I'm sure it's an embarrassment." I remember I said, "Let me think about it." So he said, "Well next time I come up I hope that you will have called him up and see if he will sell the franchise because I really believe that this is the way they are going to have television in these small towns. It's a great way to protect your investment in the theater business."

This guy didn't have any money, he really wasn't a business man. He was an idea man and always has been. That's why he was creative. He could always put those double features together. Bring in the Tarzans, the Roy Rogers on Friday and Saturday at $12.50 and you're going to make a bundle of money. Next time he came up in about thirty days, one of the first things he brought up, I remember he said, "Well, did you call up about that franchise" and I said, "No, I don't have any money. I've got enough to concern myself with, I have a son." But I couldn't say no, so I thought the easiest way to get rid of Sam was to call up and the guy would say, "No, it's not for sale." So I consented and I called up Jack Darfeld [???]

The conversation went like this. He was an older business man, he had a hardware store. He was interested as most people were in those days of selling TV sets. He was looking for a vehicle to do that. So we began with the usual opening remarks and finally I said, "Jack, I understand you have the franchise for the television." He said, "Yes, that's right and we're getting marvelous pictures and a lot of support and a lot of interest. We can pick three and four and five channels and of course, everybody has made that same claim. The truth of the matter is they were lucky to pick up two channels, both of which were snowy, but on one given day, they'd come in from the north and the south and the next day come in from the west. They were all looking for something to sell.

Well, Senator Burger??? was interested in this project and Dr. Mosh[???] and everything was looking very, very rosy. So I felt with that scenario he wasn't going to be interested in selling the franchise. So Sam was always nudging me, asking me if he'll sell and sell and I was hesitant because of what he was saying it was kind of embarrassing. Finally, he said, "Well, do you have an interest?" I said, "Well, not really, Jack, then on the other hand that now listening to it, that you might want to sell the franchise." Lo and behold, he reversed the whole situation and said to me, "My wife is upset with me, going up and down and spending as much time on checking the signals. I've got my own business to run. I did offer to sell it to the people I had mentioned and I'm upset with them because they won't give me what I'm asking and they tell me there's no value to it." So he said, "Yes, I would sell that franchise." And I was dead.

I guess the next question is that I thought I had one more ace in the whole, it is obviously going to be some price that I couldn't afford, so I said, Ok, what would you sell it for, Jack. He said, John, I'm going to sell it to you for a lot less money than I asked from them. I'll sell it to you for $100. I said, "Good God."

SMITH: And you didn't have the hundred dollars.

RIGAS: Good God. I overdrew the checking account, but I said come on up and I'll buy the franchise. I had no idea what I was going to do with it. He came up and he signed it to me and I got the Coudersport TV franchise for $100.

SMITH: That's a fascinating story and we want to go into your development of your franchise and your financing and your early experiences with it. We skipped into Coudersport a step earlier than we should have because we didn't get into any real background on where you went to college. You did mention that. When did you go to college, where and give us some information on that?

RIGAS: Before I get into that, let me finish up a little bit of the sequence, what happened after that, if you don't mind.

SMITH: Sure, go right ahead.

RIGAS: I ought to say this. Sam prevailed and I got the franchise for $100. I really didn't do any more real honest to gosh hard thinking about it. I thought well, maybe something will break and maybe I ought to do something about it, but I didn't know what. About a week later, I received a call from one of the gentleman that was trying to buy the franchise. In the newspaper there was a story that was saying that this group that was interested in developing the television system in Coudersport didn't see any value in the franchise. The city attorney had ruled that there was an obligation and they should try to transfer that and that it would make it easier for the council and everybody. That was what Jack Darfield was alluding to when he said what he was upset with him because they were telling him it was of no value and that they didn't need that. As it was I think Jack was asking what I had heard, he was asking $500 for that franchise. They were willing to come up with the $500.

Just to prove his point he sold it to me for one hundred. I can't believe that, but that's what happened. We had a cup of coffee and a man by the name of Joe English said to me, "John, you cannot prevent television from coming into Coudersport. Protect your theater." That won't work and we're going to bring television in here. We just want you to know that's our position and that franchise and that piece of paper that you obtained, very simply stated...

SMITH: Do you have that today, John?

RIGAS: I have that someplace and I've got to find it for you.

SMITH: Could we have a copy of it and maybe someday the original when your family will let it go?

RIGAS: Sure.

SMITH: Ok.

RIGAS: Well I said, "Joe, I would never expect to keep out television from Coudersport, it's just not my style, it's not the intent." Finally Joe said to me, "Well, what do you intend to do with it?" I said, "My intent is and I don't know why I said this, but I saw an opportunity to try to bring in television under this contract to the people of Coudersport. He said we don't need that franchise. He said from what I read in the paper I think there is some validity and it's just going to be more difficult. But he said, we've been talking it over, our group, there was the doctor, the senator and myself, just the three of us, and we thought if you throw in the franchise we'll give you 25% of the investment and we'll become partners.

SMITH: Throw in the franchise but they didn't need it, huh?

RIGAS: Yes. But they said you can help us, you have a degree in engineering and maybe you can overlook the operations and begin, so there's a place for you. It really came down to the fact that I had the franchise. I said, "How much money are we talking about?" Well, he said, what we can best guess is that we're going to need about 40 or 50,000 dollars to build this plant. It's going to have about twelve miles initially and we've talked to somebody from Jerrold, so we made arrangements since Jim Berger is the director at this local bank to borrow $40,000 and we hope to get started with that and build most of the system, and it won't require any cash just sign the notes on good faith.

I thought that was a pretty good deal, so I said fine, with one proviso because I don't want anybody to think I was careless with my money. Just give me back my hundred dollars for the franchise. So I want you to all know that I got my hundred dollars back and that's how we made the deal.

SMITH: You got your hundred dollars back and 25% of the company.

RIGAS: That's right.

SMITH: Great.

RIGAS: And I've leveraged ever since.

SMITH: In the best tradition of the cable industry.

RIGAS: So that's the story.

SMITH: Is this a good place to go back and catch up on your engineering degree?

RIGAS: Only one thing that I would like to comment on. Sam Milberg, about two years later, was always an idea man. Came to me and said John, I got a great idea for you to make some money. I'm in debt with my theater and I'm struggling. He said, "My wife works in a discount place in Pittsburgh and they're coming in and buying all these items. What you have to do is develop a regional discount house." This was the beginning of discounts. Of course, I didn't get into it. But he really was bugging me to open up a discount house in that area. Later on he got transferred to Detroit and I lost track. Someplace in the middle '60s, he called me up and I hadn't heard from him and I was really glad to hear from him. He said, after some saying hello and touching base on the families and all that, he said, "John, you and I are going to make a lot of money." I said, what have you got in mind, Sam, what are you thinking of?" He said, "I'm operating the theaters and we're doing a big business and what we're doing is we're running X-rated movies and he said what we're going to do is, we're going to make these movies. I said, Sam, I don't think that's my style. But I just thought that was interesting. That was early on when those first X-rated movies were coming on and all that.

SMITH: Think what you could have done, John.

RIGAS: I missed another chance, didn't I? That's the end of that story.

SMITH: Let's go back to college and get your experience there, including your fraternity and if you were active in athletics and so on. Just general background about your college education.

RIGAS: Let me go back to high school if I may. I graduated from high school in 1943 in June. It was in the middle of World War II, obviously and as soon as you graduated, if you were 18 you immediately got your notice to appear to Selective Service. Interestingly enough, a lot more than I ever realized until I went back to have our first class reunion, which was after 25 years, we were trying to put it all together, how many of my class had elected to enlist as soon as they turned 18, rather than wait to graduate. I was one of those who elected to get my diploma before I went into the service. Immediately, the day after I received it, it was a Saturday morning, graduation was on a Thursday night. Saturday morning I got my notice to appear for my physical, so I was drafted in August. The first week of August I reported for duty.

SMITH: August of what year, John?

RIGAS: '43.

SMITH: Chronologically, the military comes before the college, so let's go into that first.

RIGAS: Sure. I reported to Fort Benning, Georgia for my basic training which was infantry training and remember those days, I didn't know a thing about the service. It was all foreign talk. I had to learn everything and the first time away from home like so many young people, but it was the place to be. As you well know, everybody wanted to serve, I felt most people did. It was a war we wanted to win and so I was really kind of worried that I might not pass the physical for whatever reason and so on. I was lucky enough and I went to infantry training. After infantry training, they had what was known as the A.S.T.P. (Army Specialized Training Program) where if you scored high enough they would put you into special training and maybe get your degree allowing people to get a degree while they were in the service.

After training I transferred up to Indiana University in Bloomington and I began the A.S.T.P. training and about six months into that, they needed a lot of recruits for infantry and there was some criticism, I suppose, for some of those programs. They shut down most of that type of programming as I recall. Then I was reassigned and we formed a new division, armored division, 20th Armored Division in Camp Campbell, Kentucky. So we began the training and I became part of the armored infantry and we prepared ourselves and we went overseas. I was discharged on February 1, 1946 with the lofty rank of PFC. and I want to go on record that I made PFC three times.

SMITH: You mentioned that last night, so let's have the story of how you managed to do it three times, instead of the usual once.

RIGAS: It's interesting. I guess I was always a victim of circumstance, but as I look back on it. Probably as I look back in my career, 18, 19, 20 years old, and pretty young. I think I did my job ok and I know that everytime there was a replacement to go to other companies, overseas to fill the infantry ranks...by the way I kept thinking well, I really didn't belong in the infantry, I was always trying to figure out a way to get transferred out to the Air Corps but they weren't taking anymore transfers. I thought that engineer sounded better to me than the infantry, but I was always kept in that mold of the state of infantry.

I always felt that one of the reasons that the sergeant's captain liked to have me around was because I was probably the smallest person in the infantry and in that particular platoon or company. When we'd have the forced marches and the hard conditions out there in training, I think they'd kind of use me as a morale booster. If John RIGAS: could hang in there with that full field pack, by God the rest of us could. I kind of became a favorite with the sergeant, they kept me in the platoon until we went overseas. I think the first time I got up to the high rank of PFC, I went from $50 a month to $54 a month, we were having some training and we were going to go through the infiltration course and that required you to take your rifle and go under the barbed wired fence and people would simulate shooting over you and trace your bullets and all that sort of thing. You'd get all dirtied and muddied up. The half hour before that they wanted us to go back to our tents and clean our rifles and I didn't think that it made much sense to clean my rifle.

They knew what they were doing as you look back on it, so they pulled a spot check. When they came to my pup tent, I was in there reading a book, I wasn't cleaning my rifle. Somehow that didn't sit well with the captain, so they made an example of me and I lost my first stripe. Then when went overseas they gave it back to me. After the service I forget what I lost my second one on, but it was something to do with my rifle again. The third one was an unusual story. The war was over, and we were always told we couldn't fraternize with the enemy, the Germans. So they put us on, me and somebody else, on a very remote, dirt crossroad and said that your assignment is to stay here and we'll be back and to see if anything unusual happens. There's just a little farmhouse out there. So we were there for three or four days. They'd bring us supplies. Anyway, there was an old German gentleman who lived there. Nobody was around so he'd come by and he'd say a few words. We'd kind of wave to him and so on. Don't ask me how and why, but he must have been eighty years old. We were just talking, somehow we were talking and he motioned to me that he would like to learn how the rifle worked.

There wasn't anything in the rifle, so I was showing him how the bolts were going back and forth and we were just chatting and just at the time as I was showing him how the bolt was working, a jeep came floating down the road with the captain. He saw me fraternizing with my friend and of course, just went into orbit. He immediately called the whole battalion together and told them about this soldier that was literally giving his guns to the enemy. So they broke me, and I thought surely I was going to get court marshaled for that one, but I didn't.

SMITH: I have visions of you standing up there, like in the Gary Cooper desert movies and they're ripping off your medals and awards, disgracing you.

RIGAS: Anyway, when I had enough points and it came time to discharge me, the Congress had passed an act that said if you had enough points you were eligible. I had enough points, but you had to be a PFC. Our division had been redeployed from Germany back through the States and I was in the States when V.J. Day occurred in August. They dropped the bomb. We were on our way to be assigned in California for the invasion of Japan. Our training was going to be in California when the war ended. Congress had graciously passed an act so that in order for me to be discharged I had to be a PFC. So they gave me back my stripes.

SMITH: On again, off again. John, you mentioned getting overseas, but you haven't discussed anything about what happened to you. Did you see action?

RIGAS: We saw action. When we went overseas, D‑Day had occurred and so we started to go across Belgium and France. Our first initiation was kind of just mopping up behind the more active division. Later on we shot down through Munich and Austria and I saw some action, not a lot. Our company did get the presidential citation for action, I think that we got beat up in Munich pretty bad ‑ around an airport as I recall, because we hit a nest of S.S. troopers that were pretty fanatical and so we crossed the Danzig and so on, but sure I saw some action. As I look back on it and I had the occasion to think back, I went back to Normandy and I visited the beaches and although I wasn't there at the invasion, it was one of those moments that you freeze in time because they were just getting close to having this fortieth year celebration.

I visited the cemetery and I overlooked the beaches and I walked through the cemetery and I saw all those lives that had been sacrificed, PFC., private, corporal, tech sergeant and I remarked to Doris, God you know, we were just kids. So we were kids and you look at us now when we were there, most of us were in our 60's and a lot of them were in their 70's, gotten gray and bald and bent over, but it's an experience that I was glad to be part of. I wouldn't wish it on anybody in many ways, but I sure was proud to be part of all that.

SMITH: Where were you staged from, John, when you went overseas?

RIGAS: We landed in Cong[???] then we went across the Belgium and we crossed at the Remodgen[???] Bridge, I think we were the second division to cross that and we went across Germany and so on. We just built in hamlets and houses and fields as we went across though. That's essentially it. We landed at Cherbourg. They just had cleared the port.

SMITH: Did you get across the channel from England or did you come over directly?

RIGAS: Directly. I remember leaving the States and as our transport convoy was going across I remember that band playing. I don't know why it sticks in my mind, I guess because it was so ironical. Here we all are loaded up with our full field packs. I was a bazooka guy, I had a bazooka and a rifle and blankets and a gas mask and every other thing, you could hardly see me. The man was playing, "Is you, is you, is you, ain't my baby?" Couldn't relate to all of that.

SMITH: Did you say what year you were discharged?

RIGAS: '46. As a matter of fact interestingly enough, I was discharged on February 1, 1946 which was just an unbelievable day in your life. You can't express the thing, I couldn't, of just being behind us, your life is coming together, that freedom that went with it. For me, it was just an exhilaration that I couldn't express. Then about five years later, on February 1 is the day I received my diploma from college. Two years later, on February 1 is my wedding anniversary. So some great things happened to me on February 1.

SMITH: Those were great days. I recalled that you were married on February 1, but that's quite a coincidence. I take it that these days at the end of January, you look forward to see what's going to happen on February 1.

RIGAS: Well, it's certainly for me of celebration and reflection, no question about it.

SMITH: When you got back and were discharged, you went home to Wellsville, I take it.

RIGAS: Yes.

SMITH: What caused you to decide that you wanted to study engineering in college?

RIGAS: I think it was Greek immigrant's aspirations, like all immigrants, I believe, particularly the first generation, that by the way, was a marvelous generation, because the ones that came over and limited education, didn't know the language, you can't say enough for them. Not only they that, they had a great faith and a family and religion and great belief in all of that and great principles that it was important to have integrity. It was important that you get the education, it was important that you carry yourself in society, and all of that was fostered through the church and whatever it was there.

All through, it was important that I did well with my studies in school and my family said some way, all of our children are going to be educated. So that was foremost in their mind. When I came back, there wasn't any doubt that I wanted to go to college. There were three young men that were of the Greek community in Wellsville. Before the war had started, in '40 ‑'41, they had registered at R.P.I.

SMITH: R.P.I. ?

RIGAS: Rensselaer Polytechnic Institute. Before the war they had approximately 1800, all males in the school. It was the first engineering school founded, located in Troy, New York. The local Episcopal rector had kind of encouraged them that they look at Rensselaer. They were all in the same class. They all graduated from high school and they all went to Rensselaer. When they got out of the service, of course, they went back to continue their education. The service had interrupted their graduation. They encouraged me to apply to Rensselaer and they were really good close friends of mine, so I didn't look at anyplace else, I just looked at R.P.I. I applied, was accepted, and I started my college as soon as I could in the summer session of July in '46. I accelerated by going two summers and so I graduated in 1950, January. Our commencement speaker was Omar Bradley.

SMITH: You would remember the name for certain.

RIGAS: So I went to college and that's why the Greek friends and the Greek influence. I was fortunate enough, we had the G.I. Bill which was a marvelous bill. It took care of most of our tuition, most of our needs and I've always been supportive of that kind of... So many of our people went on to get their degrees and education, never would have been able to afford, never would have thought about it. Marvelous bill. Money well spent. I had two other friends that I graduated with in 1943, they came back and they also applied to Rensselaer and so we had a pretty good delegation from Wellsville. We had six kids from Wellsville all going to Rensselaer.

SMTIH What degree did you get when you graduated?

RIGAS: Well, actually Strat, I started off not really having a good idea what engineering was about and I really didn't have a good feeling what education was all about. I decided to become a mechanical engineer. I think that probably in the second year I elected to transfer over into what was known at R.P.I. as Management Engineer, which was kind of an offshoot of Industrial Engineers. Because I recognized that I really wasn't a pure engineer. The technical subjects came ok, but there wasn't any question that the real engineers, the people who were really into it, were getting their A's and I was struggling with my C+'s and my B‑'s and I had to work real hard to make sure that I hung in there. So management appealed to me because they had courses in business and statistics and personnel and accounting and finance and marketing that I felt gave me a little bit better balance, because I was kind of interested in doing something eventually in the business world someplace. It was a marvelous education and Rensselaer was a great school. I can't say enough about it. Many times I threatened to leave it, it was too hard, and I sure am glad I stuck it out.

SMITH: Well if it were an institution where Omar Bradley, General Bradley, gave the commencement address, it had to be a highly respected institution.

RIGAS: It really is. Undergraduate for engineering, I can't say enough. It did a superb job. I'm glad I went. It really helped my training in that it taught me how to attack problems. What is the problem? What do we know? Your mind would start to be thinking that way. You'd put down all those factors and as I sat through meetings, many, many times I often thought that logic, that sequential thing, and getting down to the nitty gritty and cutting through a whole lot of things, a lot of it was attributable to the way they just pounded at you. What you have to work with, put it down, what are we looking for and so on. I think that was great for me. It certainly has proved invaluable in my business life.

SMITH: It's interesting that after you get a degree in engineering management, your father wanted you to go into the restaurant business.

RIGAS: As I look at that, and you know, at this point it was a lot of peer pressure, in the sense that why John, would you go through four years of engineering and then consider to go into a restaurant. That was always an uneasy situation to be in because you did feel self‑conscious, somewhat, about it. I tried, and I have often told young people that it doesn't really make any difference what you get your degree in. You can use it in many ways. Just get the degree, but don't be embarrassed if it doesn't fit in what your major was. Sure, I felt uneasy about working in a restaurant, putting on a white apron, working the grill, but I wanted to give it a try, and I'm glad I did. But I sure couldn't make a ham and egg sandwich.

End of Tape 2, Side A.

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John Rigas

John Rigas

Interview Date: Tuesday October 17, 2000
Interview Location: Coudersport, PA
Interviewer: Marlowe Froke
Collection: Hauser Collection

FROKE: John Rigas is one of the classic entrepreneurs, not only in the cable television industry, but in business and industry in general in the United States and even on a world-wide basis. Starting out with a small cable operation in Coudersport, Pennsylvania and then seeing it develop into a national and international multi-media, multi-telecommunications operation from an operation that had difficulty financially beginning, Adelphia Communications is now a multi-billion dollar operation that everybody is familiar with. John Rigas is regarded as "the" person to whom the cable industry looks these days not only for where the cable industry will be going in the years ahead, but also reflections and nostalgia about the past. We're fortunate to be with John in the Brown Barn in Coudersport, Pennsylvania.

John, how did you choose the name Brown Barn for this particular facility here in Coudersport?

RIGAS: Well, this used to be a barn that housed cows.

FROKE: It really was?

RIGAS: Yes it was a barn. I decided to save the barn, but I made one mistake – I asked my wife to help me restore it. It turned out what you have now.

FROKE: It's a spectacular facility.

RIGAS: But it was a brown barn when we first had it, and it's a brown barn today.

FROKE: When you gave me a tour of some of the space here in the Brown Barn, you showed me then a recreational facility where you have the opportunity to bring the family together for exercise and recreation. Is the brown barn, then, something of a family facility? Is that how you envision it or is an organization/administration building?

RIGAS: No, it's really the family more than the organization although we'll have company gatherings here. It really was put together for the family to invite who they wanted to to participate in some sporting events our there in the little gym and play basketball and birthday parties. Then upstairs we have a couple of apartments that our guests can stay in.

FROKE: It's a spectacular facility. It really is.

RIGAS: Okay. So now I suppose I ought to invite everybody to the Brown Barn.

FROKE: You'll get requests for invitations now from people all over the country so that they can experience what I experienced on this, the 17th of October in the year 2000. How many years have you been in the cable business, John?

RIGAS: Well, you know, I guess 48. It will be 50 in 2002.

FROKE: So you were there at the very beginning as the historians of the cable industry are saying these days. 1948?

RIGAS: Yes, you know, when I look back now - and there isn't a day that my mind doesn't reflect on the early days and those early pioneers and Pennsylvania was such a big part of the cable industry. I just can't help back and think back and realize how much they did for me and for cable television because those early pioneers were truly extraordinary people. They just had such a passion and believed in what they were attempting to do and with very little skills as far as having the latest state-of-the-art equipment to work with. So you know, I must say that those days were something special. I wasn't at the very beginning in '48-'49 but certainly in '52 was close enough. I'm just so lucky that I've met so many people in this industry, growing up together. And I'm still here.

FROKE: And you're talking about such people as Bob Magness and Bill Daniels and George Barco.

RIGAS: Sure. You know, I'm talking about – if I'm looking back to when I got started in '52 – I'm talking about people like Bob Tarleton and John Walson and George and Yolanda Barco and Milt Shapp and Joe Gans and George Gardner and Marty Malarkey. The list goes on and on and I wished I could name them all. But they're the group that were from Pennsylvania that I remember so well in the early, early days. Of course, there were Bill Daniels at the national scene, and Bob Magness. But my personal contacts at the beginning were with the Pennsylvania group.

FROKE: What is there about the cable industry that prompts such a family-type comment as you just made in reflecting on the professional relationships that you had? You were very, very close to these people.

RIGAS: I think that there was such a close bond because you must remember we were a small group of people. We had so many adversaries and so many uncertainties that we had to lean on each other for support and encouragement and leadership. So that bond and that family relationship meant so much. I think that when I look back on it, it's still is there – that whole culture that has come through this industry these many years. When I talk about the people that I mention in the past and then I go on and there's another generation that in the 60's and the 70's that came on board – Ralph Roberts, Julian Brodsky,

FROKE: Jim Robbins.

RIGAS: Yes. Amos Hostetter, Alan Gerry. The list goes on – Ed Allen. I could name a whole lot of those people that carried the burden. I wouldn't want to be the one that suggested that I was a leader in that endeavor. I was always a big believer in the cable industry. But I needed people like those people that were great mentors to me. I've just been lucky. I can reflect on those days, and I draw on that experience and how they felt about issues and the industry that has sustained me these many years – very important. I've been very lucky.

FROKE: The year 2000 has been an exceptional year for you in terms of the cable industry, recognizing your contributions. You were the recipient of the Vanguard Award, the recipient of the Operator of the Year Award. You were the recipient of the Kaitz Award. It was a big year for you.

RIGAS: There's something to be said about hanging around long enough, and I'm a perfect example of that. Ten years ago I used to tell people that as I've gotten older, people have given me an awfully lot of recognition and respect. I get a lot of perks along the way. I'm going to stick around and enjoy all that. And I have enjoyed it. I must say that as I known this industry and stayed around, yes, you get a lot of recognition. But I also know that part of that is the longevity of being around, and I recognize that. But at the same time, those awards I don't take lightly because they are important, and I appreciate the people recognizing me. It means a lot to me.

FROKE: You're being over modest again as you always have been, John, in that it is a miracle what you have accomplished with Adelphia Communications Corporation.

RIGAS: Well, it probably is a miracle because I never expected to survive so many days.

FROKE: You presided over it. I noticed in the background, for instance, a picture of you and the pope shaking hands. So he must have been sanctifying the miracle that took place.

RIGAS: I often said that praying helped. There were times that I did a lot of praying.

FROKE: Let's go back to those early days when probably you prayed more. Well, I won't say that. Maybe you pray more today than you did then. I don't know. At any rate, it was an inappropriate remark so let's pass it just as quickly as we can. What part of the country were you born in? You're not a native of Pennsylvania are you?

RIGAS: Sure. I was born just across the border here. Where Coudersport is located, we're just 12 miles from the New York state line. So I was born about 30 miles from here in Wellsville, New York, population about 7,000 people. It's in the western part of the state. My parents were Greek immigrants. My father came to this country in 1912 and so many immigrants came here with just a dream and an awfully lot of courage, a lot of faith. My mother came to this country in 1920.

FROKE: Also from Greece?

RIGAS: Also from Greece – from the same village. And I ought to repeat a little story because sometimes we lose perspective of what people were called on as immigrants to do and the great commitment they had. If you can visualize my little mother as a little girl growing up in this little village up in the mountains of Greece where there was no electricity, no plumbing, no roads, no hospital, just if you pass over the mountain tops. Education was over for her when she was in third grade. When she was 19 years old in the village, she was of course doing what was expected of the older child – helping to raise the other children and take care of them. She got a letter from America asking for her to come to this country to become the bride of who was my dad. Of course, mom had never known my dad except they knew the families in the village. Both families talked it over. With a pitcher in her hand and strong commitment to family and strong faith in her religion, she hiked 75 miles down to that seaport, took the boat over to New York, came through Ellis Island, was greeted by my dad and a few relatives from the village, took the Erie Railroad to Wellsville. My dad had started a restaurant in 1921 as all good Greeks should do. Up over the restaurant, my mother and dad were married in the Greek Orthodox Church, and I was born over the restaurant. My brother has run that restaurant and now my nephew so it's been in existence for close to 80 years and has become an institution. It gives my a lot of satisfaction and pride to be able to go back to the restaurant 2 – 3 times a week, see some old friends, and renew not only acquaintances but my roots which is important to me.

FROKE: Is the restaurant still owned by your family?

RIGAS: Yes, it's still in the family so I can still go get a hot dog and a cup of coffee - for free.

FROKE: How many children were there in the family?

RIGAS: There were 4 of us. I'm the oldest. I have two sisters and a brother, all alive. My dad lived to be 87 and my mother lived to be 91 so they lived to be a good age and they were blessed. It is certainly a great story that so many immigrants can relate to in their lives. Being part of that immigrant experience, first generation, has certainly meant a lot to me. I think it also has guided me in how I deal with people and issues. So I've been very lucky to grow up in a little town, still close to home, and be here.

FROKE: How did you get to Coudersport?

RIGAS: Well, I got to Coudersport after I went in the service. I was discharged from the service in 1946 during World War II. I wouldn't want anybody to misread it. I got to the high rank of PFC.

FROKE: Were you in the Army?

RIGAS: I was in the Army Infantry...

FROKE: I was too.

RIGAS: ... and was overseas and came back.

FROKE: Germany?

RIGAS: Yes. We landed in France. I didn't land at Normandy. I missed that part of it. But nonetheless, the war was over, and I was discharged. In my home town, there were three Greek boys who were three years older than I. They had started education at Renssalier Polytechnic Institute which was then an all boys school, all engineering primarily – a technical school. During the war, they had to leave. When the war was over, they went back to Renssalier to renew their education and get their degree. As a consequence, I didn't know too much about one school from another and the GI bill was available which was very important to all of us. So if my Greek friends went to Renssalier, that's where I went. I received my degree in engineering. But when I was there, I must say that there were many times that I was think about transferring out. Engineering wasn't the easiest discipline for me.

FROKE: The physics and mathematics.

RIGAS: I got by. My simple observation was my roommates would turn off their lights at 12:30 and I'd still be studying and trying to solve that problem. They were getting a few more A's than I was. So when I got graduated from college, I decided that perhaps I ought to look at a different world. I always had a desire to perhaps start something in the business world and go that direction rather than be part of the corporate make-up at that time. And jobs were scarce. So, putting that together, I made a kind of a career choice. That was, my dad said, "Why don't you try the restaurant?" I put on the white apron and worked the grill, waited on the tables. I discovered that my dad had a talent that I didn't have. He could go in the kitchen, and he could make up batter of pancakes and the chili sauce for the hot dogs and the custard pie and the apple pies. And somehow, it always came out better than what I had coming out. And he had a flavor for that, and I sensed that I really didn't have what it really took to be part of that restaurant. So I was looking for something else.

FROKE: He enjoyed the enjoyment that people had in eating his food.

RIGAS: Yes. Working in a restaurant and working the grill is a wonderful place to meet so many great people at all levels. And the restaurant attracted at every level – the working man, the professional man. You got an opportunity, over a cup of coffee and over the counter when things were quiet, to chat and get to know people and families. I think it helped me with my ability to meet people, be comfortable and understand what people's needs were. I think that listening to people in the restaurant helped me a lot. Anyway, what happened is that I had another Greek friend – the Greeks keep coming into the beginning of this story, but that's part of my history. He was in the theater business. He said, "John, there's this theater in Coudersport, Pennsylvania that's for sale. You might consider looking at the theater business. Come on. The theater business is a good business." So I went over and looked at it. It just so happened that the night I went over and looked at it and check out the house, it was full. I thought that was a good sign. But what I didn't realize is that it was during deer season, and all the hunters were there packing up the theater. So that didn't happen very often like that. We decided to see if we could buy the theater. I decided it was a start. It was a run-down theater, and it was a challenge. But my dad had a few dollars he could contribute. We went to the two local banks in town, and they did the right thing. They turned us down because it was a pretty poor investment, but funny how things worked out. The seller was anxious to get out for one reason or another so he was willing to take a lot of paper. We raised another $10,000 to make the down payment from two other Greek families in my hometown. They were willing to lend my dad and myself the necessary money. So that's how I got into the theater business which we still have.

FROKE: I drove down the main street of Coudersport in coming to this meeting this morning, and the theater is still there and it looks in fine shape. The marquee is telling you that the shows are coming in. It's still active. And you still get a full house occasionally.

RIGAS: Yes. Well that can be a little misleading because ...

FROKE: But it sure looks good.

RIGAS: We get full houses because we allow all the people that work for Adelphia in for free. I'll deviate from that a little bit.

FROKE: It's one of their benefits.

RIGAS: Yes. It's one of those benefits – and their families. So the other day I was talking to my manager, and I looked at the theater. It was pretty full. I said, "Well, must be that it's a pretty popular movie and doing good business. How much are we taking in at the box office?" He said, "$37.50." I got to thinking that maybe I have to review that whole policy because we might be crowding people out of there. I don't know. I have to ...

FROKE: It's become another part of the magnificent philanthropy that you have shown to your community. We'll talk about that at a later time. But the theater now becomes a cultural resource for the community as a whole.

RIGAS: Yes. But getting back so I can finish up so some people want to put in the right perspective. It was a poor investment because television was going to come in which was impressive. And I knew that the box office was going to be hurt from that. In regard to the theater, it really was a run-down theater. There wasn't anything that anybody could be proud of. But as I thought about it, it was a career choice. On reflection, it certainly turned out well for me. Sometimes, as young people, we have to make a choice to start with a whole lot less and fulfill some of our dreams and hopes. But you can't start with a prestigious job always. You have to stretch it a little bit and make a sacrifice. Certainly in my case with my makeup and personality, that was the right career choice for me to start off, as discouraging as it looked at that time. I can well remember that first day in the box office, selling those tickets, in debt, knew nothing about the theater business, making the popcorn, taking the tickets, ushering people. "Why did I do this?" But there was something that said that I just wanted to try something on my own. So that's where it came from.

FROKE: And it turned out that the presentation business in the motion picture industry became a very significant part of the cable industry.

RIGAS: Sure. I booked the movies, made the popcorn ...

FROKE: And the experience was relevant to cable.

RIGAS: Yes.

FROKE: Were you married to Doris at the time that you came to Coudersport?

RIGAS: No. I wasn't. I was single. What happened is that there was a film salesman ... the story is an example of a person being at the right place at the right time. Perhaps there's somebody up there having a mission and a reason. I've got to believe that because I've had too many situations in my life that there hadn't been a purpose. So having said that, there was a film salesman by the name of Sam Milburg. Sam Milburg came from a family that was film peddlers - his parents were. In those days, the salesman and the film industry had an awfully lot of pride and prestige. It was a real, real pleasure and privilege to be part of that industry. Sam had that in him. On the other hand, if you went to breakfast with Sam, he'd be liable to spill egg on his tie. He would insult the waitress, never pay the check, and then light up a cheap $.05 cigar and smell up the whole place. You would say, "Why in the world would you bother with Sam?" He represented RKO Pictures in those days. But Sam had something special. He took a liking to me, and I needed somebody that understood the business and help me along. So what he did for me was give me examples of what I should book and what I shouldn't book. As an example, he would say to me, "John, don't book that picture from MGM." MGM was a premier film distribution company and producer of films, and MGM had all the big stars. But he would say, "Well, they're going to ask a lot of money for this picture. Joan Crawford doesn't do well in a small town. I've got a picture, "Tarzan of the Apes". I'll sell it to you for $12.50. You can go over to Republic, and they've got Gene Autry and Roy Rogers. That's take $12.50. And for $25 you've got a double feature that will do well in Coudersport." So I got to appreciate what the Bongos and Ma and Pa Kettles, the Bowery Boys meant in a small town in those days. Sam also did this. For some reason that I've never been able to figure out, Sam would say, "John, I've been traveling through small towns in Pennsylvania. A couple of these small towns are bringing in television by wire. That's the future. You have to get the franchise." We called it a license. He wasn't sure. He said, "You have to get permission to cross the streets." He wasn't sure what it all entailed. "But get it because your box office is going to be impacted with television coming. I've seen the results as I've traveled this district up here. When television comes in, the box office just drops right off. So in order to protect yourself, get that license." Now at this point in my life, I wasn't married, but I had a big debt.

FROKE: From the motion picture theater.

RIGAS: From the motion picture theater – all leveraged, very little down payment and a lot of uncertainty because I knew television was going to come in, and I was trying to pay down the debt as fast as I could. But I also took a job traveling 30 miles to Emporia, Pennsylvania as an engineer. Then I'd come back at night, open up the theater, do whatever it took, close it up, trying to make ends meet. I said, "Sam, you know I don't have any time for this endeavor. It sounds like a good idea." But I really didn't give it much credence. But there was something driving Sam. He wouldn't let go. "John, you have to get that franchise. This is the future." And those are the words he would use.

FROKE: He was talking, then, about the experiences that he had had in larger communities that did have access to broadcast television in 2 – 3 channels.

RIGAS: Correct. That's exactly what he was saying. He saw the impact and the influence that broadcast television was on people and how they were migrating to the TV set. So after much pushing and harassment, the only way I felt I was going to get rid of Sam was to make that call. So I did make the call. I talked to the president of the borough council, and I told him I would like to apply to get a permit to bring television into Coudersport. I really didn't, in my own mind, expect that I was going to do anything with it, but it was a favor to Sam. So the president of the council told me that I was too late. They had already given that permit or franchise, if you will, to another gentleman about three months before I had asked. I thought, "That's good news. So now I can just relate that to Sam and be done with it." So when Sam came up and I told him what happened, he immediately ... Why I don't know. Dumb idea at the time. But he said, "John, call him up and see if he'll sell you that franchise because it's the future. You've got to get it." I said, "Sam, I don't have time. I don't have the money. It's not for me. It sounds like an okay idea." He kept on persisting. So I came to the same conclusion – that I ought to make the call to get rid of it, dismiss it. So I called up the gentleman that had the franchise. We were discussing what he had been doing. He gave me all the facts that they had tested for the signals on top of the mountain and they were receiving three channels, two of them pretty good, one pretty bad. Doctor Mosch and Senator Berger and Joe English were going to invest the money in it, and they were going ahead with the project, and everything looked in order. They had already begun discussions with Jerrold Electronics to install the system. He said, "Do you have any interest in investing some money in this project?" I said, "No, not really. I just thought maybe you'd sell me the franchise and let me see what I could do with it." He said something that I'll never forget. He said, "Yes, I'll sell it to you." I thought, "What?" I heard this litany of ...

FROKE: ... of all the good things that were happening.

RIGAS: ... all the good things. That's not what I wanted to hear. True. My heart dropped right down and I said, "Didn't I hear this story of everything." He said, "Here's where I am. The other three gentlemen insist that I have to put money in it, hard cash. I don't have any cash. I'm just a little storekeeper." In those days people that were looking to sell their TV sets were people that were, in small towns, that weren't getting TV reception. So it was an ordinary thing. That's what John Walson did and Bob Tarleton. So here was this little TV dealer trying to bring the signal in and trying to sell his sets. But he said, "I don't have any money. They told me that if I didn't come in with what they put in, that it wasn't going to work for me. Then I told them I'd sell them the franchise and they told me it wasn't worth the paper it was written on, and they didn't need that. My lawyer and the borough council are telling me that they can't cross those streets so I think I have some value." So I said, "Well, okay. What would you sell it to me for?" He said, "I will sell it to you for $300."

FROKE: $300?

RIGAS: $300. I couldn't say no to $300 so I overdrew the checking account - which is true – and I had a franchise. So there's the ...

FROKE: That's the beginning.

RIGAS: That's the beginning. But I also will tell you this. Let me tell you the last part of that story because, in all honesty when I look back on it, I really didn't think that I was going to do much with it. I didn't have a clue, didn't give it any thought. And about two weeks after I had purchased that franchise and bought it from Jack, I got a call from one of the gentlemen that we had mentioned that was interested. He said, "Can I have a cup of coffee with you?" And I said, "Sure." Of course I was just a young man, about 26. This was an older person in his forties. Like so many young people, we look up to an older person. So we sat down and had a cup of coffee. Then he kind of blurted out, "You can't keep television out of Coudersport and protect your theater." The spin on it was that I had bought this franchise to keep television out of Coudersport to protect ...

FROKE: Oh, to protect the motion picture theater.

RIGAS: Yes. I said to him, "Joe, I wouldn't do that, and I don't expect that I could keep television out of Coudersport at all, and I wouldn't do it." So he said, "What are you going to do with it?" I said, "Well, I am going to begin to investigate it to see what I can do to introduce television in Coudersport because my sense is that there is interest in this project." So like getting into the Coudersport Theater, I saw it as an opportunity, a start – nothing venture, nothing gained. Once again, I didn't really dismiss it but I didn't know which direction I was going to take. Then he told me it wasn't worth the paper it was written on. I said, "I think there's some value there because I think the best way to do this project is to cross those streets. You can possible do it by going from tree to tree, but I do have that license." The long and short of it is – he said, "Well, John, if you're willing to throw in that franchise, we'll give you 25% of the company and we'll all be equal partners and you'll help us build the system because you have some technical background. None of us do." I said, "What will that entail in the way of cash infusion?" He said, "Jim Burger is a director on the local bank and he's made arrangements to borrow $40,000 which will more than get us started. Would you sign the note? It won't take any cash." That sounded pretty good to me. The problem was solved that I didn't have to worry about finding cash and at the same time I formed a partnership that had some substance in the community – which I didn't at that time. So we started down that road and built a cable system. We hooked up our first customer in March, 1953. I started the discussions in '52. Technically, my first customer didn't come on till '53.

FROKE: Did you sign the note for the bank loan of $40,000 then?

RIGAS: Correct. We all participated in that.

FROKE: So it was an obligation not only for you but also for the two other partners.

RIGAS: Yes. It was the beginning of a long history of signing bank notes all my life. I often said that if they ever put all my bank notes through a computer, it would choke it. For the first 30 – 35 years ...

FROKE: It was tough.

RIGAS: ... you just signed whatever asset you had to get the money to get started.

FROKE: The name of the corporation that you chose is Adelphia which obviously, then, comes from the Greek tradition. Did your brother come into the operation at that time?

RIGAS: My brother came in ...

FROKE: "Adelphia" meaning "brother".

RIGAS: Yes. My brother came in in 1954. At first I didn't understand the business, and I just thought it was a short-lived project. I remember my first salesman that I ever talked to about equipment was Milt Shapp who was the founder of Jerrold and who later on became 2-term governor of Pennsylvania. One of the things that Milt was saying to me was that we aren't sure that this industry, if you could call it an industry, is going to be around very long because at that time the FCC was studying, and put into a freeze mode, whether they wanted to issue more VHF licenses or go to all UHF. So as soon as that decision is made, there'll probably be a proliferation of TV stations coming to all these towns, and there wouldn't be a need for television by wire. But what I learned is after a year, one of the things that I began to realize, very subtly, ... and my partners that I had in Coudersport, never really felt this – and this is one distinction is that I've had partners that a lot who, when they could exit and make a few dollars, exited. But what I sensed is that in listening to people like John Walson and Joe Gans and George Barco, that people wanted choices. So, yes, we only had two channels in Coudersport. And, yes, in Wellsville, where we were going to go next for our second endeavor, is that Wellsville had the three networks with 6' or 10' antennas. But there was also now beginning to come on the horizon microwaving signals from New York and we began to realize that this business was not going to go away, as some people thought. In Wellsville, the gamble was that they were getting three channels in most parts of the town. That's my home town, and my brother was now involved in the restaurant with my dad. We talked it over, and I said, "Would you like to a partnership?" He said, "Fine." So we went to the village board and asked for a franchise. At the same time – now this is about '54 – we built a system in '55. Like I suggested, we could bring in two other signals so we could bring in five. The technology was, at that point, only capable of passing five signals. A few years later we went from five to twelve to twenty and so on. But – there the risk and gamble was, "Why do you think that with two more channels, duplication of the same networks because they didn't have PBS, ..." I'm trying to make sure that everybody understands that we began to believe that we were going to bring in distant signals, and we going to be able to find a technology that would pass us more than five signals. It was also an element of where we said, "There are pockets in this little village that are behind the hills, are located where they don't get good reception." We felt that we could give a better picture than sometimes was coming off an antenna. So we put that all together. So my brother and I joined a partnership. Later on we called it Adelphia which is the Greek word for "brothers" out of respect for our parents and now, after some 20 years, my sons are brothers and it's still apropos. I must say the name "Adelphia" had a pretty good ring all these years.

FROKE: It's got a wonderful feel about it.

RIGAS: Yes.

FROKE: Did your brother manage the Wellsville station?

RIGAS: He did.

FROKE: And you maintained the management of the Coudersport facility.

RIGAS: Right. What had happened is that Gus became very good at understanding the technical aspects and really managed Wellsville and built that system. He'd draw on my experience. Then I began to think that maybe I ought to leave my engineering job, which I did, and focus in on getting other franchises and working on the finances and understanding the business better. Building that system in Wellsville, .... Another things that I think that's kind of interesting to me is, as silly as it may seem today, one of the things that I was hung up on and I told my brother Gus, "When we go to the village, we should get a franchise for 100 years."

FROKE: All right.

RIGAS: And the reason was, there was always this fear that we were starting to hear that they could take this franchise away. There were no rules or regulations. So if somebody on council wanted to do a favor to somebody else and could say, "We're giving this franchise to this person – you no longer have permission to service this community," could they then force us to get off and just drop the service. That was a real worry!

FROKE: Sure, sure. The franchise problem has been, from the very beginning then, a serious one for the cable industry. You mentioned that you were concerned about Wellsville. You and your brother talked about the possibility of a 100 year franchise there. Could you carry that story ...

RIGAS: Yes, I think it's a...

FROKE: Did they give it to you?

RIGAS: We got it for 99 years. Although I must say that after a few years into it, I still have it framed someplace. That's kind of special. It's very difficult to find the words and to press upon people how frightening that was to all of us. Here we are, risking what little we had and believing in something so passionately and so important, signing those notes, mortgaging your home, mortgaging whatever you had, and knowing that you could never pay off that note if something was taken away. That's a terrible fear. So when you would go to city councils... In those days, the early days, we didn't enjoy the technology that we have today. The pictures were marginal. Like I've said, in Coudersport we promised two clear pictures. Our ads in the papers said, "Two clear pictures, better reception." But actually they were both snowy, intermittent, co-channeled where two signals would buck against each other and wipe them out. That was a huge problem. Then the council would get complaints. Then they would call you up before a council and say, "You've given us bad service, it's being interrupted. You're out of service for a day. You're out of service for two days." And yes there were times when we were out of service for a day or two. One, you didn't have a skilled technician. Two, you didn't know where the problem really existed. It may sound silly. But then you go in there and they say, "Well, here we got these other people that are promising better television, and we're going to give the franchise to them." Terrible.

FROKE: The threats were not subtle. They were very direct.

RIGAS: It really was. Just backing up a little bit ...

FROKE: There's a limit to how much you can take in risk in terms of financial investment.

RIGAS: The whole history – if you look at the first 30 years up until we got the satellite pictures – it was always an issue because pictures were very difficult to maintain and balance the systems. You didn't have the fiber optics. You didn't have the state-of-the-art that we do now. Balancing the system was a huge problem for all of us. Now we never talk about "balancing the system." Backing up to where we started in Coudersport, there are a couple of things that people I hope would understand. Contrary to what you would think, in Coudersport we promised to give them two channels. That's all we could receive. We tried for three but we couldn't get the third one. The two channels were reaching out 90 – 100 miles so the signals would come and go and fade. But it was the best we could do. We decided to charge $150 to hook up. The premise was that a lot of it was based on the fact that we better get our money up front because we didn't know if we were going to be around much longer so try to get it up front. So the monthly fee of $2.75 wasn't really going to make much difference in the long run. As a consequence, in Coudersport, people started to string their own lines off the hilltops with the theory that this week it's my turn to maintain he line on this street. Next week it's your turn. We won't have to pay that cable company anything, and we'll save that money. The $150 was definitely the wrong move. It was a deterrent. So after the first year, we didn't get a lot of customers. We had to find what was the best way to market in Coudersport. What we found was that $150 went to $125, to $99.50, $75 to get them on. Our signals weren't all that much better than the signals they were getting ...

FROKE: With their neighbors.

RIGAS: ...with their open wire and whatever they were using for awhile. But after awhile, people got tired of whose turn it was to maintain. So that was something we had to overcome. Now in Wellsville, what we were faced with was, at times, pictures that weren't holding up. We got a lot of complaints. It's the nature of the business. It was a heartache. My first operator that I had that stayed with me that maintained the system in Coudersport was my projectionist. On weekends when he was running the movie, the TV would go out. No way was I shutting down. And by the way, he wasn't going to go out anyway. It was very hard to get ____ these people. Later on the people that we hired devoted so much of their lives and talent, and they believed in it. That's why in today's environment, I tell a lot of our employees, "You have a legacy here that was based on people believing in this industry and giving of their talents with very little compensation, no benefits, working night and day to keep it going, getting beat up." If you want to talk about humility and being paranoid, you look at a cable operator in those older days because he was just being beaten up every time he stopped in for a cup of coffee – bad pictures, threatened to lose a franchise, telephone companies weren't letting you on the poles and if they were, they were charging exorbitant fees to make ready that was clearly just deliberate. The broadcasters were starting to reach a point where they didn't want you to bring in distant signals and so on.

FROKE: What you're portraying very effectively, John, is the requirement of anyone starting out in business to have a great deal of persistence and intention to stay with a project until it really plays out. You wanted to make sure that all of these difficulties were really solvable, and you were not going to be put down by them until it was really necessary to be put down. So the value of persistence in starting any new business is one of these factors that I think you're effectively describing.

RIGAS: It goes back to the people in the '50s and the '60s and the '70s. The people that service this industry from the very top and from the people that were vendors and technicians and the people that just work in the office making the collections – all of those people really and truly believed that what they had to offer was the right thing, the right way to go, and they weren't going to be defeated. They were going to fight that battle. When I mention people that I had early on – there were so many – that fought those battles so strongly. We wouldn't be here, I'm fairly convinced, if they didn't take up that at every level, not just the local, but the national level, the FCC level, the state level. All of the associations, state associations and the national associations helped us along the way. I well remember Strat Smith was one of our first counsels for our association and fought that battle as a community antenna TV. George Barco fought the copyright issues, and Yolanda fought along with him. Milt Shapp worked on equipment. But John Walson and Bob Tarlton explained to my why the coaxial cable had something that the broadcasters couldn't have - that was that broad spectrum. To this day it's interestingly enough, I firmly believe we still have, at the end of the game, a great advantage of that broad pipe. Yes, fiber is here. But the last 200' or whatever it is, we still have the coaxial cable that has served us so well.

FROKE: From the very beginning then, you appreciated the broadband significance of cable.

RIGAS: Truly. And I guess if I did anything right, ...

FROKE: You played for that.

RIGAS: ... and I believed in that. I think that when I say people wanted choices, I got to realize people to this day ... Here we are. We started with two channels, went to 5 channels, went to12 channels. People were saying, "What are we going to do with 12 channels?" Then we went to 20 channels and 35, 55 and 110. Now with compression we're talking about 200. And you know what? We still hear the same thing. When is ... I haven't got anything to watch! And that's partially true because we're flitting around and we can't focus on anything long enough to make it interesting, sometimes by nature. They still want choices. They want to be in control of their environment.

FROKE: I would like to go back again, just briefly, to some of the things that you have said about the attitude and characteristics of the early cable operators. You and the others of that time period came out of two turmoils in the United States. One of the obviously was World War II which you made reference to. Then the other one was the depression – the economic depression. Both of those, then, were personal and national tragedies. To what extent did those play on the attitudes that you cable people brought to the development of your industry?

RIGAS: I don't want to sound arrogant about this because I go back to Tom Brokaw's book about the greatest generation. That kind of caught on with a whole lot of people. My sense is that what the people had picked up on – it really was a special generation. That generation was built on a depression. They weren't given much, but they were built on a lot of strong character and perseverance. Then the war was an effort that we all united and were part of. That working together, that spirit of being and having strong values and faith, like I've suggested, sustained and built [our country]. The people that exited World War II and the homefront weren't people of inherited wealth that came into this business. They were just people, American people, with a dream and hope, not looking for a handout.

FROKE: Not expecting one.

RIGAS: Not expecting one. So if you ask me what the people were, they were an extraordinary generation. You know that I believed made a difference in the early years. How do I find the right words to express it? I can't always reach down. But I will tell you this: when you ask about the soul and the fiber of cable industry, it's been built on people that were visionaries, entrepreneurs, had great work ethics, and believed in the American dream at every level. So I think that still is here because I see so many young people that are aspiring and believe in what they are representing and who they're representing at every level – programmers, creative people, vendors, and small people. We still have a lot of little people that are getting started and God bless them. Part of what I see is that I have to do what my mentors did in the 50's and 60's to kind of make sure that the message that Bill Daniels was preaching remains, the Barcos, Ralph Roberts, Alan Gerry, and all those people.

FROKE: I'd like to go back and pick up on that franchise up in Wellsville for just a half a minute. I think you were about ready to say that at some point along the line you went back to the City Council and renegotiated the 99-years. Am I correct in that?

RIGAS: That's correct. After some 20 years, they felt that ... You know, in the context of things, I didn't think I was taking advantage of them.

FROKE: So despite all of the difficulties related to franchise and some of those early problems in cable, there was a certain amount of goodwill on your part to the City Council up in Wellsville.

RIGAS: Yes.

FROKE: Along that same line, John, when I saw you last you were concerned because the council in Coudersport had not reacted positively to your suggestion that the parking meters in front of your new, beautiful headquarters building be taken down as a matter of aesthetic appearance. Today as I drove by, I saw that those meters were down. What did you do to get them down?

RIGAS: Oh, ...

FROKE: Maybe I better not ask.

RIGAS: No. I felt pretty strongly about parking meters. There was a place, but I'm not a big believer in parking meters. They cause so much animosity with people, but I won't get into detail. I said, "Look, in front of our property, we'll pay you the year round for what you would generate and just get them out of there."

FROKE: It does make a better look to your building which you've done a remarkable job on as you've done with everything.

RIGAS: I want to back up a little bit, and then I'll move on to probably some more important thing. When we were building the system in Wellsville, I began to start to look for other franchises. I'd get on the road and travel all night and make my pitch. I remember in Erie, Pennsylvania, I went there to visit it – in 1957 – and there were antennas 6' – 10' high. I said, "Wow, this has got real possibilities." Now microwave was coming in, and I could bring in New York. New York City said that I could reach out and get the Cleveland signal. Erie had two stations at that time. I had spent a lot of time, going back courting the city officials and the mayor, trying to educate them as to the possibilities of bringing in cable television. I had one council member that didn't see any reason why we shouldn't have cable television. We were going to bring in three channels from New York and three channels from Cleveland and two from Pittsburgh. So we were going to give them in those days 12 channels. That was pretty darn good. We had the first reading at council and they approved it. The second reading was approved. Then one day I got a phone call at my office from the radio station. "Do you have any comment on what happened at council?" I said, "No, what happened at council?" He said, "Well, your application for franchise was turned down, refused." I said, "It was? Why?" What had happened is that at that time the UHF station which was local and owned by primarily the people that had the newspaper, had convinced the mayor that the future was in UHF stations, that they didn't need these other signals and people didn't need any more than these two channels. So they bought into it. I remember going to the gentleman that was representing this other group that had the station, and I said, "Why don't we do a partnership? There's a great future here." "No, the future is in UHF and cable didn't have any future." But the point is that we had a lot of that. So Erie didn't get cable for about another 20 – 25 years. It was delayed for that long. Also, going to that, spending a lot of time, you didn't have money, traveling by car, ... So the ones that believed in it were trying to find little nooks and places where there were antennas and you could get some franchises going. Going back to Wellsville now, we dropped the price from $75 to $37.50 and then we went down to $25. One of the best marketing tools that we had was that we weren't getting them on as fast as we would like. People were staying with their antennas. So we came up with the idea paying them $37.50 for their antenna. If we could buy their antenna, ...

FROKE: ... They would then have free ...

RIGAS: ... then we had them hooked because we took the antenna off the roof. So I had the biggest graveyard of antennas that you can imagine. But it got the job done eventually.

FROKE: One of our mutual cable friends made a remark to me several years ago that cable was the most environmentally sound industry in the country. An example of that is the taking down of those household antennas which were really eyesores. They were really eyesores.

RIGAS: Yes. We used to have a little advertising that I always liked. It showed a picture of an antenna with the birds nesting on it. We used to say, "Antennas were for the birds."

FROKE: The other point – I want to get you married, John. When did that happen and how did that happen?

RIGAS: The marriage?

FROKE: That you and Doris were married, yes.

RIGAS: Doris and I were married in 1953, February 1.

FROKE: That was before the Coudersport channel went on the air.

RIGAS: Right, just before we hooked up our first customer.

FROKE: Was Doris a resident of Coudersport?

RIGAS: No, she was a school teacher in Wellsville, my home town. I began seeing more of Doris when I got out of college so we decided to get married Feb. 1. February 1 in my life is a pretty remarkable date because on Feb. 1, 1946, I was discharged from the Army and that was an extraordinary feeling. Then Feb. 1, 1950, I graduated from college, I got my diploma, and our commencement speaker was Omar Bradley. Then Feb. 1, 1953, I was married.

FROKE: So you can remember very significant anniversaries just by keeping the first day of February in mind.

RIGAS: That's correct. And probably the best friend I had growing up as a boy, his birthday was on February 1.

FROKE: Wonderful. Is your brother Gus still living?

RIGAS: Sure.

FROKE: Is he still active in the cable business or has he retired?

RIGAS: No. He retired after 22 years. What had happened was the world was changing. There never was much of a market. There's where Bill Daniels and people like him that .... I'll never forget how important it was when I heard that Bill Daniels had acted as a broker to sell the systems in Olean, in Brandford, in Clearfield, to a gentleman by the name of Joe Sarax from Fairfield. He established a market. He got $100 a subscriber! Wow!

FROKE: Let's come back to that in just a little while here. We're going to take another break for just a minute or so.

RIGAS: Okay.

FROKE: We were talking about your brother and his 22 years within the cable industry and then making a decision to retire. Could you pick up on that just a little bit more?

RIGAS: First of all, my brother was an extraordinary partner. We've had a lot of partners, but he had the ability to understand a lot of the technical aspects quickly. He had a natural ability. He had the ability because he was involved with people in the restaurant – what was important to them, what the pricing should be. He had a wonderful, out-going personality. As important as all that was, ... As I was going out - reaching out, and we were taking all kinds of risks to get franchises and trying to raise money at the local bank because we didn't have investment bankers and money cities that were loaning us in the 50's and the 60's. It wasn't until the early 70's or late 60's that I began to get some interest from some city banks. There were actually a few coming to you. But in the early days, you had to go to the banks and try to get $20,000 or $40,000 in our case, to get started. The important thing about Gus is that all those years, he was a great, great supported and believer in the future industry, just like all the other people I have mentioned. Sometimes if I was hesitant and I was getting a little fearful, he would be the one that would say, "Do it. Go get it." I needed that. I needed a person like John Walson. I often remember, because in the context of things, you could go to the Pennsylvania and New York board meetings, particularly Pennsylvania, and the news was so bad because we were just being ...

FROKE: ... Bled to death, yes.

RIGAS: ... beat up all over. You just wondered if there was really a future, if we were going to be able to survive. It was scary out there because you had everything signed personally. I would go to a person like John Walson who was older than I was but was a great visionary and a risk taker that made the fiber of cable what it was. He understood what it was to have that broadband pipe. When I would get discouraged, he would start to enumerate why it was that broadband pipe was going to be able to survive over the broadcasters. We were going to be able to bring in these signals. Then he would turn to me and he would say, "John, you know, are you afraid of the future?" I said, "Well, God John, there's a lot of uncertainties out there." He'd say, "Well, John, I'll buy what you've got. I feel confident." I thought that if John felt that way, I think I'll stick around. So I stuck around.

FROKE: Is it accurate to say that Gus retired at about the same time you were able to bring your three sons into the organization?

RIGAS: That's exactly right. Giving a lot of credit to Gus and giving a lot of credit to all kinds of partners, .... In those days when you were looking for franchises, one of the best ways for us to do was to partner up with somebody that was local. That way it would help the council to justify giving it to us. So it was a local business in many ways. So we had a lot of partners along the way. A lot of them have exited for one reason or another. But Gus came to a point, where getting back to where signals or systems were being sold for $100. Then by the time in the 80's we had the introduction of the satellite services and the investment world started to take note of the great future out here. We went from $100 a subscriber to $300 and that was a plateau. Later on we were ...

FROKE: ... $1,000

RIGAS: We were still struggling. We never had any cash. We had $500 a subscriber. They we got to $800. Whoa.

FROKE: $1,200?

RIGAS: We got up to $1,200. Gus said, "You know, I've been struggling with this. I think I'd just like to do something else." But at the same time, lucky for me, Tim and Mike started to come in the business. Through their efforts, and now James and now Ellen, the family's involved, all making a contribution – a huge contribution. Probably I wouldn't be here at this long date, but the family has brought it to a different level, no question about it.

FROKE: You were serving as chairman and Chief Executive Officer which leaves no doubt as to who is in charge. Then I believe that Mike is the Senior Vice President?

RIGAS: I think we just made Michael and Tim CEOs of Adelphia Broadband. James is CEO and Executive Vice President, along with Tim and Mike, of Adelphia Business Solutions. Up here someplace, vaguely, is John Rigas, Chairman and CEO of ...

FROKE: ... all right. All right.

RIGAS: ... So we just did that last week.

FROKE: So you're separating, in a sense, your video service from the other entrepreneurial enterprise activities.

RIGAS: Sort of, but I think there's so much to be done out there and a challenge. I've never been one that understood all the importance of ... After all, we grew up, we didn't have titles so that's never been an important factor in my life.

FROKE: But they obviously have taken a very significant role in the development of the company now.

RIGAS: Wouldn't be here. I'm so fortunate because they all have extraordinary talent. I say that with all humility. It's just not nepotism. It's just that they're good at what they do, and they believe in it. I've listened to some of their views and interviews, and it's kind of interesting how they've picked up on what was important. They've never really talked too much. But now I have this knowledge that they're as strong about entrepreneurship and the future and that's just great!

FROKE: Freedom and choice are still very significant for them.

RIGAS: That's correct, and that's what it's all about.

FROKE: Is Doris active in the company in any way whatsoever?

RIGAS: Doris has taken an interest. Well, she always had an interest in the company. That's another thing that I perhaps ought to dwell on – that in the 50's and 60's there were very few women that I dealt with in the industry. Today it's a wonderful story to see how many people are at the managerial level, at the senior management level, entrepreneurial level, programming and creative and finance levels. But I want to make a point that the women in the 50's and 60's had a different concept of what their role would be. That was mothers. But they made a huge contribution and Doris did too. They were so supportive. They were home raising the children while you were out there on the road, night after night perhaps. They would take care of the office, take the calls at home from an irate customer, dispatch somebody. So they had an extraordinary role. And Doris did that. Beyond that, many times when I'd say, "I really don't feel I want to go to that meeting," or "I shouldn't go to get that franchise. I'm kind of tired." She'd literally shove me out the door and say, "There's where you belong. Go get it."

FROKE: That Tim and Michael and Jim were able to move in, along with Ellen, and provide, in effect, the next generation of leadership for Adelphia is directly traceable to her dedication to raising the family.

RIGAS: When it's all said and done, it's about people. Our customers are people that are very dear to me. I've grown up as a mom-and-pop operator, and I truly, truly enjoy talking to my customers out there and listening to their complaints and frustrations and growing up in that environment. The aspect of what is important – we look at the bottom line and we talk about the stock prices – I often remind people that I think one of the strengths, if not the most important strength, is the leadership is in place. Now it's not just me. It's my sons with a strong commitment, and they see the future. So the transition from one generation to the next is in place and there's no uncertainty. After 20 years that they've performed, I think they have a great track record, and that is as important for the future of Adelphia as anything that you can talk about.

FROKE: The values that you have talked about and are so important to you, have obviously with you and Doris have been carried on to your children which makes you feel good.

RIGAS: It's really about family, isn't it, when it's all through? We all sense that, and we feel that. The cable industry was a family, small in concept. It's still a family. You can go around and talk to people and they have that same feeling. But there's value there. I think that the industry has had extraordinary integrity and values. At the end, they were really interested in serving and doing what's right for the customer and our society. It really was! They weren't so self-serving that they were just looking out for themselves. Even today that's paramount. I believe that.

FROKE: You mentioned earlier that Doris had been a teacher in the school system in Wellsville. Does that have any relationship at all to the attitude that you and your sons bring to the public service nature of cable? In other words, I can go back and look at some of the things that Adelphia has done in supporting education on a state-wide basis and on a national basis. Adelphia is out in leadership in terms of the literacy movement. Adelphia is out in leadership in terms of the state public affairs and education network, and I can give other examples. Does some of that come from an influence that Doris had with you?

RIGAS: Oh, I think so. I think it comes from the fact that Doris came from very humble beginnings too. There was not one family of any wealth. She worked her way through college, and she had great work ethics. But along with that, she was a strong believer in people and in helping people. That's carried on. Those values, I think, ... My humble beginnings with my parents .... Even a small thing that I remember in the restaurant - in those days they had people they called bums. They'd come into the restaurant and Dad would give them a couple of doughnuts for breakfast and the coffee, a couple of hot dogs at lunch, sharing and all of that. I think that there was something special about first generation - Doris's family was first generation. Giving and understanding people and their needs is part of all of that. That's some of the value that Doris definitely brought to the table, no question about it.

FROKE: At what point ...

RIGAS: She has another thing, if we're going to talk about Doris. She had an extraordinary, unbelievable amount of energy and stamina. Where I might be going to bed, she was up there at night helping the children prepare for school the next day, getting their clothes ready, helping with their homework, whatever it took, and getting me started in my job. It took a lot of energy. A lot of mothers and people in that generation – that's what they did and they did it well. I can look at the George Gardners and the Joe Ganses, Irene now still a big part of that – how important a role women played at a different level – but it was huge. God bless them.

FROKE: Michael went on to get a law degree. I don't think that I know the educational careers of your other two sons or Ellen.

RIGAS: Do you want me to talk about a little bit of that?

FROKE: Yes. Would you talk a little bit about it?

RIGAS: Okay. Well here we are in Coudersport. A lot of that goes to what I just mentioned about Doris. Yes, I gave certain standards and values and believed very much, and Doris believed in them. So from that we had a good beginning. I had four children, and they all went to the public school system in little old Coudersport, Pennsylvania with graduating classes anywhere from 60 – 80. Now you only graduated with a class of 5, and you were valedictorian. I'm going to put that in.

FROKE: In Vienna, South Dakota. And it wasn't until I got in the military that I learned there was another place called Vienna.

RIGAS: Okay. It's a little larger, isn't it?

FROKE: Go ahead.

RIGAS: Okay. So the older son was Mike, and I'm not ... But I want to give them credit because I think they deserve credit and I owe it to them. But Mike went to Harvard undergraduate school. Then he stayed on and went to Harvard law School. Then Tim went to the University of Pennsylvania, Wharton School of Finance. Then James went to Harvard undergraduate, went on to Stanford and got his degree in law and his Master's in economics. Ellen went to Harvard undergraduate. So all of those just coming from this little community. Obviously mother helped them with her abilities.

FROKE: And all four succeeded.

RIGAS: Yes. They did pretty well. But I want to share a story that maybe doesn't fit in to cable, but there's a message here. When Mike was applying for college, reading all the catalogues that we brought to him, one day I remember he said, "Dad, what do you think about me applying to Harvard?" We were looking at more of the traditional schools near here. I said, "Well, why not." So he applied and was accepted. So one day I said, "Mike, why don't we go up and visit Harvard. I've never been on campus." We've never been ones that promoted Ivy League schools. We just felt that we wanted them to go to the best schools that they could go and make sure that they got their education because that was paramount. If there's anything inherent in my family's immigrants and all the immigrants I knew is that education is paramount. That was critical. You see so many successful first, second generations of immigrants that have done so well. So we went up and visited Harvard. AT the time, there was a demonstration going on. It was a dreary day, rainy, and the demonstration was that they didn't want Harvard making investments in Africa. We visited a couple of dorms, and they were pretty unkempt. As I recall there was a ham sandwich on the floor that was probably there for two weeks. Nobody bothered to pick it up. So we weren't sure we got the right image. So on this particular Friday morning, I said to Mike as he was getting ready to catch the bus, "Mike, today's the last day. You have to give a decision whether you're going to accept Harvard's invitation or not." Mother's in the background saying, "I think you ought to go to Harvard." I'm saying, "Well, it's your choice, Mike. It's whatever you want to do." Mike said, "Well, ...

FROKE: ...but don't forget that ham sandwich on the floor.

RIGAS: And Mike said, "Well, I think that probably coming from a small school, I don't know if I'm up to the work, and I don't know if it's too intensive. It's a big school. I think I ought to pass, and I'd be more comfortable in some other school that was nearer home." So I called up the Admissions Office about noon. Some lady answered and I told her that my son had been accepted into the class of '76. She said, "Congratulations. You must be very proud. You know that that's quite an accomplishment. How can we help you?" I said, "Well, it isn't that we aren't proud, but we just want to inform you that Mike isn't going to accept the invitation." And she said, "Oh, we don't like to hear that. You know that. Why is that?" So I went through the reasons that I suggested here. She said, "Well, we hear that all the time about different students. But we know he can do the work, and he belongs up at Harvard. If you wait a few minutes, the Dean of Admissions will call you up." I said, "No, I don't think that's necessary. We don't expect that." She said, "No, he'll want to talk to you." So the dean called and talked to me. He invited Mike and I to come back up and revisit the campus and stay there three days. He extended it for two weeks. When Mike got off the bus at 4:00, I told him what had happened. My recollection, Mike went in his room, thought about it, came back out and said, "Maybe I ought to go to Harvard." So that's why he went to Harvard and that's why a lot of the other children went to Harvard.

FROKE: He needed a gesture of confidence from someone – from you and from the Harvard University people.

RIGAS: Yes.

FROKE: With the cable industry's growth, and you now in a position with a cable operation in Coudersport and one in Wellsville, and you're traveling around the United States, at what point did you decide then that Adelphia would become a national, multi-system operator. Was that a conscious decision on your part that you were going to spread out from Pennsylvania and go into other states? What were the opportunities that came up?

RIGAS: It was a decision from practically the first 35 years to continue to grow it where we could, based on a philosophy that we could cluster as best we could and not just grow across the nation helter skelter. So the years in the 80's when we were acquiring... And by the way, the industry went through ... Most of us grew up by getting small franchises, applying for franchises and competing for them in the 50's. Later on, there became a situation where in the 80's we grew by acquisitions. We'd purchase systems. Our philosophy was that, where we could finance it and yes, the leverage was high, but we felt confident that we could make that work and the revenues and the future, although it was a challenge, but it would work in a few years. It was just like we did in the early years. So we stayed pretty much on the eastern seaboard with our properties. Then there wasn't a big game plan that we should become national, but the opportunity presented itself. The family looked at it together. A lot of cable operators had chosen to exit. Some of them preferred to deal with the family, and because they knew of our strong commitment to this industry, they were kind enough to put their lot with us. They could have probably have gotten more money or if not, certainly had more certainty, with other MSOs. When the opportunities came to become national, we felt that was the right time, the right place because of the clustering that was made available clear across this country. Then it kind of complimented itself with what we were doing with the broadband network and Adelphia Business Solutions where we're creating a national presence to offer all the voice data to our commercial customers. It wasn't that we set down 20 years ago. It just ... It never was my ambition to be the largest. I just wanted to survive. Somebody asked me, "What do you think of when you think of your biggest contribution that you made to this industry or you did?" The one word comes – survival, just surviving.

FROKE: Did Bill Daniels play a part in the growth of Adelphia beyond the local operations?

RIGAS: Absolutely.

FROKE: He would call to your attention, then, some opportunities that he thought you ought to look at.

RIGAS: He did that. He did the intangible too, from my perspective. Bill Daniels was a giant in that he offered us hope. He offered us leadership when there was so little of that. He could see the future, and he led the battle as so few others did. But he was there. As the years went by and Bill stayed with the cable, on a personal basis with Adelphia's relationship with his company to this day, we've have a great ... where they presented us with wonderful opportunities, helped us to make the transition. Part of that was, to me, Bill had a great affection for Adelphia, partly because of where we were located and our start and what we believe in. So Bill was a big proponent of value, value for the customer and ethics. As the industry matured, Bill was there to lead us a way. In the beginning, he led us a way that we should stay with the business and believe in it. We had a little value, and he brokered it. But beyond that, later on, he became an inspiration at a statesmanship level.

FROKE: John, we're going to have to take an extended recess in our conversations here in order to provide the opportunity for us to talk at length again with you at a later time and begin picking up on more of the details of your cable career and then your reflections on the future of the cable industry. But for this first session from the Brown Barn in Coudersport, I want to say thank you very, very much for being with us. We are speaking from the Brown Barn, one of the new facilities that the Adelphia Cable Communications Corporation has developed here in Coudersport, Pennsylvania. We've been visiting with John Rigas who is the President, Chairman, CEO, the top dog of Adelphia here in the Brown Barn offices. We want to express our appreciation to Hauser Communications of New York City for making this possible.

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Monroe Rifkin

Monroe Rifkin

Interview Date: Wednesday May 13, 1998
Interview Location: Denver, CO
Interviewer: Jim Keller
Collection: Penn State Collection
Note: Audio Only

KELLER: Monroe M. Rifkin, entrepreneur, cable television pioneer, and currently chairman of Rifkin and Associates, a cable television operating company. We are conducting this interview in his offices at 360 S. Monroe St. in Denver.

Monty, let's begin the interview with a little bit of your background through the end of your schooling.

RIFKIN: I was born in 1930 in Coney Island, part of Brooklyn, New York. I went through the city school system. 1947 upon graduation from high school. I decided to stay in the city and attended New York University where I graduated in 1951 with a Bachelor of Science in Finance. Upon graduation, I really didn't know what I wanted to do with my career, and not knowing, I decided it would probably be wise to have a financial background. So I accepted a position with one of the major accounting firms. It was then Touche, Niven, Bailey and Smart, subsequently became Touche Ross, one of the Big Eight, and I started carrying my briefcase. In New York State, in order to qualify and sit for the CPA exam, you needed three years of this type of public accounting experience, so I decided that I would do that. I would get my certificate, and then I would decide what I

wanted to do. I left Touche, Niven right after my three years, sat for the exams, got my certificate and then needed a job.

A former friend of mine at the accounting firm had left a year or two earlier and gone with a small company called TelePrompTer as treasurer. He approached me and asked if I would be interested in joining TelePrompTer and work for him as controller. I looked into this. I met Irving Kahn who was a very charismatic individual. He promoted me to the rafters and I thought I was landing the best job in the country.

After joining TelePrompTer I found out what a mess it was in. My friend was totally disenchanted. He was on the verge of leaving which he did about three or four months later. And I at the ripe age of 26 years old was made treasurer of TelePrompTer, which we then took public and listed on the American Exchange. It was a struggle in those days. The company was living from paycheck to paycheck. Irving was talking up a big blue streak, but there was nothing really behind it.

KELLER: Tell us, what were your products and what was your business at the time that you went public?

RIFKIN: The basic business was the TelePrompTer device, better known as the idiot box. One in which actors in television, as well as public speakers, could read their speeches or their lines by looking into this machine that was behind the camera, that was in effect a scroll, and the lines or speeches were pre-typed onto that scroll and you just faked it very well. The device had application, but the market was fairly saturated and it was a very difficult business, not going anywhere. One of the nice things about TelePrompTer though was the people. Irving was fascinating, but dangerous.

KELLER: In what way?

RIFKIN: Well, you never knew who he'd bring home to dinner. We had people running through the office, the likes of Sugar Ray Robinson, Bill Frugasi, Roy Cohen, Floyd Patterson, Cus D'Amato, and sundry and various sports writers. I should mention that TelePrompTer got into the closed circuit television business by buying up the rights to championship fights, and then sub-contracting, arranging for the television pickup and distribution, and then the exhibition of the event live in motion picture theaters throughout the country on a per ticket, pay per seat basis.

KELLER: What year was this? I remember when TelePrompTer was trying to distribute these fights to cable systems. Was that some time later?

RIFKIN: Yeah, it was shortly later. I guess I'm probably in the 1959-1960 era. 1961, thereabouts. Bob Rosencrans, who later became another pioneer in the cable industry, joined us at TelePrompTer and he ran that division. There were some other great people there. I discovered Jack Gault working in the mailroom and as I will tell you later, selected him to assist me in cable TV operations. Can't remember any more.

KELLER: You're getting a little ahead of yourself, but needless to say that Irving was a showman and loved the theater. Loved everything about show business, is that correct?

RIFKIN: Oh, absolutely.

KELLER: In fact some people say that he was a chip off the old block from his uncle.

RIFKIN: His uncle Irving Berlin.

KELLER: I don't remember him in the detail that you do. So then, he was always getting involved in various situations, various deals, trying to promote things and everything. You were what, more or less the rein?

RIFKIN: No you couldn't rein Irving in. I became the guy who had to pick up the pieces, and conduct a salvage operation usually. By this time, and I guess by now I'm in the 1959 era, I was promoted to executive vice president. So Irving was out doing his thing, and I was trying to keep the company alive and going. It was at this time, that the most peculiar thing happened. Irving was a great gourmet eater as everybody knew and never would skip a two martini, four course luncheons. I was more attuned to having a pastrami sandwich at my desk. And one particular day, I was doing just that, and the receptionist called me and said "Mr. Rifkin, there's a guy out here who wants to speak to whoever's in charge of the company. What shall I tell him?" And I asked where's he from. And she said, "He's from Denver, Colorado." And I said, I'm in charge, Irving's gone, so show him in." And this Dapper Dan name of Bill Daniels, walked into my office, introduced himself, and quickly said "I've been reading all about your company being in closed circuit television, vis à vis the fights, I want to tell you about another facet of closed circuit television." I said "What's that?" He said it's called community antenna television. I said "What's that?" Bill proceeded to tell me how there were probably 400,000 homes in the country at that time who were receiving television via wired systems because they were located behind mountains, or distances from television stations where they couldn't get a good signal. And the only way they could get it was some entrepreneur setting up an antenna, capturing the signal and then wiring it to the customer's homes. Sounded very interesting.

KELLER: Were you interested immediately, on the first pitch that Bill made to you at that point?

RIFKIN: No, I've got to tell you more about the pitch. Bill's pitch was that he was one of the founders of the earliest systems. That he currently owned pieces of several, but that he had more recently hung out a shingle in Denver as a business broker, and had formed Daniels and Associates. And he was undertaking to bring new capital, more plentiful capital, more sophisticated capital to the business. He thought it was a great buying opportunity. So upon questioning Bill, he told me what the market price was, these things would sell at three and a half times their annual cash flow. Didn't sound too high to a financial guy. I doubted that there was much of a business behind his words, but he promised to keep me informed. I asked him for data, more specifics, and he said he would do that. Bill came back to New York, probably six weeks later, brought me some financial statements of some specific properties that he thought could be bought. Sat me down for hours and kind of answered all the questions I could dream up about how the business worked, how it was regulated, what the upsides were, the downsides, the problems. My appetite was getting whetted. Bill came back a third time and finally said "Hey, enough is enough, are you guys going to move?"

KELLER: Do you recall any specific systems that he was pitching at you at that time?

RIFKIN: Yes. But let me get to that. Bill then said "Monty, I can talk to you here in New York all week long, but you've got to come out and see some of these companies. That's the way to do it." So I finally agreed in August of 1959 to fly to Denver, to be met by Bill, to go up to Casper, Wyoming, which was one of the systems that Bill owned a piece of, that he thought we could buy. To go from there to Rawlings, Wyoming, same story. To go from there to Farmington, New Mexico, same story and then to Silver City, New Mexico, to look at a system that Bruce Merrill of Ameco in Phoenix owned. Well, I agreed to do it. Got my first shock when I got off the airplane in Denver. Instead of Bill, there was a gorgeous, about six foot tall, statuesque woman, with two white Russian wolfhounds, meeting me in dilapidated Stapleton Airport. Introduced herself as Bill's wife of the moment. Do you remember, what was her name-Eileen? Bill's wife, apologized for Bill. Indicated that he had gotten another speeding ticket, had his license revoked, and that he was up in Casper waiting for me. So she put me on a plane to Casper, met Bill and went through that trip.

What was kind of interesting, met the Schneider boys, Gene and Richard, who were manager, chief engineer and co-partners in the Casper system. And what I found most interesting about looking at those systems, was the fact that the owners were kind of hiding them in back alleys. They had non-descript offices, kind of unidentified, and when I questioned why, they said they really didn't want to call attention to themselves. They really felt that they were stealing. That the public was paying them for an antenna service that in other parts of the country, most parts of the country were free. And there was a real inferiority complex amongst those operators. They were pulling a lot of cash out of the business, were reinvesting it, were expanding their cable lines, starting to build other markets, and they were obviously running a little scared.

I completed the trip, went back to New York, went into Irving's office, and said "Irving, we ought to gather every dollar we can raise. We ought to sell off any of our other businesses that we can sell and we ought to take every bit of capital we can get or use our stock and buy these cable systems. I think it's going to be a great business. Irving, to his credit, got right on that bandwagon. He was enough of a visionary that it didn't take much coaxing. He didn't like the part about parting with the things we were doing. But he recognized that we had very, very limited resources at TelePrompTer. We did do one thing, we conferred with our Vice President of Engineering who was Hub Schlafly, a man who was later around the cable industry a long time. At Hub's urging, we commissioned a study by some engineering group at the Bell Labs to allay our fears of direct to home television broadcasting, because that was about the time that the Russians had put Sputnik up in the air, and signals were starting to be bounced. The report from Bell Labs came back and said technologically it will be feasible to have satellite to home, but for a variety of reasons, governmental, localism, not wishing to upset the table of allocations amongst TV stations, they felt that there was at least a five year window before that would happen. So they were predicting safety, competition free from satellite until 1964.

Well, it didn't take a mathematical wizard to know that if you could buy systems at three and a half times cash flow, then you'd have at least five years of a comfortable life, you could return your investment and then some. So we set out to buy cable systems. I took the operation under my wing. That was my baby. I did the first three deals with Bill, we were not able to buy the Casper system, the Schneiders reneged at the last moment. We did buy Rawlings, Silver City and Farmington, and I believe we closed on those in December of '59 and January of '60. I now had three cable systems to run, needed some help, so I promoted Jack Gault out of the mailroom and made him the cable television operator. Got him some airline tickets. He ran around the country, learned the business very quickly, and actually became a very, very trusted and needed right arm.

Bill was the broker, and of course was very proud to have attracted "a large public company like TelePrompTer" to the community antenna industry. The acronym cable television came many, many years later. We got reasonably good publicity in the trade papers, a little bit in some national press, and our phone lines kind of started to ring. We had other independent cable operators around the country asking if we'd buy them. So I got very busy looking into further acquisitions. Next acquired the system in Liberal, Kansas. After that acquired the system in Elmira, New York. After that, actually started up a brand new system in Great Falls, Montana. At this time my memory gets a little cloudy.

KELLER: Why do you think that the owners/operators of those systems at that time, wanted to sell?

RIFKIN: I think they were...well for one, every one of them had investments of practically nothing. They basically started the systems by charging the first few customers a hundred and fifty dollar installation cost, and took the money and then built a little plant to get more customers and kept pyramiding it. So even at those low multiples, these people were making big money, and big for them. They were not industrialists, they were TV repairmen, appliance sales people, an automobile dealer in one case. This looked very good to them. They were also starting to feel the pressure of government. And I can't tell you a lot about what transpired in the mid fifties, by way of potential federal legislation, lawsuits, blocking actions by the telephone companies that wouldn't permit attachments to the poles. But there were a lot of obstacles and a lot of overhanging problems.

KELLER: I don't want to go into the specifics of this whole thing, but just to refresh your memory, these were the kinds of things that people were involved in. The FCC was investigating at that time whether or not they had any jurisdiction to regulate the systems and I know that scared a lot of people. The telephone companies were always a thorn in our sides also. So there were legitimate fears.

But at the same time Monty, you might recall, Bill also was pitching a rather wealthy entrepreneur also from Republic Life Insurance Company, C.A. Sammons, just about the same time. Wasn't he looking at that system?

RIFKIN: I think a bit later.

KELLER: Was it a bit later? I thought it was roughly around this time. The reason I bring it up is that you mentioned that indeed Bill was crowing about the fact that he had convinced a large company like TelePrompTer to get into the business. But I thought he was also going after Sammons. I'm not exactly sure what the timing was there.

RIFKIN: I think we preceded Sammons.

KELLER: Oh, you did, there's no question.

RIFKIN: Strangely enough, Bill never did another brokerage deal with TelePrompTer, at least during my tenure there, which lasted until the beginning of 1963. Nothing wrong. We loved Bill. But our doors were open. We found some other brokers. There was a Blackbird and Company, they were broadcast brokers. Started to do cable. They came after us. We had people come directly. And we just never clicked on another deal with Bill. My relationship with Bill, however, solidified, and shortly after we closed the first several acquisitions, Bill approached me and said "Hey why don't you come out to Denver and join me." You like this business, we get along fine, why not?" I said "Hey Bill, I've been west of the Mississippi one time in my life. That was to look at your cable systems. I'm a New York boy. My wife grew up across the street from me. We were childhood sweethearts. All our families were there. We couldn't dream of the wild and woolly West. Bill said "Well, I'm going to keep pursuing you, I'm not going to give up. I think this would be great for you and for me." Bill did continue to pursue me. And I guess it was not until three years later that I finally...well, three years later Bill was getting frustrated with me, and said "I've got to meet your wife and talk to her." He came to New York, met Rella, saw her reluctance, fear, what have you. Suggested that we come out to Denver for several days as his guest and he wanted to show us the community. We agreed to do that, using one of our vacation periods. We got to Denver. Bill rolled out the carpet, showed us the best of things. The snow capped peaks, while we were in the swimming pool at Cherry Hills Country Club. Had us meet some great people in town and kind of got us over the hump. Agreed to join Bill, relocate to Denver, which I did in March of 1963 with my family following in June when school was out and the kids were ready to move.

Bill had a partner, Carl Williams. We had met Carl before, just about my age. Great guy, lawyer by training. To some extent Carl was to Bill what I was to Irving Kahn, so Carl and I got along just great. I was greatly shocked a couple of months later to find that Bill and Carl were splitting up, and I was going to be forced to make a decision as to which one I went with. Were you there at the time?

KELLER: I was there at the time. I had the same decision to make.

RIFKIN: It was a very nice choice to make. I think either one would have proven great, but for whatever reason, I stayed with Bill. I had formed in effect, a management company subsidiary, so as Bill was brokering deals, syndicating deals, buying cable properties together with financial investors, they were then handed to me to operate. There were some great people around at that time, Dick Zell was our controller. Kip Fletcher was our engineer, and Jim Keller was there in the operating capacity, not brokerage. Allen Harmon was a broker. About a year later John Saeman joined us. Initially on the management side, and then moved on to brokerage and started a great career with Daniels. I quickly got into the financial side of things. I never liked brokerage. But I did like the syndication side of the business, the financing of acquisitions, so I started working with Bill, in addition to management, putting groups of investors together to buy systems which we then managed. It was during that period of time I think I went on the NCTA board for the first time, and was absolutely fascinated by the people, their different backgrounds, their common objectives, their approach to problems, their doggedness, their entrepreneurial spirits. These were people like Frank Thompson, Ben Conroy, Bill Adler, Al Ricci, Al Malin, Marty Malarkey, the list goes on and on. It was just a privilege to be working with them, to be fighting along side of them, and those were all great days. Scary days, disaster always loomed around the corner. But we somehow managed to conquer each adversary that presented itself.

KELLER: Do you remember some of the companies that you brought into the business and were then managing?

RIFKIN: Our prime contact was a gentleman name Royal Little who is known as the father of conglomerates in the country. He was the founder and he formed the Textron Corporation. I guess this was back in the fifties. And was the first to really use a publicly traded stock to acquire undervalued companies, utilizing inflated stock price certificate as consideration and he bought Bell Helicopters and any number of disparate things, companies under the banner of Textron. Roy had retired from Textron, and formed a small business investment company, an SBIC called Narragansett Capital Corp. headquartered in Providence, Rhode Island. It had public shareholders. No it borrowed money from the Small Business Administration and was permitted and encouraged to reinvest and help small businesses grow. Bill had done one or two deals with Narragansett. He handed them off to me, and I proceeded to make numerous deals with them, working with people like Al Hartman, Harvey Sorrells...

KELLER: Do you remember whether in addition to providing financing capital Narragansett also took equity in the companies?

RIFKIN: Oh, surely. That was their thing. They could provide the loans but obviously it was always with a substantial equity kicker. Roy Little's desire and I heard him say this a dozen times, throughout the rest of his life, that his style of investing was to find competent people that he could trust and that were willing to put some of their own money into the deals, and stake their rewards really on the upside, and that's what he found in us. And we made a great combination. When Narragansett, by regulation could no longer invest with us because of concentration problems in one industry and in one company, Roy then moved us to some of his other pools of capital, one of which was the Memorial Drive Trust which was the Arthur D. Little Employees Profit Sharing Trust. And we made several deals with them. We were also put in touch with another SBIC in Boston called Boston Capital Corporation, a company where we met a gentleman named Courtney Whiten, who oversaw their investments. And that company was also an investor, I believe in Spencer Kennedy Laboratories an equipment supplier from Boston.

KELLER: Didn't they also go into Continental at that time - Bud Hostetter's group.

RIFKIN: Yeah. But of course, Bud Hostetter, that's an interesting story. After joining Bill, one of the first assignments I was given was to go to Keene, New Hampshire and attend the board meeting of the little company that Bill had formed to acquire the Keene, New Hampshire system. I went to that meeting, and one of the other board members was a fellow even younger than I, and his name was Amos Hostetter. Amos had recently graduated from the Harvard Business School, was working for a small investment group in Boston, and I think his group had been invited to make a 50,000 dollar investment in the Keene, New Hampshire system. And Bud was overseeing it. Needless to say, Bud fell in love with the business. Shortly thereafter resigned, and went into the business himself and you'll hear his story directly.

KELLER: I don't believe that Bud ever bought any systems in the early days. I think he always got the franchises then built them.

RIFKIN: Bud and Irv, their start in the business, and we were close friends and were always comparing notes and consulting with each other. He and Irv Grousbeck, his partner, each selected a market. Grousbeck took Quincy, Illinois, Bud took Tiffin, Iowa. They each moved there. Physically relocated and pursued the franchises and for many, many years, all they did was get franchises and build as opposed to acquire.

In 1964, after being with Bill for close to a year, I recall a meeting we had with a former broadcast engineer whose name gets away from me, but who was representing a man called Jack Kent Cooke, a Canadian who had recently located to Beverly Hills, California, whose avowed business purpose was to acquire newspapers and cable television systems. Bill and I had a lengthy meeting with this person consulting for Jack, which led to meetings with Jack, excellent rapport between us, and the next thing that happened, Bill engineered the sale of several of the portfolio properties we had, owned together with Narragansett to Jack Kent Cooke, who had no organization at that point, so he engaged us here in Denver to continue to manage the properties for him. And I think those properties were Barstow and Laguna Beach and Keene, New Hampshire.

KELLER: My first managerial job in Barstow and Laguna.

RIFKIN: Is that right?

KELLER: For Daniels, by the way.

RIFKIN: We hit it off really well. Jack Cooke had lots of resources. He wanted to move very quickly. And he did start to move quickly. Other brokers approached him with deals, even though there was potential conflict of interest. Jack would contact me, ask my opinion on the deals. Finally he got my wife and I to Beverly Hills and tried to get me to join him. We came very close, in fact we went house hunting out there, even made an offer on a house which fortunately wasn't accepted, and it gave us time to rethink the decision.

KELLER: I never knew that.

RIFKIN: Nobody ever knew that.

KELLER: Did he go then to Bill Bresnan?

RIFKIN: Yeah. One of the systems or a couple of the systems Jack then bought from Frank Thompson and Paul Schmidt were Rochester, Minnesota and Mankato. Bill Bresnan was the manager in Mankato, and Jack took a liking to him and moved him. And he then came down. Life at Daniels. Very interesting. Bill Daniels and Associates doing well. Bill, a great partner and boss, sharing in the spoils with people. But unfortunately always living on next year's income. Bill was a soft touch. Anybody who he had ever known in his prior days, hitting on bad times would come through Denver or call Bill. Bill would help them out. Bill didn't really give himself the time to build equity. But really interested in living high and fast, paying alimony to ex wives, flitting around the country super first class. So constantly getting himself behind the eight ball, to the point at which he'd have to sell off some assets to get caught up and start that cycle all over again. So Bill was reasonably late in amassing the wealth he should have, considering where he was and his capabilities. But we had funny times at Daniels. He came in one day and announced to his controller Dick Zell that he had just bought a jet airplane from Storer and Dick was supposed to figure out how to pay for it. We almost had a revolt as I remember. A bunch of the people were going to gang up and say "Bill, we can't live through this. It's the plane or us." And my words were "Don't do it guys, because it'll be the plane. When Bill sets out to do something, he does it. He'll work it out, it will all work out." And it did.

KELLER: I remember Dick tearing his hair out. Coming now to the mid '60s, 1963. Bill and Carl split in what 1965?

RIFKIN: No, it was in '63. It was a month after I got here. The business in general growing, picking up, companies that in the old days only thought they could make it in underserved television markets. No signals available off the air, one, perhaps two, now we're moving ever closer to the bigger cities, to the core cities amidst great problems in the business with importation of distant signals, independent signals, local origination just barely starting, people putting weather channels on the air. Needless to say, the entrepreneurial spirit moving forward and the country was slowly getting wired. And more and more sophisticated money was coming into the business during those years. Jack Kent Cooke, Republic Life Insurance of Dallas.

KELLER: Question for you. It's a good time to bring this in right now. Most of the financing for the companies that eventually ended up in Denver, were from banks in New York, Boston, Chicago, Dallas, but very, very little of the money actually came from the Denver banks. Can you ever explain why that was?

RIFKIN: The Denver banks were really very small in terms of total assets. They were really not terribly unlike neighborhood banks. As a matter of fact, Denver did not have a branch bank.....

KELLER: No, they did not at that time.

RIFKIN: So, with the exception of a couple of downtown banks that catered to the oil industry, Denver, Colorado was characterized by a multitude of individually owned banks. Practicality, they were not large, didn't have the lending capacities. We took the money that was sent to banks that were willing to be a little bit risky, in order to earn slightly better returns to recognize the cable industry and make loans.

KELLER: Tell me about that term risk from the banker's perspective at that time, roughly mid '60s.

RIFKIN: Well, it's hard to pin it down specifically, but clearly it was an industry fraught with risk. The satellite risk never materialized during those days. But we were fighting the broadcast industry very, very strongly entrenched, strong lobby group in Washington. They got their way with government and the regulatory bodies. Cable under the thumb of the telephone companies. At points they would not permit attachments to their poles. What did cable operators do? They put their own pole plants up, which were an eyesore in the community. They were terrible, they were not safe. But it was a means to breaking down these barriers. Copyright litigation being threatened, because the cable industry was picking up programs and reselling them without compensating the property rights owners. And also the broadcast industry. Television stations were coming on the air right and left, changing the balance of "free" television. Rabbit ears reception vs. antenna reception vs. cable reception. Huge allocations of UHF frequencies which meant potentially thousands of additional stations. And the broadcast industry flourishing. So tremendous potential competition there maybe to twelve channels. From there a step up to twenty three channels. Then we found that amplifiers were available that we could pass thirty six channels. Every one of those step ups kind of created technological obsolescence and the need to upgrade and replace. Enormous problems with the cities. Cable became a political football. Cable was in a lot of small towns. Mayors wielded an enormous amount of power. Some of it unscrupulously. Hire my brother-in-law to do your maintenance work or else. Franchises or operating rights up for renewal. Well, we're not going to give you a renewal, unless you do A B C and D. So it was a good industry, but certainly confronted with huge problems.

KELLER: That's a good statement of what the fear of the bankers was at that point. But you also mentioned earlier, while at TelePrompTer you looked at a system, and you were looking at about a three and a half times cash flow return. Do you recall the progression of when this went from three and a half to where it started to skyrocket?

RIFKIN: Yeah, I think by the time I got to Daniels in '63, I think the market multiples were more in the five, six, seven times range. Which as a buyer, meant you took quite a bit of a gulp when you signed up for that program. I think by that time, monthly rates had risen to as high as five dollars a month. Programming cost was zero. Operating costs were relatively small and mostly fixed, embedded costs. So once you got to the point of covering cash flow break even, out of every incremental five dollars a month, better than four, four and a half of it flowed to the bottom.

So 1966, '67, Wall Street starting to recognize cable. One of the other entrants to the business in the early '60s was a company called H and B American. They were publicly traded on the American Exchange as I remember. And they were a company that was formed to acquire the Jerrold properties. Jerrold, the leading equipment supplier, hit with anti-trust and forced to divest of their operating properties. So there was H and B, a public company in the industry. Another sophisticated type of money that came to the industry was through the Harris family.

Burt and Irving Harris, wealthy entrepreneurs owned television stations, got into cable. I can't remember the name of their company. But they merged with a company called Cypress Communications. Cypress had been formed by a fellow named Randy Tucker, who was a partner in the Wall Street firm of Hornblower and Weeks. So cable was sort of growing up and starting to become visible.

KELLER: People, especially the bankers liked that consistent cash flow, month after month after month. You could demonstrate where it was going.

RIFKIN: Right. And those of us in the industry of course, looking for another form of currency we could use to continue to develop and grow in this capital intensive business. So we started kind of looking at the public markets. My recollection is that Cypress was the first of a raft of us to come public. They had the entrée of course of the Hornblower Partners behind them. About that time, I sat down with Bill Daniels and suggested to Bill that this era of public companies was coming. That we had an opportunity to be a leader in it, and that this was something I had kind of done before, I had been trained to do and that I'd love to do again. So I concocted the idea of forming American Television and Communications Corp, a holding company to in effect acquire by merger the fourteen or fifteen different entities that Bill and I and other investors owned, and then to take that company, which would number about 45,000 subscribers at that point, and take that company public, and create a currency we could use for further acquisitions and to facilitate cheaper financings. Bill thought it was a great idea, didn't personally want to have anything to do with it. He didn't like the idea of living in a fishbowl. But he was very pleased with the thought of securing liquidity for his equity interests, and having the ability to sell pieces of his stock off at any time. So I formed ATC, moved across the street from Daniels into eleven hundred square feet of space. Took Dick Zell with me. Hired a secretary, and we were off and running. This was 1968. The other thing I did at that point, I recruited Doug Dittrick from Schenectady, New York where he was the general manager of what was then the General Electric Cablevision division, GE being a broadcaster had gotten into cable. We had met Doug, liked his style, his abilities, and got Doug to sign on. So it's late '68. The Securities Commission slowed our initial sale of stock down a bit. We didn't conclude it until March of 1969. I'm not sure, but I think we might have raised two and a half or three million dollars, which was a great sum at that time. But we were off and running. And there were other public companies that followed us. Jack Crosby brought his company public, and I can't remember the name. Bob Rosencrans, who had been at TelePrompTer observed what we were doing, went off on his own and formed his cable company back in 1960 or '61. And there were probably, must have been others.

KELLER: The Schneiders were going public about that time too, weren't they?

RIFKIN: Well, no. The Schneiders actually ended up taking over Gencoe. Remember Tubby Flynn and Jack Crosby formed Gencoe, and it was headquartered in Oklahoma. And then Schneider brought Livingston Oil in. The other one was TCI. Magness came public about that time also, or shortly after. So there were a number of us. It was great fun. It was certainly an up period. I think by 1969, some of the barriers were breaking down. I think the telephone companies were granting attachment agreements. The industry had demonstrated that we could survive and grow in two station markets. So there were more markets to be franchised and built. It was a period of great activity.

KELLER: Was it at this point that you were convinced that it was a business?

RIFKIN: Oh yeah, it was a business. The Wall Street investment community recognized us. Insurance company lenders recognized the industry and were now willing to grant loans for ten year periods which had previously been unheard of. So things were generally looking very, very good, but with clouds always on the horizon. I don't think from Cable Association board meeting to board meeting we ever had a three or four month period where there wasn't some crisis that caused us to run to Washington and convene and figure out how to do battle.

KELLER: Were you on the board continuously then from this point until you were chairman in 1983?

RIFKIN: Yes. I don't remember when I went on the board. It was early in the game. I think I served for almost 20 years. And I think there was one period where I might have gone off for one year, but I can't recall. But even if I wasn't on the board officially, I was at the meetings. The meetings were great. Quite often they were boondoggles held in nice parts of the country, good golf courses. It was a fun loving crowd. We had good times. So we're all growing at 1970. We undertook at about this time, I can't remember the order, but ATC was growing, so I recruited Jack Gault, my former TelePrompTer comrade. Hired Bruce Lovitt. Bruce was the legal counsel for the trade association and we could foresee an intensive period of franchising dealing with local governments. Figured we need somebody savvy in the political arena who also knew the ins and outs of the regulatory oversights and regulation. And Bruce served for us in that capacity in our Washington office for a number of years.

Did something interesting. I believe it was 1969 or '70. I had been vacationing in Florida and picked up something in the paper indicating that Disney was contemplating building a major amusement park up in the Orlando area. I think Orlando was served by three television stations at that point. So I got the idea of our seeking a franchise. Thought it would be one of the great markets if Disney ever did come. Orlando was a sleepy town but larger than those that cable was typically in even at that time. So we proceeded, and Jack Gault headed up that operation. And we succeeded in winning the Orlando franchise, I believe it was 1970. To our dismay we found out that the city of Orlando was only a small part of that metropolitan area, and we needed twenty or so additional franchises, cities and counties to round it out. And it took a couple of years, but we did get most of them. We at ATC at that time, continued to emphasize the franchising game, and we selected secondary markets. Big cities, by historical standards, but not the major metropolitan areas. So we franchised over the next several years, that being probably 1970 to 1973. Places like Lynchburg, Virginia, Albany, New York, Champagne/ Urbana, Illinois, Shreveport, Louisiana, Jackson, Mississippi, Green Bay, Wisconsin, Fresno, California.

KELLER: A number of others in Wisconsin.

RIFKIN: Fond du Lac with Don Jones, and Appleton, Norman, Oklahoma. And I'm sure I'm missing. In 1971, we acquired some systems from the Jefferson Standard Broadcasting Company. It was called Jefferson Carolina. It had systems in Charlotte, North Carolina and Greensboro, and Savannah, Georgia and some others. We paid for that acquisition partly in stock and we gave the seller registration rights which they exercised in 1972, causing us to file with the SEC and go into registration for their shares. At about that time, we concocted a very exciting potential transaction. That being a merger with Cox Cable, which was an offshoot of Cox Enterprises which had similarly gone public, and was probably along with ATC...together we were the two more highly regarded companies in the industry. We did cook up that deal. The board of directors agreed all issues were resolved. We were horrendously excited about what this was going to form. And as the announcement came out, shortly thereafter, well, before the announcement came out, we put our registration statement for Jefferson, Carolina on ice, because we couldn't move forward with stale financial information and disclosures, and could not proceed until the merger was concluded or until we included details of the merger. Today's a funny time to be talking about this, having heard about the Justice Department just shooting down the PrimeStar deal. But the Justice Department challenged our little merger, feeling it would be anti-competitive, which was outrageous. We tried to lobby. We had several meetings with the Justice Department. We felt that if we litigated and went through the struggle, we would prevail. But strategically decided that it would take several years to do that, and the two companies would be paralyzed in the meantime, but if we closed the transaction, no cities would grant us an additional franchise wondering if the Justice Department prevailed, and we were split up again, who would do what. With hindsight, one of the sorry situations that should have happened. It would have been a great move for the entire industry, and would have accelerated growth very dramatically. We were sued by Jefferson Carolina because we didn't utilize our best efforts to register their shares and get them sold. We felt we were right. Some very high powered lawyers told us we were right. We decided to fight the issue. We went to court and were horrendously disappointed to find that the judge ruled against us. The judge felt that our obligation to get those shares registered and sold preceded and preempted our obligation to all of the shareholders to conclude the merger, and we ended up with an unfavorable judgement of some two million dollars which we paid. One of the more disappointing moments in my career.

KELLER: A question that has always been in my mind about that. With the political situation at the Justice Department and with the huge, huge political clout that Leonard Reinsch had at that time, why that couldn't have been put together.

RIFKIN: Jim, I don't know. It might have been, Leonard of course a Democrat. And usually it takes a Republican group of appointees to favor big business. So typically, in those days....

KELLER: That was the Nixon Administration at that time.

RIFKIN: Don't know. Leonard was along in years. He was still chairman of Cox. And he participated in the merger discussions and was all for it. But couldn't get it done. The event in 1973 that was momentous. Got a phone call from the Morgan Guarantee Trust Company, one of ATC's bankers. Fellow who called said he was calling on behalf of another client of theirs, Time Inc. And I said "Oh?" He said they would like to talk to you and they have engaged us to Morgan Bank to be the go between in selling our Time Life cable systems to you at ATC in return for your stock. Sounded interesting. Time Life owned five or six broadcast properties. Had used those around the country to muscle or buy into some cable operations. Terre Haute, Indiana, San Diego, California, don't remember the others.

KELLER: San Diego was a big one.

RIFKIN: Yeah, that was a big investment. They did not control those systems. They had minority ownership in some. I think a couple of majority ownerships. But in any event they were not pleased with the progress they were making, and in their words they wanted to hitch their wagon to our star. We were delighted with that, so we entered into negotiations, discussions. As I remember, my dealings were primarily with Barry Zorthian who headed Time Life Cable. One of his deputies was Nick Nicholas who was a young guy out of the treasurer's office. And Barry reported in turn to Dick Munro who was a group vice president, video who reported to Jim Sheffley. We concluded those negotiations favorably. I don't believe we issued all stock. We didn't want to issue that much. I think we gave Time sufficient stock so that they owned nine percent of our company. And we paid the balance in cash, perhaps even notes. The first thing I did when that transaction closed, I invited Jim Sheffley, the president of Time on our board. At first he thought that we were too small and he wouldn't waste time with that. I twisted his arm and Jim came on our board. I think it was a great move for us. He was a great board member, a very pragmatic, tell it like it is, get right down to action kind of guy. Gave us further credibility out in the financial community and throughout the industry. Started our relationship with Time Inc. I guess I'll continue that one because that's really the story.

We got along fine. I think that Time liked what we did. Made a huge mistake back then. Among the Time Life properties, was a majority interest in Sterling Television, which was Chuck Dolan's company that had the franchise in Lower Manhattan. TelePrompTer had the franchise in Upper Manhattan and Harlem. And they were struggling, all of them, something terrible. As we were going through the negotiations, Time wanted us to also take over Sterling. And we were concerned that the problems there were huge. That growing out of those problems would have been an anchor around our string of successes and growth pattern. And we told them that no, if they insisted on Sterling, we wouldn't do anything with them. And so they agreed to do the deal, to retain ownership of Sterling. In fact, we helped them do some planning to buy Chuck Dolan out, so they could gain some tax loss benefit from Sterling. I think about that time Nick Nicholas was put in charge of Sterling Manhattan, and Thayer Bigelow was his deputy. We started informally consulting with them and exchanging a lot of information and generally helping them.

Nineteen seventy five brought us...of course Chuck had just started Home Box Office or they started it shortly after Chuck Dolan left, I don't remember. But Home Box Office was the first pay television distributor of any import. It was primarily bicycling films around. Then it started using some microwave over the southern tier of New York. Jerry Levin I believe was then hired and running it. Sid Topol was at Scientific Atlanta, dreaming of ten meter satellite dishes in everybody's backyard. Sid convened a meeting of Home Box Office, ourselves and Bob Rosencrans and put forth the idea of HBO distributing via satellite. Levin ran with the ball. His company let him take the plunge. Rosencrans and we each put a ten meter dish in place, his in Vero Beach, ours in Jackson, Mississippi. And on September 30, 1975 we brought to our respective cable systems, the Thrilla from Manila, which was the heavyweight championship fight of the decade. It worked like a charm. And that's really the event that if anything is responsible for the industry being where it is today, it was that event. It was the demonstration that the economics of a real time network were there. The dish at about 100,000 dollars was not a great obstacle. Most cable systems could afford it. And the ability again, on a real time basis to have Hollywood films, live sporting events, etc. as a product offering for our customers, just opened up revenue stream that fueled enormous growth, probably ever since, but primarily for the six or seven years immediately thereafter. And those six or seven years gave operators the ability to now go into the major metropolitan areas and come in with a total channel lineup that made what was previously available to them pale in comparison.

KELLER: There's no question it was the watershed. It's interesting, we were in a meeting with Sid Topol the other day, and he divided up the eras of the industry from the pre-satellite era, the satellite era, up to 1992 and then he put it into the digital internet area.

RIFKIN: Well, '92 I'd sort of make the satellite era '75 to '95.

KELLER: Please go back again and name those men that were in that meeting that first formulated the idea.

RIFKIN: Yeah. It was Sid, and Bob Rosencrans, myself, Jerry Levin and I don't remember if Nick was there or not.

KELLER: Was there an engineer involved in that deal at that time?

RIFKIN: Well, Sid was an engineer by training, but I don't remember...

KELLER: This is the first time I've ever heard of that meeting.

RIFKIN: At Times headquarters in New York on the 34th floor. Shortly after that, Ted Turner upped and Ted had been a great help to the industry with his WTBS, a great independent station and Ted was one of the broadcasters who was friendly to the cable industry. He was good for us, we were good for him. Carriage of his station expanded his advertising base dramatically. He programmed accordingly. So he became about the leading independent in the country and the cable industry wherever it could, off the air, via landline, microwave was carrying WTBS.

Ted immediately followed HBO, rented his satellite space, and started distributing TBS. We all know what came from Ted. Viacom, a major company, a spin-off from CBS, good size public company at that point in radio, in cable and I believe some television. Program syndication. Also got into the pay TV business. And really the cable industry was off and running. The programmers followed the mold that had been set for them. Those were great days. Those were days of construct new markets as fast as you can. They penetrated quickly. The overlay of offering pay services to our customers, gave another stream of revenues a great boost. Also, the more channels offered in the basic or expanded package, penetrations moved beyond where anybody had anticipated where they could have been.

KELLER: But not easily, as I recall and I'd like you to elucidate on this also. When the industry was going to the financial groups, the banks and so on, at first they wouldn't permit the use of any pay television revenues in your financial projections. Do you recall that? And it took some time before they were able to recognize that was part of our business.

RIFKIN: Yeah, I don't remember it that distinctly, Jim. I can understand at first, really for a very short time, the pay revenues were debatable. Were the film companies going to license the films? Or were they going to do it themselves. Remember, they came up with their own distributor, Steve Roberts headed it, Prevue. That was going to go head to head. And they did. They showed up at a convention and they hung around for about a year. None of the cable operators wanted to deal with them, and they folded. So for a short time, there was some question. But I don't think it took very long to see the appetites of the consumer and the monies that started to flow to Hollywood. Remember, that was pretty much before Blockbuster and before video stores, so it was a great source of revenue for the film companies. So I think that started to be accepted pretty well.

KELLER: At first they wouldn't accept these revenues at all, then they said we'll accept 25%, then 50%. So it wasn't in the eyes of everybody to be the real

watershed of the industry.

RIFKIN: No, it took some time for that to develop, but it sure got things going. Shortly thereafter, the FCC withdrew their licensing requirement to build the dish. So then all you had were your environmental questions. The engineers started coming up with smaller dishes which made it cheaper and easier, so the dishes could go into small cable systems. It was just a great day. Market penetrations which we used to think would top off generally at 35 or 40%. We were suddenly seeing 50 and 60%. So, great days.

Back to Time Inc., they took their position with us in 1973. Maybe in 1975 or '76 they came to us indicating that there were blocks of ATC unregistered stock around, shares we had issued in acquisitions that were being offered in a private transaction. Did we have any objection to their buying it? We had no objection. We had a love match going with Time, Inc. and they with us. We had no formal stand still agreement. That's an agreement typically where you try to tie the hands of a major shareholder from buying additional shares and perhaps getting control. So Time Inc. bought that block of stock.

KELLER: Who was selling that stock. Do you know?

RIFKIN: I can't recall. I think it came through some broker in Boston.

KELLER: But Jefferson Pilot never had any stock at that point?

RIFKIN: No, their shares were ultimately registered. Maybe the settlement was we bought it back, but paid them the difference between what they could have gotten in the market.

KELLER: But this was not the block that was up at that time?

RIFKIN: No, I don't think so. It might have been some of Bill Daniels stock. I just can't recall.

KELLER: That seems to ring a bell.

RIFKIN: In any event, that took Time to, 14 or 15% of the stock. A few months later they came back to us again and said you know, if we were to own 19% of the stock, we could consolidate for financial statement purposes. I believe we at ATC had turned into the black and were profitable at that point. So it was desirable for Time Inc. to in effect pick up their share of our earnings in their statements. So there was a good logic. Again, they said they had no ulterior motives. Would we bless it? And they said if we wouldn't bless it, that's the end of it. We blessed it. They went into the open market and bought up to 19%. Got to where they wanted to be. Still we had no agreement. They came back to us later. I guess now we're into 1977, maybe the beginning of 1978. They bought some more shares. And I think they ultimately got up to about 25% of the ownership. Clearly a controlled block, but never exercised any element of control. They had their one seat on the board, and they were just perfect corporate citizens. Our relationship with the people on the operating line as well as the Time Inc. management board was excellent. It was not a surprise when in 1978, Dick Munro and Nick Nicholas approached me and said "Hey, doesn't it really make sense for us to kind of formalize this informal marriage and see if we can't acquire the entire company? We were not surprised at this approach. We met with them. We had certain criteria. We wanted a transaction to be in the form of a tax free exchange so that those of us who didn't wish to cash in their portion could take Time Inc. securities and hold them. And we concocted a form of a deal that would work. It was constructed as a merger of ATC into Time, Inc. We couldn't agree on the total consideration of price. We parted company. And I think, as I can remember, I was in New York, meeting with Munro and Nicholas. It was just prior to Christmas. Or it was the Christmas season. It was winter. It was cold and dreary, and we kind of packed up our papers at the end of the day and I got on an airplane to come back to Denver disappointed. And I did not deliver the deal. They wouldn't meet our price. I was in favor of the deal. And I think a day later, Nick called me and said "OK, we'll meet your price, come on back, let's get it done." So we announced the deal as I recall in December of 1978 and with FCC filings and transfers and so on, it did not close until November of '79.

KELLER: You had some franchises that were holding out as I remember. Some little ones that didn't mean a thing after awhile.

RIFKIN: Yeah, I don't remember what held us up. Microwave licenses, we had everything. In fact we had applied for that Channel 20 here in Denver. And that was awarded. But we had a cross ownership, we had to vacate that. It was kind of normal red tape in those days.

KELLER: I can remember a little town of Blackwell, Oklahoma that never did agree to the transfer of the franchise. Just a little thing that sticks in the back of my mind.

RIFKIN: Could well be.

KELLER: Who was on your board at that time?

RIFKIN: I was the only management member of the board. We had two representatives from Narragansett. We had ......Sheplly from Time Inc. We had Gene Devalpine representative of the Memorial Drive Trust. We had Collier Crumb, a total independent. Collier assisted Dean at the Harvard Business School, who provided invaluable advice and guidance to the company along the way. But it was a relatively small board. I think that was probably it. So, if anything, the board was controlled by Narragansett. It could have been controlled by Time Inc. but the board was really good to management. They gave us the reins, and we ran it according to plan and never disappointed them. So it was a very happy exercise.

I guess I should go back, another interesting interlude. Through Bill Daniels, I met Pete Conrad, one of the original astronauts, and got to know Pete. And Pete came on our board back in 1969 or 1970. We were pursuing an acquisition of a big cable operator in Pennsylvania who was very impressed with the fact, he was an engineer by training, he was very impressed with the moon shot program, and very impressed that we had Pete Conrad on our board. So we leaned on Pete, and he arranged and got us an invitation to hold a board meeting down at Cape Canaveral just prior to the launch of Frank Borman's mission around the moon which preceded the landing on the moon. And so we took this operator from Pennsylvania and his wife down to Cape Canaveral.

KELLER: Do you remember who the operator was?

RIFKIN: Oh sure, it was Jim Palmer. We were all thrilled to stand there and feel the ground tremble as this rocket lifted off. It was quite a thing. That was the mission where Frank Borman said something of a religious nature as he circled the moon. Every prior launch had just been up and down. This one got to the moon, circled it and came back. And it was the predecessor, I think one or two flights later, was the moon landing. We never concluded the deal with that Pennsylvania operator, cause he also had a manufacturing facility, and we did not want to be in the manufacturing company. He wanted to do one deal, not two.

Pete flew the second moon landing mission, and after he flew that successfully, he started to talk to us about retiring from NASA. We started to talk to him about coming with us. He was

Tape 2/A the second man on the moon. I believe he stayed around NASA long enough that he might have even had a second...

KELLER: Skylab. He was one of the developers of Skylab and I think he flew a Skylab mission.

RIFKIN: I don't recall. But in any event, Pete retired after he had done it all. Joined us as a COO. Brought two people with us who were at the Martin Marietta company here in Denver who had worked with Pete as subcontractors on the space missions. And adjusted to the civilian life. I'm not so sure that I adjusted as well. We got along fine for awhile. Pete built a home out near mine in here in Denver. We were great buddies, but after not too terribly many months we really found we had different ideas as to how things should be done. And Pete decided to go off and get back into the aerospace business, and took a senior position with McDonnell Douglas. That was the Pete Conrad era.

Just thinking about people, I should remark about another instance. Now I think I'm back in 1970, and we're still occupying that little twelve hundred square foot office across the street from Daniels. And a fellow walked in

one day and introduced himself and said "I'm Joe Collins, and I want a job." And I said "Tell me about this." And Joe said that he was currently finishing his coursework at the Harvard Business School. He had attended Brown. And one of the things he had done, a program, in effect a thesis, was to design a market research study that dealt with cable television. So he had done that and gone out and interviewed 100 people and came back all charged up about cable television, and figured the best thing to do now was to get into the business. This was rather unique. Prior to this time, for people we looked around the industry and we stole from each other. Nobody had much of a recruitment program or training. Thought this was a wonderful opportunity to get started. Here was an extremely well educated guy. And a tough, bright, hard hitting guy who was in love with our industry before he even worked at it. Yeah, we made a deal on the spot. Joe finished his term. Went down to Orlando, Florida where we were building this system. Went down there as marketing manager, which was in effect number 2 position, and I think inside of 90 days had run the manager off and Joe was the general manager and was on a very, very fast track from there forward within our company. We moved him from there back to headquarters. He became a regional vice president as I recall. And executive VP, and on my departure, Trygve Myhren was named chairman and Joe was made president. That started our recruitment program. After that, we got proactive and we started going to business schools, the better ones in the country, and tough competing with the management consultants, the major investment banks, commercial banks and large corporations. We managed each year to try to get one or two forward thinking guys to come with us. And in that fashion we hired John Rigsby and Larry Howe and we had Dave Van Valkenburg who's been president of more cable companies than anyone, come to us. He was a Harvard MBA, but was working as a research analyst for IDS in Minneapolis and he came and offered himself to us. We hired Mike McKruden out of Washington D.C. He was working in some White House office of telecommunications as I recall. Other kind of interesting things about ATC---we outgrew that twelve hundred square foot space, and our accounting department overflowed down the street. And then we outgrew that. We found ourselves in three different locations in Cherry Creek where we decided to take a major step. We bought a piece of land at a suburban office park here in Denver and built the forty some thousand square foot building which we thought was going to be it forever. It was great. We were out in the country. There were deer out on the golf course in front of us in the mornings. No place to eat lunch, but that was OK. We outgrew that I think so rapidly, it was kind of a joke. We then built the hundred thousand square foot building and filled it up. After my departure in 1982, ATC grew even beyond that into other buildings out in South Denver.

What was memorable during the era of being a division of Time Inc. I was the CEO, and Manhattan Cable which I had shunned five years previously, was now doing quite well. Pay television helped it enormously. Thayer Bigelow was the president of it. So now we had Manhattan Cable reporting back to us again. And about that time, it crossed the hundred thousand subscriber mark which was rather momentous. And about that time, ATC was just poised to cross the one million subscriber mark. We were the first cable company to reach that level. We planned a grand celebration. I still have a 1" videotape of it. I doubt that there's a machine around that it would play on. But the Time Inc. key members of the board came out. We got some local entertainment. We had a few speeches and it was a gala evening enjoyed by the whole staff, some members of the local community, press, etc. An era of dynamic growth. Markets were building. Portland, Maine. The ones I mentioned earlier; by now we had Rochester, New York.

KELLER: You had San Diego back by this time.

RIFKIN: We just grew San Diego. We grew into unbuilt territory. But it was the Time Life nucleus system we built there. We weren't doing much in California. Some small markets near Pasadena. We did Birmingham, Alabama. You mentioned Shreveport before. By this time Orlando had become huge. Jacksonville, Florida. This phase characterized by of a couple of things: one - an intense rivalry with Warner Cable. Warner had grown through acquisition. The parent company was strongly behind it. Warner was extremely aggressive. Threw a huge amount of money at the business, and was competing with us in all the major franchises. Dallas, Texas, Houston, which they won both. Pittsburgh, we came in second. And kind of became cause celeb. Our parent company Time Inc. and Warner Communications were kind of friendly enemy competitors in the entertainment business. Strange that they later got together in a deal. But franchising really got ridiculous at that point. Each side was trying to top the offerings of the others. Things that couldn't be built economically, couldn't be delivered. Promises. Warner promising an interactive kind of system that had a name—Qube—which was utterly ridiculous.

KELLER: But by the same token ATC was hyping Orlando as a two way interactive system at that time.

RIFKIN: Yeah, but we put an experiment in, and it clearly showed that there was no economic basis for it, so we stopped. And we did not have franchise requirements. We were hyping to win franchise, but we never signed a franchise that provided for anything we couldn't do. Other than Denver, Colorado with dual cable. But that came just a bit later. So things kind of, to me weren't that much fun. We were becoming more and more a division of a large company. We were loosing our autonomy. We terminated all our banking relationships of many years standing, and basically Time Inc. the parent, became our banker. So we missed that. I guess we missed the challenges and the independence and it's not, hopefully it's atypical that the entrepreneurial juices were slowed down. Not by command, but by friction. We started spending an undue amount of time making full scale detailed presentations to lawyers of management, divisional VPs, the board of directors. It was great flying around the country in private planes, but that kind of wasn't the way. So I was starting to chafe at the bit, and yet my dream and my life was ATC and I was being treated extremely well. So it was not a decision I could hastily make. I finally reached the point where I thought it would be healthier for the company and for me if I were to resign. Which I did in late1982, I think it was. I had a brief interlude at that point forming a partnership with 20th Century Fox which had just been purchased by Marvin Davis an acquaintance of mine here in Denver, a billionaire. After six months, Hollywood and I didn't mesh, and we terminated that. I hung out the shingle we have today as Rifkin and Associates, a company I formed to basically get back into cable television operations, planning to acquire a number of systems, apply hands on management techniques, to grow them, to structure the ownership venture capital style, to be able to provide liquidity for individual deals. To have an umbrella organization, but for each investment to be a separate partnership, maximizing tax advantage and essentially having fun but still working at the industry that I knew so well. Took two people with me. Chip Morris, who was VP corporate development at ATC and my secretary and we've had a wonderful 15 years.

One other person worth mentioning, back in early ATC days, perhaps 1969 or so we lost a secretary, needed another one, and a local employment agency delivered June Travis to our doorstep. When we found that back in Ohio she had worked as secretary to the manager of a radio station, we thought she had just what we needed. We hired her and that was like launching another rocket. June was a fabulous employee. Great capacity to learn. She went to school here while working and got an executive MBA from Denver University. She grew from secretary to director of communications. Took on tasks like the preparation of our annual report to stockholders. All internal PR. Coordinating with the external PR agency. Moved from there into operations. Vice president operations, personnel management, human resources, VP administration I think at one point. From there to VP operations, from there to Executive VP, operations. And after leaving ATC about a year or two later, I was able to entice June to join me again at Rifkin and Associates as president and COO, and she put in several great years here before going to Washington to become Executive VP of the National Trade Association, where she is today.

Probably I'm forgetting at least a half dozen other very memorable people who currently can look back on great careers, and hopefully we contributed substantially to their beginnings and development.

So Rifkin and Associates 1982. Go make deals. Essentially the country is cabled. There are no new franchises to be had. So it's a matter of buying underdeveloped systems and mismanaged systems or spotting value out there, inherent value and developing it. Quickly found a deal that met that. Now I needed the capital to conclude. Called Roy Little who I probably had last had contact with in 1978 or '79 when we concluded the Time Inc. deal. Roy immediately invited me back to Rhode Island to meet with him. He jumped right on the bandwagon. Said "Let's do it again." At this point was really retired. Had his son running Narragansett Capital which was now a regulated investment company. Worked with Arthur, did a number of deals, number of acquisitions together and renewed that relationship, which has proven very fine for both of us. We grew Rifkin and Associates kind of slowly, in kind of a controlled fashion. Started to need some people, so we looked back to ATC and hired Pete Smith who had built Albany, New York and Portland, Maine. Made him our chief engineer. Hired Paul Bamby who joined us as a VP marketing and then moved into general operations, hired Roger Leonard who had been in charge of internal audit. Essentially tried to emulate the Daniels pattern of making everybody a partner. Strong incentive program. Ownership so that we're all pulling in the same direction. And as we have periodically had deals mature and sell, the benefits have been awarded to all of the officers here. I guess we got as high as 400 and some thousand subscribers, sold off down to three hundred thousand. We're currently back to 350,000 and growing. Probably two further items to mention. Cable industry hit bad times in 1989. Nineteen eighty nine things peaked. And hysteria was in the marketplace and prices were running wild. And we decided to pull our horns in at that point. We proved correct. There was a credit crunch almost immediately thereafter. Highly leveraged transactions were frowned upon. Bank financing dried up. For the first time in its history the cable industry had several deals go bad with actual defaults and money lost. To make matters worse, in 1992 our friendly government reimposed rate regulation on the industry, an absolute crushing blow. It froze the industry in place or set it back probably for at least two years before the politicians recognized the error of their ways. And we just rode out that storm. Nobody lost anything. And started getting modestly aggressive in 1995 to the present time where we're continuing to gear up for further growth. And one of our areas of growth is a little different. We recognized the maturity of the industry in the US, and looked around the world and saw opportunities. So together with the major money management group in New York, we have formed a company called Intercom Holdings Inc. and its charter is to develop telecommunications operations wherever in the world the right mix is found. We currently are building broadband cable systems in the south of France and in the suburbs of Paris. We have recently acquired cable systems on the island of Trinidad and have consolidated them into a 50,000 subscriber operation. And we have various other acquisitions as well as developmental deals in the works. So it's great fun. It's an opportunity to kind of do it all over again albeit the difficulties of language and travel really are putting younger people than I on the firing line. I'm sort of sitting back and reviewing and playing.

KELLER: How long do you feel you're going to continue to do this?

RIFKIN: As long as I can walk in and out of this office, Jim.

KELLER: You've done it now twice and yet you still look forward to doing some more.

RIFKIN: It's great fun. It's been a great challenge. The people...and this little session has caused me to reflect and remember people. It's all with great fondness and love and admiration and respect. Even people we competed with and fought with, they're all great in their own ways. Having been part of a team of pioneers and entrepreneurs who thrust aside every obstacle and prevailed and prospered, it's a mind boggling experience to be able to look back and say "Gee, I was there. I was a part of it." I'm proud to have been a part of it, and my family and my heirs are enjoying it and will continue to enjoy it as well.

KELLER: But have any of your sons come into the business as professionals?

RIFKIN: Yeah. I never believed in nepotism, but my oldest son is a partner in a national law firm based which has an office here in Denver, and he does a good deal of our legal work. My second son is VP operations here, and he recently had triplets so it's a little hard to expect 70 hour weeks out of him. But making up for that is my son-in-law who is the president and chief operating officer. I recently relinquished the office of chief executive to Kevin Allen who I brought here from New York two years ago. So Kevin is the vice chairman and CEO and Jeff Bennis, my son in law is the president and COO. So I think it's a great team. They are all essentially 40 years of age or less and aggressive, young, talented, hungry tigers.

KELLER: You've always had those though.

RIFKIN: Yeah, I guess if there's a reputation I've had in the industry that I don't think is warranted and I don't enjoy hearing it is that of running a lean and mean operation. True, I think we have always run a tight and effective operation. I don't know about the meanness though.

KELLER: Well, I think that just goes along with it. If you will reflect back on the very early days of ATC, when every purchase order, whether it be for a nickel or a hundred dollars was signed by the chairman, and every check that was put out at that time was put out by the chairman. I think that's where that reputation of yours started to build.

RIFKIN: It's probably all we had.

KELLER: And to hear you say we can carry the suppliers for 90 days or something before we have to put out the screws. I don't think that's a criticism at all. A lot of people learned from you. I'm about ready to wrap it up, unless you can think of anything else you want to put in. Thanks again, Monty. Really appreciate this opportunity.

RIFKIN: It was fun.

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Jay Ricks

Jay Ricks

Interview Date: Thursday August 13, 1987
Interview Location: Washington, DC
Interviewer: Max Paglin
Collection: Penn State Collection
Note: Audio Only

PAGLIN: Good morning, I'm in the offices of Jay Ricks at Hogan and Hartson law firm in Washington, D.C. and this is August 13, 1987 and we're doing an oral history of the cable television pioneers. The interview today will be conducted with Jay E. Ricks, who is a partner in the law firm of Hogan and Hartson. I am Max D. Paglin, and I am the Executive Director of the Golden Jubilee Commission on Telecommunications. This oral history of cable television pioneers project is being conducted also in conjunction with Penn State and the Cable Television Pioneers National Cable Television Museum. This is our first interview, and Jay, you will recall the materials that I sent you giving a background of the project itself and the outline of what I thought we would be able to discuss. So if it's alright with you this morning, what I'd like to do is go through your early personal history, you know, your place of birth, when you were born, your parents, your family, your youth, and the location of where you lived, your education, law school, your early adulthood and military service and anything of this type. Why don't we just start, start telling me where and when you were born, and something about your family and then I think I'll guide you along.

RICKS: Well, Max, my family had its roots in Washington, D.C., which is a little unusual for most people that you know who live in the city, typically come from someplace else. I was born in Washington in 1932, my mother and father lived in northeast Washington at the time, my dad at that time was in the Marine Corps, this was during the Depression. He was a flyer and had an ambition to be in aviation all of his life. Shortly after I was born he became an airline pilot, we moved around a good deal as he worked his way up through the airline, but we came back to the Washington area in 1941, then living in Arlington County, Virginia.

I attended the public school system in Arlington, and was involved in sports and other activities in Washington Lee High School in Arlington, Virginia. It was then the only high school in northern Virginia other than George Washington in Alexandria. They were the two principal high schools and had quite a rivalry.

PAGLIN: I remember we lived in Arlington in 1943, our first apartment was in Arlington in 1943.

RICKS: Well, it's a nice community. Then I attended the University of Maryland out in College Park, and pursued a business curriculum out there, graduated with a BS in Business Administration in February 1956. I was commissioned in the Air Force at that time, but my commission in the Air Force did not take effect until June of 1956 so I went to work in the interim for the C & P telephone company in Maryland in their management program and worked there for six months until I was duty stationed, duty time. Got married in June of 1956.

PAGLIN: Wait a minute, let me interrupt you. You say you got your commission, did you seek a commission in the Air Force?

RICKS: I was in ROTC in college. During that period Max, it was during the Korean War, unless you were in an ROTC program you were likely to get drafted out of college. It was the only way to finish college, and I was kind of half‑way thinking about an Air Force career at the time anyway.

PAGLIN: To follow your father's footsteps.

RICKS: Yes, as my brother had in the Navy, he became a Navy pilot.

PAGLIN: Did this depend upon funding scholarship and the like?

RICKS: No. You got a commission upon completion of your college, plus your courses you took in ROTC plus summer camp.

PAGLIN: Back up one second if I may and I'll just be filling in. You mentioned sports, you know, what kind of sports, was that scholarships, was that letters?

RICKS: I played football at Washington Lee and lettered there I think 3 years and I also was in track. I was a shot putter in track and field events, and won the Virginia State Championship in 1951.

PAGLIN: In shot put?

RICKS: Yes.

PAGLIN: What weight?

RICKS: 12 lb. shot put.

PAGLIN: The reason I ask is that I'm an old track man myself, except I was 60 yard dash; that was the limit of mine. So, you were the Virginia State Champion?

RICKS: That's correct.

PAGLIN: Did you continue it in college?

RICKS: I threw the javelin in college. I wasn't heavy enough to throw the 16 lb. shot, so I....

PAGLIN: Is that college level?

RICKS: Yes. So I switched to javelin, and participated. Maryland was then in the Southern Conference rather than as it is now, the Atlantic Coast Conference. It was then the Southern Conference and I participated in a number of meets for Maryland, and lettered in track.

PAGLIN: You got your letter at Maryland.

RICKS: Yes.

PAGLIN: So now, coming back again, so you worked those six months for C & P in the management phase in June of 52?

RICKS: No, up until June of 56.

PAGLIN: June of 56, excuse me, and then you went into the Air Force.

RICKS: Then I got married down in Berlin, Maryland immediately before the Air Force. My wife Debbie's family is from Berlin, and we were married...

PAGLIN: What was her maiden name?

RICKS: Savage.

PAGLIN: Berlin, Maryland?

RICKS: Berlin, Maryland.

PAGLIN: Where did you meet her?

RICKS: At Washington Lee High School, earlier she lived in Arlington as well.

PAGLIN: So this was the high school sweetheart?

RICKS: This was the high school sweetheart.

PAGLIN: Typical American, the style. So you married before you went into the service?

RICKS: Yes, and we were married in Berlin on June 4, 1956, and our honeymoon was driving to Lackland Air Force Base from Berlin. Lackland, San Antonio, Texas, and that is pre‑flight. I showed up pre‑flight toward the end of June, I think it was around the 20th or so of June '56, and began the pre‑flight course there. During an exercise with an obstacle course, I badly dislocated my shoulder, and it was so torn up I got washed out of flight school on medical, but I was able to continue to serve in the Air Force and was thereafter assigned to intercept control school at Tindle Air Force Base in Panama City, Florida. At Tindle Air Force Base I was assigned to Japan and I served....

PAGLIN: Before you get up to that Jay, let me back up a little bit. Pre‑flight being what, just physical type exercises, basic training, what?

RICKS: Well you went to some ground school, it was a lot of physical activities, there were a lot of physical examinations, plus we had some ground school, and really preparing you to be an officer as much as anything else.

PAGLIN: So it didn't have to with an accident in flight or anything.

RICKS: No, I was doing an obstacle course, and hand over hand on a tower, and my shoulder gave way and I fell 15 feet or so, and landed on it again, and it was pretty well torn up, and they didn't feel that it would ever be tight enough again and to avoid having it happen in a flight situation, so they disqualified me from flight...

PAGLIN: This was when, the same year?

RICKS: This was in probably July of 1956.

PAGLIN: So it was shortly after you arrived there?

RICKS: Oh yes, it was shortly after I arrived there.

PAGLIN: So they put you on ground then...

RICKS: To radar control school, and completed radar control school, got an assignment to Japan, and arrived in Japan in December of 1956, and was assigned to a remote Air Force base, and had a rather interesting experience there. The Air Force base was located on the west side of the main island of Japan, Honshu, and the headquarters was located at Niigata Japan, which was an alternative site for the atom bomb, in the event that the weather had been bad at Hiroshima. So the people there had a rather peculiar attitude toward Americans, knowing that they had been an alternative site for the atomic bomb.

PAGLIN: How did they find out, was that it just became public information...

RICKS: Yes, it became public knowledge, and then I was assigned to...

PAGLIN: How long were you there?

RICKS: Well I was there for a relatively short period of time because then I was assigned to a base in a place called Komatsu, Japan, which was a lovely area down in what they called the "hot spring" portion of Japan. It had been an old Japanese training base, and when I arrived, there was only one other officer at the base, and he was the base commander, and the day after I arrived he rotated back to the United States and I found myself in charge as the second lieutenant.

PAGLIN: I was going to say, what was your rank at the time?

RICKS: I was a second lieutenant with about 6 months of experience, and I found myself base commander.

PAGLIN: And what was the size of the base personnel?

RICKS: Well we had 65 U.S. personnel and about 65 Japanese Defense Force.

PAGLIN: Oh, they had Japanese on the base?

RICKS: Yes.

PAGLIN: Civilians?

RICKS: Yes, they were civilians assisting in the logistics of the base. It was an early warning radar base and so that was quite an experience, and since there was housing available, I was able to have Debbie join me and we had a very pleasant experience.

PAGLIN: And that was about also '56?

RICKS: That was now in '57. I came back in 1958 from Japan and was assigned to a little radar base up in Williams Bay, Wisconsin, which was another lovely spot, north of Milwaukee, and I was there for the remainder of my Air Force career which ended in 1959, and I had then applied to several law schools and elected to go to Georgetown.

PAGLIN: What rank were you at the end of your career?

RICKS: First lieutenant. Well, at the end of my career I was a captain, but during my active duty I was a first lieutenant.

PAGLIN: I see. So in other words, this period, 1959, you were a first lieutenant.

RICKS: Then we came back to the Washington area, and I enrolled at Georgetown University law center, and during my stay, we were living again in Arlington County, Debbie was working at the Pentagon to support us. After completion of my second year, I worked as a summer clerk at Hogan and Hartson...

PAGLIN: Oh, so your association with Hogan and Hartson began in law school?

RICKS: Yes.

PAGLIN: And that was what year would you say?

RICKS: That would have been 1961, I guess.

PAGLIN: 61. Started with Hogan and Hartson. What area were you working in as a clerk?

RICKS: Principally litigation, and I like litigation and I decided that that was the area that I would probably specialize in, and I was working on some interesting cases that a summer clerk can look forward to, doing that kind of work again. After graduation...

PAGLIN: Who were you working with at the time?

RICKS: Well I worked for Jack Arness, who is still a senior partner here at the firm. I worked for Paul Connolly, who later left the firm to join Ed Williams' firm, which is now Lane, Williams and Connolly. He died about five years ago.

PAGLIN: Did you run into...1961, Ed Holtz was there, wasn't he?

RICKS: Ed Holtz was here, Duke Patrick, Lester Cohen, Howard Roycroft.

PAGLIN: Is Duke Patrick still here? I know Lester was, but...

RICKS: Oh yes, Duke had been a senior lawyer in communications and he had been the former general counsel of the radio commission.

PAGLIN: Right, I remember well and he was also counsel for United Paramount Theaters in the Paramount merger case which Fred Ford and I had a principal hand in and I that's where I guess I first saw Duke. In fact, later on when I became chief of litigation at F.C.C., I think I argued a case or two against him in the court of appeals.

RICKS: Well the firm's communications practice was one of the earliest in Washington. Frank Hogan of course, started practicing right around the turn of the century.

PAGLIN: I didn't know him. Duke Patrick was the first of the old school that I knew of.

RICKS: And Frank Hogan was the great trial lawyer of his day, and then after developing a very successful litigation practice, he decided to bring in some people who had administrative expertise. He brought in Patrick and Duke Ider, and they started a radio communications practice. We were the first of its type, and by the time I joined the firm as an associate in 1962, the firm had the traditional Washington practice plus a communications group of about 5, 6 lawyers, and they were doing the traditional radio and television licensing enforcement‑type work...

PAGLIN: By that time Ed Holtz was already...I think Ed came over about 60.

RICKS: Ed joined some of the ex parte case, he then joined us after the death of a partner here by the name of Parker Hancock.

PAGLIN: Oh, I knew Parker Hancock when he was with the Commission (FCC).

RICKS: Ed came in more or less to take his place.

PAGLIN: Right, he was a very close friend of Fred Ford.

RICKS: Right, and when I joined the firm I was particularly interested in litigation and began to work in litigation practice. But the communications group had several appellate cases that they needed the briefs to be written and so I was assigned to write a couple of briefs, and it gave me kind of a qualification that was attractive to the communications group so they broke me in. I wasn't particularly happy about it, but I was a good scout.

PAGLIN: But you didn't know then what you know now, right?

RICKS: That's right, they said they wanted me and I said okay.

PAGLIN: What were some of the early cases that you helped write briefs on?

RICKS: Well, two I remember, one involved an interference with the New York Times station in New York.

PAGLIN: That was WQXR.

RICKS: Well, it could have been, it was one of the offshoots of that. This one the artline [???] was Gross Co, and it was a licensing of the radio station in New England which allegedly interfered with the "unprotected" service contour of the music station.

PAGLIN: Yeah, that was WQXR, the New York Times station.

RICKS: QXR, and so I worked on that brief in which we represented the licensing of the other station, and another one I worked on was one of the stations growing out of the ex parte matters, Biscayne Television which had gotten Channel 7.

PAGLIN: I know that very well, and I'd tried the case at the Commission and then also had the questionable pleasure of ??? by that time I was chief of litigation, and I had argued those cases in the Court of Appeals.

RICKS: Those are the two I remembered most vividly working on and, at the same time, as I said I was working on litigation as well which I enjoyed, and I continued to try and keep a hand in both camps. The communications practice as I said, was principally representing existing radio and television stations in licensing and that sort of thing and I did not find that to be as exciting work as some of the litigation opportunities.

Then around 1963 or 64, I got introduced to some of the cable television legal work. I cannot remember the first cases that were involved but I would imagine that the outgrowth was an existing client getting interested in getting a cable franchise in their own service area. The history of most of the broadcasters of that day, or many of them, many of our clients, they started out as newspaper companies, saw radio coming along and they were fearful that it was going to be an economic threat to their newspapers, so they obtained an AM radio license. Then they saw FM coming along, and were fearful that that would replace AM so they got the FM license. Then along came television and they were convinced that that would become a means for distributing newspapers so they all got television licenses, and then when cable came along they figured that was going to wipe out television so they'd better get the cable franchises. So I was the new boy on the block to find out what this new technology was all about, and that's how I first got into it.

PAGLIN: And that was in the early 60's.

RICKS: That was 1963, I believe.

PAGLIN: Who were some of the clients that were represented at the time?

RICKS: Well, the ones that got into cable very early were Heron Communications out in Utica, New York. The owner Gordon Gray was the CEO of Heron, and he was a visionary and saw that cable was going to be a very good business without regard to what it did to your existing stations. The Steinman stations in Lancaster, Claire and McCollough were interested. AVCO had some interest in looking at cable and did some joint ventures in it and did a little work there. Then in 1964, I believe it was, Jack Kent Cooke approached the firm. He had had an unhappy experience with a radio revocation case on the West Coast in the Los Angeles area, and decided that he would go into cable television.

PAGLIN: Can we back up a little bit?

RICKS: Sure.

PAGLIN: In the early days, did you deal directly with people like Gordon Gray, and Claire McCollough?

RICKS: Oh yeah, sure.

PAGLIN: Tell me a little about your interaction with them in terms of their, of course as a lawyer, but your recollection of what their attitudes, interests, observations, foresight in terms of the future of cable, because uniquely, they were not the Mom and Pop operators that started out say in Kalispell, Montana. They were the established broadcasters, and yet, as you say, you begin to indicate that they had a vision that this was another one of the upcoming facets of the whole communications complex. Tell me a little about, say start with was Gordon Gray, one of the early ones?

RICKS: Gordon Gray was one of the early ones and because the station was located in Utica, New York, in an area that was relatively underserved by off‑air TV broadcasting, particularly because of the mountainous terrain. He began to see pockets of people in the outer fringes of the coverage area of WKTV up there and became interested in it, principally as what effect did it have on his broadcast station, physically could it be something that is likely to have some kind of economic impact. Then, I think, he began to appreciate that it was simply, a good business, and while it may or may not have an economic impact on the existing station, it certainly was a business that on its own, would be attractive from an investing point of view. So we chatted about it, and chatted about the how do you get into the business, what is it the city gives you and why do you go to the city and what do you get from them.

PAGLIN: This was the early 60's, 63?

RICKS: Yes, 63, 64.

PAGLIN: I want to just interrupt without losing your train of thought. Would it be fair to say that as far as Gordon Gray was concerned, either initially or as he began to learn that his attitude was a little different than what has been recorded as the usual attitude of the broadcasters to CATV and that is you know, they're a dead threat to me and I've got to get rid of these guys no matter what, [???] that was not his attitude.

RICKS: Well the broadcast attitude toward cable was very ambivalent. I think that as in any new technology that could supplant your principal service or could at least have an adverse impact on it, it was one of what you might call "antagonism", and the antagonism was reflected in several ways. One was as happened with Gordon Gray, get into the business and that way as they had previously as many newspaper companies had gotten in, used the same strategy that has proven highly successful in the past.

PAGLIN: If you can't fight em', join em'.

RICKS: Exactly. But a number of broadcasters, and particularly those that were members of the Association of Maximum Telecasters, AMST...

PAGLIN: AMST, yeah, right.

RICKS: AMST, took a very, very bitterly antagonistic view of "let's kill this new technology in the cradle." And of course it created problems for law firms who were representing the broadcasters, because you might have one client who'd decided to get into the business and one client who'd decided to kill it forever.

PAGLIN: That do create a problem, huh?

RICKS: So it was a continuing problem. The clients followed what they thought was a good and sufficient strategy for their own interests, but they frequently brought problems to lawyers. So in many instances we had clients for many years who we could no longer represent, so it was a kind of sad situation. So in any event...

PAGLIN: Did you have to tell them that "we've got a conflict and we'll have to send you somewhere else?"

RICKS: Oh sure, sure, on many occasions.

PAGLIN: Was that extensive?

RICKS: Oh yes, very extensive.

PAGLIN: Probably lost some good clients that way.

RICKS: Certainly did.

PAGLIN: So what you're telling me, Jay, is that in those instances where somebody like Gordon Gray, decided that if the Commission would permit, and at that time they did, for them to get into cable and in a different area...

RICKS: No, that would be in their own area.

PAGLIN: In their own area, but not in the same city.

RICKS: Yes they could.

PAGLIN: They did? In those days?

RICKS: Yes, absolutely, that regulation didn't come in until 68 or 69.

PAGLIN: That's true, you're right, I kind of forgot, it was a long time ago. So they got into their own areas.

RICKS: They were perfectly free to get into their own areas.

PAGLIN: So the attitude of the firm was that you would help those clients that wanted to get into cable and still continue their broadcast operation.

RICKS: Yes.

PAGLIN: And as far as the times when there was a conflict, and how would that conflict arise then?

RICKS: Well, it might well be that one client would seek to get a cable system in another client's area, and another client would wish to resist him, and so then you had to battle it out on both sides. Our early cable practice, the first couple of instances where existing clients who were getting into the business and were getting into it in a defensive way, they were only interested in it in their own service area.

Then with our new representation of Jack Kent Cooke, we were representing someone who was getting into cable because he thought it was a good business. Cooke had an unhappy experience with the FCC and a radio station which he had funded, was owned by his brother, had its license revoked. So, after casting about a bit, he decided that cable television looked like a good business, and I began representing him, going around the country buying cable systems.

PAGLIN: You were working directly with him, in the early sixties and actually going around and helping him, advising him in purchasing cable systems.

RICKS: Yes. Well he was working with a broker...

PAGLIN: Who was that?

RICKS: He was working with Monty Rifkin who was then a broker for Bill Daniels, and Jack had a high regard for Monty Rifkin.

PAGLIN: That's right.

RICKS: And Monty would then present to Jack the financial projection of the potential cable purchase and Jack thought it was a good opportunity and he would execute a letter of intent. Sometimes it was no more than two or three lines on a yellow sheet with the owner, and then I would go out and try to close the deal.

PAGLIN: These were existing systems?

RICKS: Yes, and these included Morgantown, West Virginia, Fairmont, West Virginia, Clarksburg, West Virginia, systems that were being acquired at that time were about seven times cash flow and translating about $300.00 per subscriber. I never will forget one instance when these were fairly...

PAGLIN: Small systems...

RICKS: No they were big systems; these were fairly large systems, yeah, these were some of the larger existing systems around.

PAGLIN: Yeah, well Morgantown...you were saying you could remember what?

RICKS: That the purchases were well publicized and the prices that Jack was paying were well publicized, and Ken Cox, then an FCC commissioner, told a reporter that Cooke would go broke because he was paying too much for cable television systems. I don't know why Ken thought he was particularly qualified to make that judgment but it apparently did not dissuade him from making it. As Cooke put together a large company, I became really heavily involved with the day to day legal problems. This was really the first experience with dealing with every facet of cable, from the dealings with the cities, dealing with acquisitions and sales.

PAGLIN: So you were saying, as the time went on, you became more heavily involved in the day to day problems of the running of this corporation. Now did you at any time become Jack Kent Cooke's personal counsel, or was it just for these purposes?

RICKS: No, although I have remained very close to Jack through the years, and have continued to counsel him on a number of areas, but it's been principally in the communications area.

PAGLIN: Now, were there occasions when Cooke was interested in going for a franchise or was it mostly existing systems that he was after?

RICKS: Almost all were existing systems that he acquired.

PAGLIN: And tell me a little more about, we're talking about the early days here, in a sense this is what this project is about, without impinging upon confidentiality of attorney client relations. Again, we're trying to draw a picture here of how it was with these early systems and how they got developed and so on. What were the nature of some of the problems that you would find, as a lawyer?

RICKS: The principal problems were the inability of cable systems to give enough service to the public under FCC regulations. The FCC regulations were restrictive as to the introduction of new distant signals, and also severe restrictions on the carriage of signals that duplicated programming of a closer television station. These regulations were so pervasive that they dominated the operation of the cable system and this period during the middle 60's, late 60's...

PAGLIN: This was the time of the FCC's Second Report and Order.

RICKS: Yes, so most of the legal work that was done was trying to accommodate to FCC regulations and trying to find some way to change it, either through litigation or regulation, or through rule making. So that was a big area, but then of course, just getting authorizations for the microwave facilities, one might be in order to introduce new services, dealing with some of the common carriers that were bringing in the distant signals, and transaction work in the sale of systems.

If you were looking at the development of cable television, the first big inhibiting circumstance on the economics of cable after the truly‑Clask??? markets were built and were observed was FCC regulation, that was the big problem in the late 60's. That's where most of the Washington lawyering occurred.

PAGLIN: Did you get involved in the early litigation in some instances? I'm thinking, of course, of Midwest Video and before, Black Hills in Helena, Montana. What were [???] besides your work on the acquisition of systems with Jack Kent Cooke, did you get involved on the federal level in terms of appearances before the FCC in those early days or litigation. I don't know if any appellant litigation was going on at the time before Midwest Video, and if so, what was the nature of it?

RICKS: One of the principal concerns of the industry in addition to the FCC was in the area of telephone relations. The telephone companies in the late 60's were beginning to make aggressive moves against the cable industry. United Telephone and General Telephone had elected to enter the business through affiliates. The Bell System companies, while unable to enter the business because of the 1956 anti‑trust consent agreement, were exacting larger and larger pieces of the action through their pole attachment premise.

We got very active in that area of the practice and brought what I believe was one of the first and most significant cases that demonstrated the danger to a independent industry of the telephone involvement. That one was a case called Telecable vs. General Telephone in Bloomington, Illinois. I forget the actual date but I think it was in the late 60's. The case demonstrated that there was an inevitable incentive of a local telephone company to conduct itself in such a way as to favor its sister corporation in the franchising and selection of a cable television company. The FCC, after the evidentiary hearing in that case...

PAGLIN: This is before the FCC...

RICKS: Yes, the FCC issued a cease and desist order against General Telephone, requiring it to, in effect, cease and desist with the operation of that system, the consequence of which was that it sold the system to Telecable at cost.

PAGLIN: Who was Telecable?

RICKS: Landmark Communications.

PAGLIN: So the phone company sold the system back to Landmark?

RICKS: Yes, and out of the decision came an understanding or a realization with the FCC of the inherent dangers of the telephone company being in cable operations within its own service area. Shortly after that case was decided, the FCC adopted rules of general application, including prohibiting telephone companies from being in the cable television business.

PAGLIN: This was through a rule making?

RICKS: Yes, but the rule making was really an outgrowth of the Bloomington case and other cases like it. We were very much involved in those activities. We also had a case challenging FCC regulation of cable which we brought in the third circuit on behalf of Telesystems Corporation. That case was being coordinated with NCTA, the National Cable Television Association, in other challenges including the Midwest Video for the Supreme Court. I can't remember whether the case was actually argued to the court or not. My recollection is that the case was dismissed because of the fear that we would have a decision that was not as favorable as we hoped to get out of the Supreme Court in the Midwest Video case. It wasn't Midwest Video, it was Southwestern Cable.

PAGLIN: Oh this was the Southwestern case, before Midwest Video came up.

RICKS: This was the case that was challenging the FCC's jurisdiction to regulate cable as ancillary to broadcasting. So the argument that was being made to the court by us and by Southwestern Cable was that the Communications Act did not confer jurisdiction on the FCC to regulate cable as it was seeking to do; it's simply ancillary to broadcasting. Of course, as history proved, the Supreme Court confirmed the FCC's jurisdiction under the ancillary to broadcasting concept.

Our practice continued to grow in the cable area; we were representing a number of companies that were engaged principally in cable television as well as a number of companies that I described in the beginning who came into it principally for defensive reasons. Some of the more significant events that I can remember, and I'm sure I'll forget most, but some of them I can remember. We represented the entire industry in an effort to try to get the FCC to assert jurisdiction over the regulation of utility companies probation [???] of pole attachments. This was a very very important economic factor for the industry because the utilities were exacting a monopolistic profit, according to our view, and it was an ever increasing amount of money that was being charged and it was creating a severe threat to the profits of the industry.

After a lengthy rule making investigation, the FCC around 1973, declined to assert jurisdiction and then we turned to Congress and drafted a bill for Congress' consideration. That bill was introduced by Lionel Van Deerlin, the chairman of the House of Communications Sub‑committee...

PAGLIN: From San Diego.

RICKS: From San Diego, and it was adopted by the Congress and signed by the president.

PAGLIN: There was an amendment to the Act...

RICKS: There was an amendment to the Communications Act directing the FCC to regulate it.

PAGLIN: And that was Title II, wasn't it?

RICKS: It was under common carriers.

PAGLIN: Yeah, Title II.

RICKS: Interestingly, the law was upheld in a case which we handled before the D.C. Circuit called Monongahela Power vs. the FCC. The FCC began routinely to regulate pole attachment rates. Many of our clients received many many millions of dollars back in refunds. One interesting story, that I get a kick out of, is that we had a case for the West Virginia Cable Association???, if only Bill Turner, who was one of the cable pioneers who was president of that association...

PAGLIN: You said a case before them?

RICKS: Yes, we had a case before it on behalf of the West Virginia cable operators against the power company serving West Virginia, a very very large utility. We won rebates in the case and the West Virginia cable operators, most of whom were entitled to rebates, received checks from the power company which made them very happy. Bill Turner did not, and so I called the utility company lawyer to ask them why Bill Turner of Welch, West Virginia, had not gotten a rebate check. They checked their records and called back and said that was because Bill had refused to pay any rates at all for several years. I called Bill and told him that you only get a rebate if you've paid. In any event...

PAGLIN: And what jurisdiction was that, a local, West Virginia court?

RICKS: That was, again, before the FCC. But interestingly, in recent history, the U.S. Court of Appeals for their own West Virginia circuit declared that the bill that we'd written back in 1976 would constitute an unconstitutional taking under the Fifth Amendment and that was the case of Florida Power Company vs. the FCC. We were rather shocked by that decision because it seemed to us that the regulations were similar to other efforts of government to subject monopolies to utility‑type regulation, but then we had the case declaring our bill unconstitutional.

PAGLIN: And you'd participated in the Florida case?

RICKS: The firm had, yes, I had not personally.

PAGLIN: No, I mean as Amicus or what, who represented...

RICKS: No, we represented the party in interest group, W Cable, was the real party in interest, that was our client. We were retained to bring the case to the Supreme Court and, as history will record, the Supreme Court's last session determined that the law was unconstitutional and would not involve unlawful taking. We're back where we started, we've got our bill intact and all is right for the world. Other significant...

PAGLIN: Let me go back, can we go back a minute?

RICKS: Sure.

PAGLIN: In the telco power line... in the pole attachment situations, was there also litigation against some of the principals like GTE and AT&T, did you also have to litigate against them in these circumstances?

RICKS: In the pole attachment area, the telephone companies bitterly resisted either FCC jurisdiction or legislation giving the FCC jurisdiction to regulate. Once the legislation passed, they did not appeal it, as did the electric utilities. They did not seek to argue that the law was either unconstitutional or in some way beyond the FCC's authority, but they did resist the regulation by the FCC in a number of cases and I suspect that we handled more of those cases than perhaps anyone else and I think it goes for our experience in the field. We had cases with United, General, AT&T, all the Bell System companies over the years, and it continued to happen.

I had mentioned earlier that the earliest threat to cable was FCC regulation which inhibited the number of signals that you could carry. The subsequent threat was from the utility companies in their ability to exact a monopolistic profit produced by the poles, the conduits, and that was largely dealt with by the passage of the bill, the Pole Attachment Act. The FCC's concerns about signal carriage and impact on broadcasters was largely dealt with in the 1972 Report and Order which allowed some distant signal introduction bought with the understanding of the industry in a consensus agreement that there would be copyright revisions. So the next kind of big phase in the cable legal development was the imposition of copyright legislation in 1976.

The next big concern of the industry was really with the cities. The cities of this time were franchising; The frenzy was in full gear, and cable systems were promising exaggerated commitments, and the cities were exacting whatever they could get in that very game, and then many many cable operators found themselves in distress over the obligations that they had made it into.

PAGLIN: I want to develop that in a separate section. Can I back up again a little bit?

RICKS: Sure, sure.

PAGLIN: In terms of the early clients, I take it that you had met at the time, again, this being cable television pioneers, you mentioned Monroe Rifkin. Who were some of the other cable pioneers with whom you dealt and what were some of your impressions of them? For example, you met I guess, Bill Daniels...

RICKS: Yes, I never represented Bill, but I met Bill at the 1964 convention, I think it was 64, at the Bellevue Stratford Hotel in Philadelphia, Bill took the entire convention out to dinner or something but other than meeting him in both that social context and the fact that his company was the broker for many of the deals that we accomplished. I didn't have an opportunity to work with Bill, but people that I did work with as clients that were some pioneers included Fred Liebermann with his partnership with Jack Crosby in what was then called Telesystems Corporation. They had a unique relationship, Fred operating out of Philadelphia, Jack out of Boston...

PAGLIN: This was Jack Crosby, right?

RICKS: Jack Crosby. Most of their deals were done with a handshake or simply orally over the telephone. They were different as two people could be and yet were a very successful and compatible partnership. That was quite interesting dealing with them because they recognized at one of the earliest stages in the game that the way to make money in cable was to acquire asset value in a group of systems, sell them, and then do the same thing again. They acquired the systems that were put into a company called Telesystems and then those systems that were fully depreciated they put into another company, and then had started another company. Telesystems was sold ultimately to Cox Cablevision, and became part of the Cox cable family of systems. Then they started C.P.I., Microwave, Communications Property Inc., in which they assembled a significant number of systems and they sold that to the Times Mirror Company. Those, incidentally, are the original systems of the Times Mirror. By this time, they had a young executive by the name of Bob Hughes who was operating Communications Property Inc. and when that was sold, Bob Hughes became both the CEO and a major stockholder of Prime Cable. By this time, Fred Lieberman was no longer active in the company that Jack Crosby remained as director and a stockholder. Prime has continued in the business up to the present day and is a very successful company in acquiring, selling. I mentioned earlier about Jack Cook. He's one of the early ones in the business. Jack started American Cable‑vision which had over 100,000 subscribers which was a big company in those days.

PAGLIN: That was around 196...

RICKS: In the late 60's. He started in '64. In '68 he had a large company. That was merged into H & B American.

PAGLIN: I remember that.

RICKS: H & B was merged into TelePrompTer, a part of that transaction, Irving Kahn obtained from Jack Cooke, a voting trust agreement, giving Kahn a right to vote, which Cooke stopped. Cooke had more stock in TelePrompTer than did Irving. A similar agreement had been obtained by Irving Kahn from Hughes Aircraft which owned cable systems. Irving Kahn had a voting trust to vote the Hughes stock as well. At that point, Cooke was no longer active in the management of the company and I was now no longer his lawyer. Other people, and I'll come back to the rest of the story, that we were working with in those days were Al Stern, who had started a company called T.V.C., Televisions Communications Inc.

PAGLIN: Out of Philadelphia?

RICKS: No, New York. Al Stern came from a very wealthy family. A family I believe that had its roots in Sears Roebuck and many other things as well. T.V.C. was acquired by Warner and became the basis of Warner Communications.

PAGLIN: Did Al still stay with them?

RICKS: Al stayed with them for a short period of time and was replaced by Gus Hauser. Interestingly, and this is a bit of irony, Al had been a visionary of cable, recognizing that cable could develop in major urban areas. Al undertook to obtain a franchise in Akron, Ohio which at that time was probably the largest community and the most urbanized community to obtain a franchise and the community with the most off‑the‑air television reception of anyone that really sought to develop cable systems.

PAGLIN: They'd be picking up Cleveland.

RICKS: Off the air service. Al built the very modern so-called state-of-the-art cable system in Akron, Ohio. It was losing a lot of money. As many urban systems continue in some instances to lose money. But the powers that be in Warner were concerned about the money that was being lost in the cable division, and principally Akron. So they brought in Gus Hauser as a pragmatic executive who had experience in utility, to stem the losses of this type of operation to get them back into the more traditional cable operation. Of course, later in his career, Gus experienced exactly the same circumstance when he got Warner involved in QUBE technology.

PAGLIN: Where was this again, the first QUBE system was where?

RICKS: Columbus, Ohio. I'm just trying to think of the other people who went back. I think those were the principals, Al Stern, Jack Crosby, Fred Lieberman, and of course Cooke. We had dealings with a lot of people such as Monty Rifkin, Alan Harmon, who were brokers, with Bill Daniels. Those were the people we were dealing with.

PAGLIN: By this time, Cooke's systems were worth well up into the millions.

RICKS: Yes, and as I say he had not sold them. He had converted them into stock and even stock in TelePrompTer. Then came the Johnstown incident in which Irving Kahn was convicted of having bribed council members in Johnstown, Pennsylvania in order to obtain a renewal of the franchise on the TelePrompTer system there. Irving Kahn's defense was that he was extorted by the council members that unless he paid them cash they would give the franchise to someone else. One of the early incidents that gave rise to the Cable Policy Act of '84, Kahn was under indictment and Cooke was appalled that this had happened to a company in which he was a stockholder. So he and Hughes sought to break the voting trust agreements with Kahn. The New York court had that under advisement when Kahn capitulated and gave up control of the company to Cooke.

End of Tape 1, Side A

RICKS: I was neither representing Cooke nor TelePrompTer. The reason we were not representing Cooke in that situation was because we also represented Howard Hughes. We didn't know what position Mr. Hughes was going to take regarding the interest he had in TelePrompTer.

PAGLIN: This was Howard Hughes, right?

RICKS: Yes, so in order to avoid any problems we stayed on the sidelines during that struggle. Once the Hughes interests decided that they would side with Cooke and displace Irving Kahn, we were free to come back in and Jack Cooke asked if we would undertake and represent TelePrompTer. Principally he asked us to try to prevent a loss of the license, the FCC license, that was involved in the Johnstown, Pennsylvania cable system. The FCC being aware of the bribery by Kahn, decided that it would take the same type of action against the Cable Television Certificate of Compliance, that the FCC would have taken if it had been a broadcast license. The broadcasters all had sought to bribe the FCC, for example, for a renewal of license.

PAGLIN: Which was revocation.

RICKS: Which was revocation, of course.

PAGLIN: Was it designated for hearing?

RICKS: It was designated for hearing and we argued to the FCC that the Certificate of Compliance was intended not as an original license by the FCC but as a confirmation that there had been a licensing process at the local level in which due process was followed. Clearly, due process had not been followed in the proceeding which Irving Kahn bribed council members. But at our request, the city of Johnstown, Pennsylvania once again reviewed the qualifications of TelePrompTer to be its franchisee. After reviewing the qualifications, notwithstanding the bribery, and realizing those who were responsible for the bribing had been removed from the company and new management had come in, the city of Johnstown, Pennsylvania decided it would reaffirm and issue a new license to TelePrompTer to be its cable operator. We took that new evidence back to the FCC and told them they were now obliged to issue a certificate of compliance because the subsequent proceeding by the city of Johnstown was in all respect due process. We invited the commissioners to attend the hearings in Johnstown which they declined to do. At the oral argument before the FCC, Dan Ohlbaum was arguing for the FCC, in fact the prosecution arm of the FCC, the companies right to operate in Johnstown had to be revoked as a punishment to the company, even though the company had removed Kahn's involvement and all others involved. I argued that the Commission was without authority to take such action because its licensing was not original licensing but was really a confirmation of local licensing and they could not substitute their judgment for that of the city of Johnstown, PA. I remembered when Glen Robinson who as an FCC commissioner, responding to my argument that never in a blue eyed world would he go along with that theory. Plus I realized that I did not have his vote. In any event, the Commission voted to revoke TelePrompTers right to operate in the city of Johnstown, Pennsylvania. We appealed to the D.C. Circuit and the D.C. Circuit held that the FCC had no jurisdiction to take the action that it had taken and directed the FCC to issue a Certificate of Compliance. That was a most satisfying result and Cooke thereafter...

PAGLIN: Before we get to that, can I digress for just a second? One of the objectives that we have also in this entire project is the documentary aspect. On a thing like this, you may be the only one who has a copy of briefs and maybe even a transcript of your argument. Certainly the Commission's decision and then the briefs before the court. If copies of those could be made available for the archives of the Museum I think they'd be of great interest. You might want to make a note of that.

RICKS: I will.

PAGLIN: It is the only case that I can remember in all the years I was with the Commission that this particular issue arose.

RICKS: I think it was too. I think it was very interesting legal proposition in which commentators were divided all over why as to the extent of the FCC's jurisdiction.

PAGLIN: The articles that were written pro and con after that were voluminous.

RICKS: We argued essentially that the FCC had to follow its own rules. Its rules provided that if the cities were following due process, it was the end of it as far as the FCC was concerned. They couldn't go against these rules, simply because they didn't like the city. The Court of Appeals had no trouble with that.

PAGLIN: The Commission didn't take it up on cert did they?

RICKS: No, they didn't.

PAGLIN: They just dropped it.

RICKS: They just licked their wounds and went away.

PAGLIN: What was the date around now? '68 or '69?

RICKS: Yes.

PAGLIN: I was already back at FCC as Executive Director. You went on to say...

RICKS: Cooke then became the CEO, Chairman of the Board at TelePrompTer. He brought in Governor Shaffer??? to be the new president. TelePrompTer got caught up into the same franchising frenzy that other cable's systems did in the early 70's, seeking franchises in major markets. Really, not enough programming to attract subscribers to that system at that time. No satellite delivery service, of course, and they were just seeking to sell local and distant tele signals, so the company as did many other cable companies in the early seventies, was on the brink of bankruptcy. Cooke realizing that, came back and took direct control of the company himself.

PAGLIN: That was about when?

RICKS: That was probably '75 or so. He stayed in New York City for about a year, getting the company back on its feet. Then he brought in Russell Karp as the chief executive and he remained the chief executive until the company was sold to Group W. I believe around 1981 or so. It had grown to be the largest company in the business.

PAGLIN: So he's out of it now completely.

RICKS: He is out of TelePrompTer and Group W completely. He sold out entirely in 1981 but he came back in in 1987 and brought with McCaw [???] in North Carolina and now we've got about a half million subscribers.

PAGLIN: He can't stay away can he? Football is not enough for him.

RICKS: Apparently, he's paying a lot more than $300 a sub nowadays.

PAGLIN: $300 a sub, still makes me laugh, you know. In the old days. One other thing on this particular area of federal regulatory response. Did you also in your experience have occasion to participate on behalf of clients in the congressional hearings. In other words, at the congressional level? What was your participation, on behalf of whom and what issues?

RICKS: We represented NCTA in the congressional hearings on the pole attachment bill which I believe passed in 1974. We were very actively involved in that. We drafted the bill, we drafted most of the hearing, most of the testimony on behalf of the cable industry. We testified, we were deeply involved. Then the next major piece of legislation was the copyright bill of 1976 and TelePrompTer's president was one of the principal negotiators of that bill on behalf of the cable television industry. So we were deeply involved in preparing background material, supporting material for the Copyright Act.

PAGLIN: In the early days, when you first, or at least the firm and you would say, in the mid 60's as you would probably have recalled, there was a movement afoot to give the industry some legitimacy. At least there were schools of thought that it would behoove the industry to attain a level of legitimacy by being licensed. You remember there was an entire thrust there at the time in bills and I remember even when I was with Fred Ford, there were bills to license cable. Were you involved in some of that?

RICKS: Our clients, and I can't remember exactly who, but our clients generally opposed that legislation, and I remember that Senator Pastore was very deeply involved in that.

PAGLIN: Yes.

RICKS: On behalf of the Senate Telecommunications Subcommittee. But our clients generally felt that the bills were not good bills, so we did not support it, and we didn't really lobby against, because we were not in support of that legislation.

PAGLIN: Did you get involved in the situation? There was a flip flop there which was quite embarrassing and in fact, as I remember, infuriating to Pastore. That is to say, as I remember, one wing of the industry had gotten Pastore on their side and other senators, I think was it Monroney or Mansfield? Then someone else had, I don't know whether it was Monroe or somebody got the idea, maybe it was Milt Shapp, who got the idea that "wait a minute, this is the wrong thing to do." And started a grass roots effort to turn it around. Were you involved in that?

RICKS: I was an observer of that action. In fact, I was at an NCTA board meeting when the flop was beginning to manifest itself.

PAGLIN: Tell me what happened because I've heard about it.

RICKS: Well, it was very embarrassing for Fred Ford and whoever was in leadership in the industry because they had thought they had the troops behind them. They had made representations to Senator Pastore they could deliver the support of the industry and it turned out they couldn't. There was an unpleasant experience in it as they tried to find out really, how to maintain credibility in Washington, if they could not stick with positions that they thought were acceptable to a wide range of the industry.

At that time, the real power in the industry was not focused in an organized way through the National Association. There was really, depending on the issue, who cared enough to really work on it. There were people like Bill Daniels who were very influential, Alex Demmer [???], people like Milt Shapp very influential in Pennsylvania. There were people in Texas who had a fair degree of influence. The industry tended to be a Southwestern industry, a Pennsylvania industry and a Denver industry.

PAGLIN: A force in the organization, as it were.

RICKS: Then there were just a whole slew of very small operators who only cared about maintaining the economics of their own system. They didn't care if the industry grew in the major markets at all.

PAGLIN: The so-called Mom and Pop organizations.

RICKS: Then there were visionaries such as Bill Daniels and Milt Shapp and later people like Chuck Dollman, Bob (T.C.I.)....

PAGLIN: Magness.

RICKS: Magness. And others, Bruce Merrill, who realized that the real future of the industry was being able to provide a service that would be attractive in major markets. It already had good off the air television service. So there was a friction between those two types of people. What I might call the visionaries, were quite willing to make compromises if it meant getting more signals and less FCC restrictions that would permit development of larger markets. Those who had systems that were going quite well in the classical areas were not willing to make those compromises. I think that was the kind of a division in the industry.

PAGLIN: Were they concerned that licensing under FCC regulations would militate against development or bring more problems?

RICKS: They just didn't want FCC licensing.

PAGLIN: In other words, get the government off my back, to use a coined phrase.

RICKS: Yes. But there were others who had legitimate views that you shouldn't allow the FCC to license under a direct licensing scheme without some guidance in the statute as to what they could do and couldn't do. There was the feeling that the FCC licensing was influenced greatly by the broadcasting industry. That the regulations would be suffocating to the industry. There were people of good motives who were very anxious to see the industry grow who also felt that the particular legislation being proposed was not good legislation. This occurred again in '72, the whole consensus was over copyrights, distant signal carriage. Again, it was a division between the traditionalists in the industry who were quite happy to maintain the economics of their own classical systems, against those who were anxious to see the in service development in major markets.

PAGLIN: Who were some of the, to use your term, visionaries, people like Bill Daniels, Milt Shapp, some others of that kind. And who would be among the traditionalists, would you say?

RICKS: Oh, I would say George Barco would be a very good example. There are others.

PAGLIN: George Morrell.

RICKS: Yes.

PAGLIN: Except he was in between.

RICKS: Probably John Walson.

PAGLIN: From the Pennsylvania industry.

RICKS: The Pennsylvania group and also some in the southeast, I can't remember all the people. Those who owned and operated classical cable systems who were involved in the ownership with the management directly and were not acquisitive in the sense of trying to put together large companies. Particularly, they were not publicly traded companies. The companies that were publicly traded really needed to get out from under the perception that the industry was only a backwoods, rural type industry.

PAGLIN: Like CATV Community Antenna.

RICKS: Yes. They desperately needed to bring it into the 20th Century to make it look like a modern communications business, in order to get the public to buy stock and banks to loan the money and manufacturers to develop the new state of the art equipment. That was the kind of a vision that occurred in virtually every compromise legislation that came about.

PAGLIN: It's interesting to hear you put it that way, particularly, and naturally you'll develop it later on when we get down to the last sections, but this was not so much a legal issue as it was an industry issue. That is to say, the views of certain people in the industry as to where the industry was going.

RICKS: Well, the industry had legal problems. The solution to a legal problem was usually a compromise that affected the business. It affected the business typically in a higher operating expense, but perhaps a greater flexibility to grow.

PAGLIN: Can you give an example?

RICKS: Well, with pole attachment legislation. Of course, the problem was the utilities were interested in exacting rates, and the compromise was that the FCC was going to be given the authority to regulate those rates. The bill did not say the rate would be $2.00 and there were a lot of people who felt it had to be specific in the legislation. It had to limit the FCC's ability to set a rate that was fair in the FCC's mind. There was a raging debate over this. Some people said no, I can't trust the FCC Rates have got to be in the statute. Well, that would have been probably an unlawful taking.

PAGLIN: You wouldn't have been able to do that.

RICKS: In any event, that was a good example. Another one was the copyright. Of course, the industry had won two copyright cases saying that there was no copyright liability.

PAGLIN: Fortnightly...

RICKS: Fortnightly and the TelePrompTer and CBS. Dean Birch (Chairman of the FCC) made it very clear to the industry that they would never get distant signals unless they agreed to pay copyright. A lot of the people in the smaller markets said we don't need any more distant signals, we've got enough, all you need distant signals for is the major markets. Of course, that's where the distant signals restriction was at that time was in the major markets. The small system owners said why should we pay copyright in order to allow you to build New York City, Philadelphia, wherever. That was a very, very big debate and finally was broken by a compromise which of course, added a copyright expense. The compromise with the cities in 1984. The industry was concerned that the cities would continue to exact concessions or even extortion as they had done in the Johnstown case, as a price for renewal of franchise, unless there was legislation. The price for getting that was another compromise in which the industry had to allow access support payments, a 5% franchise.

PAGLIN: You'll get to that in the next section on municipalities.

RICKS: So a legal problem and its solution involved using a compromise. Getting the main objective but ending up having to pay a price for it.

PAGLIN: Do you see that throughout this until maybe very, very recently, you had these two elements in the industry that had come from different backgrounds and had different motivations and consequently there was this internal ferment that was going on about how you approach these problems? I can remember too, that in '64, going to the conventions, meetings, State associations and you always had the people who I used to call Mom and Pop operations and the other people like Daniels and Shapp and people like that who foresaw that this was one part of a larger telecommunications complex. Apparently it has remained that way over the years. Isn't it a fact that we still have a great number of "small systems"?

RICKS: We still have a number of small systems but more and more frequently they are beginning to be owned by larger companies. There are still a lot of individually owned systems by numbers, but if you added them all together the subscribers, there would probably be only about 5% of the total subscribers. There has been another very interesting parallel of the development of the industry is what is now Continental Cable Vision. I believe they are the third largest company in the business. It is an interesting contrast to some of the other companies. Continental was started by Amos Hostetter and Irv Grousbeck, Harvard Business School graduates who were working as investment bankers and had seen projections for cable television systems. They thought to themselves that this looked like a pretty good business and they went out in the late 60's to Ohio and bought some small cable systems in Ashley, managed them and operated them. Got some private investors to put more capital into the company and built it up with people who had an M.B.A. type of background in education, rather than people who knew the industry from having worked in it before. They developed an extremely successful company which has grown steadily and has recently surpassed a million subscribers and is certainly by far the largest closely held company in the business.

PAGLIN: That's interesting. Well, would this be a good place to stop?

RICKS: Sure.

PAGLIN: This again is very, very valuable because it is giving us an insight from a lawyer's point of view. I haven't seen the transcript on Strat Smith but we do have a transcript on Henry Geller's participation in the early days which when it's published will I think, amuse and interest, and surprise a lot of people. I'll just digress for a second to say that one of the objectives of the initial oral history project was what I call the three legs of the stool. My project proposal was to get initially, an "inventor" which was Marty Malarkey to begin with anyway, an entrepreneur (Bill Daniels) and a regulator (Henry Geller) and two or three of them have been published anyway without restriction. Henry's will be. To hear the same story being told temporally wise, being told by these three different points of view is what we are seeking. Now here today we have the beginning of a totally different approach by a big law firm counsel who was in at the very beginning. It's going to be invaluable. Thank you again for our first session and would it be suitable and convenient to set another time?

RICKS: Sometime in early September.

PAGLIN: Thank you again very much and I'll see you again very soon.

End of Tape 1, Side B

PAGLIN: This is December 3, 1987, and we are in the offices of Jay Ricks of the law firm of Hogan and Hartson. This is the second taping session for the Oral Histories Program of Cable Television Pioneers, being conducted by the Golden Jubilee Commission and the Pennsylvania State University and the National Cable Television Museum. Good morning, Jay.

RICKS: Good morning, Max.

PAGLIN: What I'd like to do is talk with you today on your recollections of your interaction with some of the other cable pioneers. You will recall you told us of your meeting and working with Jack Kent Cooke and with Bill Daniels, Milt Shapp, and George Barco and some of the others. So I'd like first, and I'll give you kind of an outline of where we're going to go, to talk about some of the other pioneers, about whom you have some recollection and also your impressions, candid or otherwise, of some of the FCC Commissioners or FCC staff , in terms of their attitudes on cable television in the early days, and perhaps the same kind of thing with regard to some of the members of the Congress and Congressional committee staff.

Then what I'd like to do, toward the concluding sections of our interview, would be for you to give your overall assessment of the early years of cable and what you think of their impact on the opportunities and the problems of the industry today. Next, some of your predictions about the future role of cable in the development of telecommunications as a whole and finally your views on the future course of cable technology and what you see as to the need, if any, for any federal and or local regulation of the cable industry in the years ahead.

RICKS: All right.

PAGLIN: So, starting back about what your recollections are of some of the other cable pioneers that you came into contact with.

RICKS: Well, of course, I may have mentioned one of my early legal assignments was to assist the cable industry in the developing conflict with the utility industry over the use of pole plant and conduit. Ben Conroy was the chairman of the NCTA utility relations committee and so I worked closely with Ben. George Barco was on that committee. We fought some of the early battles, had lengthy negotiations with representatives of the Bell system, seeking some accommodations, some compromises on the issue. That issue became so important to the cable industry, apparently especially important in the telephone industry, that we weren't able to settle it. The matter escalated into litigation, both before the FCC, then later legislation before Congress, and I recall that Amos Hostetter, succeeded Ben Conroy. So I ended up working first with Ben and then later with Hostetter. Finally achieving the statute that directed the FCC to regulate the area of conflict. From time to time I can recall there was an occasion when we worked with probably most of the people who were in the industry, Gene Schneider, Bruce Merrill.

PAGLIN: Bruce, at one time, also had an NCTA connection.

RICKS: Yes.

PAGLIN: That was at the time when Fred Ford came in as president. It was about '65.

RICKS: Correct. Fred Lieberman. Jack Crosby. Jack was also one of the early chairmen of NCTA.

PAGLIN: How did you generally find their attitude at the time, let's say, as contrasted with the more sophisticated attitude today? Remember in those days, and as you recall I worked with Fred Ford when he came in. There was kind of a prevalence amongst people, particularly out in Midwest and the west, they were the so-called Mom and Pop industry. There was the singular sense of individual opportunism and using the phrase of today, "They didn't want the government on their backs." A lot of them couldn't understand the need for at least some regulation. What was your impression of these things?

RICKS: You make a good observation. The Mom and Pop operators, the small operators, and some of them were not so small by today's standards. They were sitting on some very valuable property. The people who had cable systems in classical cable markets. That is, markets that could not get television reception without the aid of cable, wanted to be left alone by the government, by everyone else. They wanted the ability to serve their subscribers and to make the money and to, if necessary, sell out at some point and take their money and live happily ever after. Then there were those in the industry, probably best characterized by Bill Daniels, and some of the people who were starting to get involved in publicly owned companies that wanted cable to have a future beyond the classical markets. They knew that was going to create a conflict with some of the vested interests, such as the broadcast interests, and others, but principally the broadcast interests. I guess the program owner interest, the copyright owner interest and that eventually was going to require compromise. It was going to involve government regulation and so they had a much more expansive view of where the industry might go and they acknowledged that it was going to have ramifications and that they would have to deal with those. In hindsight it was amazing that the two groups were able to coexist in the association and in the industry and socially, professionally and in many other ways they did. It was really an obvious and open conflict between the two objectives.

PAGLIN: I remember there used to be some really knock‑down, drag out fights during the board meetings.

RICKS: The group that was represented in effect by the small classical system operators wanted to have a "We don't want to build in big cities", "We don't want to take on the television industry, Let's fight 'em in the streets, in the beaches , in the hedgerows, and we'll never surrender to any form of government regulation, and we'll never compromise".

PAGLIN: Yes, I remember it well. The George Barco's and the like.

RICKS: George was a very articulate representative of that group.

PAGLIN: And George Morrell.

RICKS: That's right. As typically happens, the visionaries prevail in that type of debate and the industry moved in the direction that required compromise, required some accommodations of the other technologies.

PAGLIN: Who were you representing at that time?

RICKS: Because these things were always changing, some of the companies we represented at the time were companies that themselves were in somewhat of a transition. Jack Crosby, Fred Lieberman had started communications properties which had gotten a franchise in Louisville, Kentucky.

PAGLIN: Were they together at the time?

RICKS: Yes. They found that under the FCC regulations they couldn't build it. Couldn't get any service with the '72 rules. While they had been small system operators they had to recognize that a lot of rules of the game were being dictated in Washington and they had to start dealing with those. Then we represented in that time, Continental Cablevision, which at the time was a company composed principally of classical cable systems.

PAGLIN: Who owned it then?

RICKS: The same group who owns it now. Amos Hostetter was one of the principal owners, Irv Grousbeck who is now no longer with the company, were the co‑founders along with some private investors. We continued to represent Jack Cooke who by that time had put his interest in TelePrompTer. TelePrompTer being a publicly traded company was interested in the industry not being characterized as just a small town industry, but one that had a future.

PAGLIN: Even though at the time TelePrompTer had started in the very, very small towns out west.

RICKS: Sure, but Irving Kahn knew that you could never impress Wall Street by only being a small town operator. Then some of the cable systems that we represented at that time were those that were owned by media companies that had evolved as you well know, Max, from newspapers to radio to television to cable television. That included the Steinman interest out of Lancaster. The Shears Communications out of South Bend.

PAGLIN: Who was that?

RICKS: Franklin Shears, the South Bend Tribune. Gordon Gray up in Utica, New York. The Journal Company in Milwaukee. These were a lot of the old newspaper broadcast clients in this firm who recognized that there was simply one new technology on the horizon and they ought to be in it.

PAGLIN: That was about in the early 70's, wasn't it?

RICKS: Yes, late 60's, early 70's.

PAGLIN: Who then was president of the NCTA and some of the leading members of the board?

RICKS: Well, they had after Fred Ford it was Don Tavernor [???].

PAGLIN: Fred left in '69.

RICKS: I cannot remember precisely.

PAGLIN: I think it was '69.

RICKS: Don Tavernor??? and then David Foster.

PAGLIN: I didn't know him.

RICKS: Neither of them had any background in cable television. Tavernor had been involved in public television and I think he was selected because he was a forceful speaker and they thought a good representative. The industry recognized that they needed a representative in Washington, most importantly. Then, Foster had, I believe, an association background, not in cable. Because neither of those two had a strong background in cable, staff members such as Bruce Lovett, Gary Christiansen, and others had a fairly significant influence on the policy of the association.

PAGLIN: Also, Wally Briscoe.

RICKS: I would say the board members who were very influential in those days would be Monty Rifkin.

PAGLIN: Al Stern.

RICKS: Al Stern, very much so.

PAGLIN: Bruce Merrill.

RICKS: Bruce Merrill. Bill Daniels.

PAGLIN: Bill, by that time, had gotten involved in sports. But he was still quite effective.

RICKS: John Saeman was active in NCTA. Hostetter, Rex Bradley who was in Telecable Corporation.

PAGLIN: I didn't know him. Storer had not yet gotten involved with this.

RICKS: No, they were just getting in, in the early 70's.

PAGLIN: What is your recollection, Jay, about what the NCTA board's attitude at this time was about the Commission and the Congress because this was pre‑'72 rules, but it was on the borderline.

RICKS: Until the rules that were imposed that absolutely froze the importation of distant signals, I think the attitude of the NCTA board was very much confrontational. They didn't want to work with them, they wanted to fight them. The Commission really shut down expansion of cable with the rules that were adopted in 1969. So there was a three year period when many companies in the industry were technically bankrupt because they had sought to build some markets where they could not get enough product to sell service. That included virtually every publicly traded company in the industry, was on its back. Since at this time there was really no cable network programming, no movie programming, no original programming available for cable, the importation of distant signals was the only thing you could offer a subscriber.

PAGLIN: This was, in effect, the prohibition of importation of distant signals into the big city. Which as you would explain, I'm sure, were the only economically viable method of being able to institute a system in a big city.

RICKS: Since at this time, there were really no cable network programming, no movie programming, in fact, original programming available for cable, the importation of distant signals was the only thing you could offer a subscriber.

PAGLIN: The satellite had not come down the road yet. This was '69.

RICKS: The industry leaders realized that the FCC had them in a very vulnerable position and that they had to make some accommodation. There were various people on the Commission, like Ken Cox who was extremely antagonistic toward the cable television industry. Principally because Ken was a regulator of the broadcast industry and he wanted to regulate the industry, but he didn't want the industry's economic ability to be in any way to be adversely affected by new technology he could not regulate. So he wanted to impose very stringent economic regulation on cable to keep it to the so-called classical role of supplemental broadcasting and not importing distant broadcasting. Certainly, of his close associates in that endeavor would be Henry Geller, Martin Levy.

PAGLIN: Who were also in that same school, you would say.

RICKS: Then there were people such as Rosel Hyde, Chairman of the FCC, who were simply not strong in their philosophy and tried to seek consensus. Then Dean Birch came on the scene as the new FCC chairman.

PAGLIN: That would have been 1970.

RICKS: Yes. When Birch came on the scene, he took a look at the situation, realized it was crying out for a solution, and he made the solution copyright. Agree to copyright liability, for importation of distant signals and we'll take off the restriction. It was a fascinating debate within the industry. Going back to our earlier conversation, Max, about the classical versus the new trend in big cities, the people who had cable systems such as George Barco and others in small markets saw no reason to pay copyright and they won two Supreme Court cases and they didn't have to pay copyright, why should they agree?

PAGLIN: It was the Fortnightly case, you mean?

RICKS: Simply to hype somebody's stock and let somebody go in New York. It was a raging debate and it came down to a board meeting that was held in Washington and by a fairly wide majority, the board voted to accept the consensus that Dean Birch was pushing.

PAGLIN: This was when?

RICKS: This would have been close to '72, probably '71 that this occurred. Then the consensus was reached that the industry would agree to copyright liability in return for freeing up distant signals. Birch carried through on that promise. The '72 rules were then adopted which really allowed the industry to go forward. The Congressional side at that time, like Senator Pastore from Rhode Island, was the strongest personality that the industry had to deal with. His trusted sidekick, Nick Zapple, and there was always... One rarely heard from the Senator directly, one usually heard from an intermediary, "the senator wants you to do something".

PAGLIN: How well I know. Even at the Commission at that time. Nick used to come in and say, "The Senator wants so and so."

RICKS: Whether the Senator wanted those things or Nick wanted those things.

PAGLIN: Actually the only time you would hear from a senator was at a hearing. Nick could not feed him too much then. Do you remember that?

RICKS: Yes. In any event, the industry would try to jump when the senator wanted something because of the inability to get together on legislation, the word around town was the Senator was mad at the industry because they reneged on their promise of comprehensive legislation. I think it was probably a bum rap but that was the big rumor. The cable industry was not effectively represented in Congress, mostly because no one knew how to do it. No one had really any experience in grass roots lobbying. The industry had never really sought to galvanize the grass roots potential. The industry didn't know how to deal with lobbyists. They didn't know who was really effective. They didn't know what educational lobbying was about. They didn't know if you threw money over the transom or what you did.

PAGLIN: The only instance that you probably recall is a kind of a one on one. If one of the operators had a beef against whatever, he would get his Congressman or his Senator to write to the FCC but that was the extent of it. Is that correct?

RICKS: That's right. The industry slowly became educated and more sophisticated as you expect, as in fact it grew and required more effective representation. We obtained it, both in the association and in the people who became lobbyists, etc. So that by the time we were seeking, for example, to get the pole attachment bill through in the early 70's, which was before the Lionel Van Deerlin House Committee. The industry had hired Bob Schmidt as the new president. Bob was very sophisticated in dealing with Congress. He brought in Tom Wheeler who was one of the real summit politicians.

PAGLIN: You wouldn't want to make a pun like Wheeler ‑ Dealer.

RICKS: No. He was really quite good. Very enthusiastic, very well informed, and had boundless energy. All the other characteristics one needs is boundless energy. We just pounded on doors and sold our case on its merits. Arguing that we weren't seeking favors, we weren't seeking to take money from anybody. All we were seeking was a fair hearing. And that the utilities were seeking to impose monopoly rates on us without giving us the opportunity to have our case heard by any forum. Every Congressman that we talked to felt that was wrong. That if we were up against a monopoly, you ought to have a place where you can go and have your case heard. So they gave us the legislation and that was the first time the industry had ever gotten through a bill that was specifically directed at the cable television industry. It was a real milestone because it demonstrated the clout that the industry has if it focuses its energies and if it has a legitimate story to tell.

PAGLIN: That is in contrast to,[???] do you recall, it may have been a little before your time, the efforts at the time when Fred Ford came in a little later, trying to get cable legislation and, as you say, the legislation was good but they simply didn't have the clout at the time.

RICKS: They didn't know how to do it. The Schmidt ‑ Wheeler era really brought in the sophistication of legislative lobbying. Then the industry was required to carry through on its promise of copyright legislation and that was an enormous undertaking in which negotiations were held with money, principally Russell Karp, the CEO OF TelePrompTer, and a committee of others in the cable television industry. Then having reached the consensus that they did, they actually wrote the legislation, took it up on the hill and they got it through. That was Section 1‑11 of the Copyright Bill.

PAGLIN: Who was it on the broadcasting side?

RICKS: The broadcasters really weren't involved directly in that.

PAGLIN: So it was the producers.

RICKS: It was the copyright owners, principally Jack Valenti from MPAA. And a committee of NCTA

PAGLIN: The actual day of the copyright legislation was in '70...

RICKS: '76.

PAGLIN: That's an interesting story. Going back now, that closes an era, wouldn't you say? As just kind of a footnote, to the early days, of discussion about copyright. I can recall when I was with Fred Ford as his counsel, and the first meeting in 1965 at the CATV convention in Philadelphia. Part of his speech and part of the discussions, was an attempt with some of the members of the industry who we tried (Irv Kahn and others) to persuade, members of the board and the industry, that copyright was coming. There was, as you recall, that hard phrase "the pirates". We tried to convince them, "No, no you're not pirates, but after all as far as those others are concerned, you're taking something that they think belongs to them. This is the time to sit down with them and negotiate." But no, you couldn't sell it for I don't know what.

RICKS: Well, you never sell it without getting something in return. That's what Dean Birch did. He created an incentive to...

PAGLIN: Of course, the development had not broadened yet the early 70's, middle 60's. Some of the members of the industry already saw that this was an issue that was going to come. It was on the horizon. But you couldn't get the others to listen.

Going back, you've told us some of your impressions. What about some of the other FCC commissioners who were kind of on the fence and helped before Birch came?

End of Tape 2, Side A

PAGLIN: I'm sorry Jay, we had to change tapes. You were beginning to telling me a little about some of the other commissioners during this time.

RICKS: Commissioner Robert E. Lee, long time Republican Commissioner, was dedicated to the development of UHF television and simply was unwilling to accept the obvious fact that UHF had a severe technical disadvantage, vis-a-vis, VHF. Being unwilling to accept that fact, he was unable to accept the fact that cable corrected that technical deficiency. Therefore, he looked at cable as something that was going to compete with UHF for the few dollars that were left after the VHF stations took the lion's share of it. I thought he was dead wrong and I think that maybe toward the end of his career he may have realized it, but in the early days, he usually lined up with Ken Cox in seeking to discourage the development of cable.

I have a recollection of the cable industry seeking to soften Lee up to show him the error of his ways. I invited him out to the Western Cable Convention and we were walking through the convention, looking at some of the hardware displays and there was a television set, set up with an equipment display that was a character generator so you could have little alpha‑numeric images on the TV screen, and Bob stopped and in his horror said, "That's origination!" That was?

PAGLIN: Prohibitive.

RICKS: Absolutely the worst thing in the world that anybody could do and it was right next to obscenity and indecent language. He really was dedicated to trying to stop that. He saw that as a development inimical to the health of UHF.

PAGLIN: A real threat.

RICKS: Yes. Just as kind of a humorous aside to that. Later, he and I went up to Portland to another small convention where we were both going to speak and arrived late in the evening in Portland and around the piano with Fred Ford singing Irish songs till the wee hours. In the morning both of us felt kind of lousy from our party the night before. Although I didn't know he did too. I looked under the hotel directory and they had a masseuse there. I thought a sauna and a massage would get me healthy enough that I can't speak at the luncheon we were having. So I went down and made an appointment. I was in the midst of having a relaxing massage and the door opened, there was a little bell on the door that made it ring. The door opened and a woman says, "Is that you Mr. Lee". He had realized that he had to get well too. In any event, the other commissioners that I recall, it was a strange group, included Nick Johnson.

PAGLIN: You mean when he came on the bench.

RICKS: Nick Johnson on the FCC though he was not with us on this trip.

PAGLIN: Nick Johnson came in around the end of 1966.

RICKS: Nick, in my opinion, was a demagogue who was simply usually seeking controversy and he never had any philosophy that was predictable as to where he would come out on a regulatory issue. He just happened to be where he could make the most publicity out of what he said. I didn't have a lot of respect for him as a regulator. I really don't have a recollection of others on the Commission during that time.

PAGLIN: Was Loevinger still there?

RICKS: Yes, Lee was there as a matter of fact.

PAGLIN: He joined Hogan of Hartson when, I forgot.

RICKS: I forget when he joined us. In his decisions he had been a judge and he decided cases very much like a judge would decide them, on the facts and the law. That was an advantage typically to the cases that I was involved with then, because it was mainly an emotional prejudice or emotional bias that was hurting cable and not facts. No one had ever been able to prove that cable hurt broadcasting.

PAGLIN: By early studies.

RICKS: It was all intuitive. Loevinger, as I recall, was really quite good. When Dick Wiley got on the Commission, Dick was very anxious to seek compromise and consensus among the groups, so he was helpful in trying to bring about...

PAGLIN: That was also about 1970....

RICKS: He was a Nixon appointee.

PAGLIN: He came on as General Counsel in 1970 with Dean Birch and then became a Commissioner, I think in '72, from there. That was about the size of it.

Now if we can move along to some overall assessments of some things that I mentioned in my early indication of where we would go today. I think you have already spoken in terms of how you felt the early years of cable television had a kind of an impact on the later developments, that is to say about the copyright problems and the distant signal importation. Are there any other thoughts that you would have with respect to, say, an overall assessment of the early years and their impact on both the opportunities and the problems of cable today.

RICKS: Well, I don't think that anyone saw the entire simple big picture. Maybe people like Bill Daniels had a better idea than most. No one really saw the marriage of satellite technology, the enormous appetite of the American people for variety of programming, the success of Home Box Office, the entry of some big players who filled a very essential role. There were many who were pretty darn close to seeing it all. I think that the industry, once the copyright thing was resolved and the satellite distribution system came into place, it became wild for a period of time. It grew perhaps, faster than anyone had anticipated. Now it appears to me, Max, that the industry having recently passed the 50% mark, which is probably the tipping...

PAGLIN: Penetration, you mean.

RICKS: Is probably the tipping point in that the industry will now go from a 50% saturation up to a 60% and then maybe even a 70% of all U.S. homes. It will become the principal way that people get video entertainment. I think that advertising will become an increasingly significant part of the cable revenue picture. The next technology.

PAGLIN: Before you go to that, may I ask you a question? When did advertising become such a significant element in the industry itself? When did you see, as a leading figure in terms of legal representation, advertising becoming a significant factor? There was a time when it was prohibited, nobody would even talk about it.

RICKS: Cable advertising has only in the last five years become significant and because the typical advertiser is looking for an outlet that shows up as a measured service on Arbitron and Nielsen, very few cable services were able to reach a level that would give them a national measured audience. They simply weren't able to sell it. People simply didn't understand a service such as the Weather Channel that may only have 100,000 viewers in any fifteen minute period. It may over the course of the 24 hour period, have 5 million viewers and those viewers may only be there for five minutes. So if you're advertising and circulating through that five minute period you have a chance to be seen by a million people but never at the same time. The advertisers have been slow to accept that. They would much prefer to be certain that they are seen on the Cosby Show by 15 million people.

PAGLIN: That being because of...

RICKS: Because the measurement service says there are 15 million people watching Cosby.

PAGLIN: And it's something they grew up with as a criterion.

RICKS: It's just that that's a way of accepted measurement. So cable has had to fight ingrained habits in the advertising world and it has been, in my opinion, only in the last two years that they are being to get anything approaching comparable prices for delivering the same 1000 eyeballs to an advertiser. That's going to grow dramatically as cable gets more popular programming, particularly because there are fewer commercial interruptions on cable. I think that they eventually will be able to show that it is an effective medium of advertising. I see that as probably the biggest development that will grow out of achieving the more than 50% penetration in the homes.

PAGLIN: That gets us into your predictions, as it were, for the future role of cable. Carrying that along, in terms of the development of cable's role in the overall complex of telecommunications, its other features, what are some of your thoughts about its future role.

RICKS: I think the most important additional feature that cable needs is the ability to cater to the subscriber who wants to watch something at a particular time. I'm really talking about being a technological equivalent of a video cassette store. So that the person who would otherwise go out and get a movie at a video store, will feel that cable television is a comparable equivalent. Which means that cable will probably have to develop some means of accessing a library.

PAGLIN: Explain that a little more for future researchers who are going to be looking at this tape. You're talking in terms of what is called interactive, but a two way form of communication.

RICKS: Not necessarily. You could do it by telephone. However you activate it.

PAGLIN: In any event it is two ways.

RICKS: It is a two way system, but principally it is a system that can access a library of material as distinguished from the current system which simply sends everything down the pike that is being shown at a particular time.

PAGLIN: The viewer is a passive participant.

RICKS: The viewer switches through that menu and takes what's there. Maybe through fiber optics or something, the menu could be so vast that there are so many choices coming down the pike, hundreds of choices all the time, and all you do is flip through it and access the one you want, so that you don't need what you might call a switching system. Simply, you are able to pick from what's there and the menu is so vast, it will be likely to accommodate anyone's tastes at any particular time.

PAGLIN: At any particular time. That refers then to the other thing you were mentioning, that is to say, if there is a system of active accessing, then the viewers' convenience of the time of viewing would be a critical factor, would it not?

RICKS: Yes, but if you look at it this way, today if you look in the newspaper at the popular films that are being shown today...

PAGLIN: On cable?

RICKS: No, available in theaters. There are probably six or eight films that are showing. If you were to be giving the movie companies their theatrical release and then say, all those movies will come out of the window at the same time and be available for some type of a pay‑per‑view release and you had all six or eight of them on channels, on a cable system, and every two hours, they were staggered in such a way that one was starting every fifteen minutes. Then you probably would be giving viewers enough convenience of time and choice so that no one would feel it necessary to go down to a video cassette store and rent one of those movies.

PAGLIN: This would be on a twenty four hour basis?

RICKS: Sure. Why not? It doesn't cost anymore to do it on a twenty four hour basis. Then if somebody wanted to, they could tape it and play it when it was more convenient. The typical cable system now has a single pay‑per‑view channel and that is not equivalent to what the video cassette store sees. I think eight to ten channels would be. Or a channel, that as I say, would access a library. That's what I think is the next significant step that cable has to take to make the service more convenient.

PAGLIN: They actually have the technology now?

RICKS: Well, as I say, fiber optics probably would give you such a vast spectrum that you could accommodate it within that spectrum. Then it may be that even coaxial cable would do it with proper amplification. I'm not sure about that. I think it can be done under today's technology, it just has to be done in a way that's economical. I still, Max, am somewhat of a skeptic about the use of cable for many of the blue skies of what you might really call telecommunications services.

PAGLIN: I was just about to ask that.

RICKS: Clearly the system works very well as a multiple address system to get information from a single spot out to all of the addressee locations or any addressee location back to it. It is not designed and currently does not work well as a switched network in which one addressee could talk to another. I continue to believe that the telephone company is in better condition for that type of service than cable because of the design of the plant. I don't see that as a being a big revenue source for cable, at least in the foreseeable future.

PAGLIN: Do you see any other role for cable in other fields, such as being explored now by some of the systems, such as power utility, load management or paging, for which technologically they have the ability. You don't see that as a factor?

RICKS: No I don't. I think that in competition with the telephone industry and competition with other telecommunications providers, I think that cable is not well designed or suited for that particular role. Others will disagree with that, but that's my idea.

PAGLIN: That's why I asked it because there are others who have, as you say, blue sky visions. If you remember a few years ago, that blue sky became very, very gray. So basically you see it as a means of mass entertainment, mass information.

RICKS: Yes. And it is really a marvelous job. The emergence of C‑SPAN and its ability to allow people to actually see the drama unfold of a legislative hearing is having an enormous impact on the public.

PAGLIN: On its democratic process. C‑SPAN is popular?

RICKS: It is popular among a much larger segment of the population, I think, than anyone realizes.

PAGLIN: What are we talking about quantitatively?

RICKS: I don't have any idea. As I travel around and talk to people, I find that instead of watching soap operas, a lot of people are watching C‑SPAN during the day and finding that it is very fascinating. I think that group is increasing all the time. When you think about having people really looking at government, continually like that, the impact is going to be enormous.

PAGLIN: I've run into things where it surprises a lot of people, that the American people at least, are so fascinated with the processes of government. The hustlers, the hucksters always said you've got to sell them soap and that's all. I take the example of my wife. We don't have cable yet. We're a District of Columbia resident. When the Congressional hearings come on, she tells me in advance that we're going to have tuna fish for dinner because she is stuck to that set all day long and is absolutely fascinated by it.

RICKS: I guess I would close my remarks or you can ask me anything more you want, Max, but I would make this observation. Cable has succeeded beyond the wildest dreams of most of its proponents. It has won legal regulatory and legislative battles beyond anyone's reasonable expectations. It is achieving financial success that is probably beyond the expectation of most prudent investors. It has not suffered in the last ten years, at least, any really significant setbacks. The horizon has probably only one significant threat and that's the telephone industry. The telephone industry is salivating over the prospect of getting into video entertainment as a means to help underwrite the cost of the stolen [???] fiber optic development.[???] They know that if they are able to achieve that goal, it will be impossible, from a practical point of view, for any regulatory agency to determine whether the telephone subscriber or cable television subscriber is subsidizing the cost of the fiber optics.

PAGLIN: You say it would be impossible?

RICKS: Impossible to do. It would be practically impossible. I don't think any regulatory agency in the world could handle that problem. They now have a situation in which N.T.I.A. sought to ask the Commission, the FCC to declare that telephone companies can provide information services, contrary to Judge Green's order. The FCC is in the process, I'm sure, of seeking to tell Congress that it should remove the prohibition by telephone companies of providing cable service. It's going to be a difficult period for cable to weather because these forces are coming together and fighting very hard to remove those restrictions.

I continue to believe that Judge Green was absolutely correct in his original decision which forbids telephone companies from getting into content. I think it's a good decision. I think they should remain as a common carrier. They are building many cable systems, as you know, as common carriers. That's their proper role, for the telephone company. But I think our society has done very well without having the local telephone monopoly get into the media business. We'll have to see when that one comes out and it's a very significant issue to the future of cable.

PAGLIN: It's interesting that you should put it that way because it brings us back some sixty years. You weren't around, but you remember the history. Back when broadcasting first started, telephone companies were there and it was all theirs. Then as later, in my opinion, the telephone companies were so afraid of the anti‑trust aspect of the accusation of monopoly. If you remember, they backed away from broadcasting.

RICKS: I remember the history even better than that, Max. They had reason to be afraid of the anti‑trust. AT&T owned a broadcast station and AT&T refused to interconnect its facilities so that other stations could, in effect, engage in network programming.

PAGLIN: And this was in the 20's.

RICKS: Very early 20's, that's right. It was the most blatant, brazen misuse of a monopoly, a common carrier facility that one could imagine, using the monopoly common carrier facility in order to prevent a competitor from broadcasting a program in competition with your own station. The government wisely, in my opinion, decided that common carriers have natural monopoly characteristics. We will regulate them in order to protect the public interests but society is better off if we have media providers as unregulated information providers. That's all that Judge Greene is seeking to accomplish in 1987.

PAGLIN: You know the old French expression, "Plus ce change, plus ce le memes chose". "The more things change the more they remain the same." Here we are, sixty years later and it appears that, although in a quantitatively enormous dimension, what you're saying in effect, is that the principle is the same as it was in the early 20's. The telephone industry is suddenly realizing what there is available.

RICKS: There are commissioners and government representatives who perceive nothing inappropriate with having one company control the one wiring in the home, because there are such wonderful economies of scale. Monopoly has a wonderful economy of scale. They are rarely realized because a monopolist has a different view about it. We have many, many people who have not remembered their history.

PAGLIN: That's the point exactly. Would you be willing then to speculate that it won't be long, perhaps, before those who ignore history will suffer the mistakes of history.

RICKS: History is bound to repeat it.

PAGLIN: I'm glad to hear you say this because I personally felt the same way, having been around some forty‑five years in this business. I see this coming and I'm horrified that they don't realize the lessons of history. To take a totally unregulation. This is not, in my view, the place where that kind of economic theory works for the benefit of the public.

RICKS: It's not regulation's structure.

PAGLIN: That's right.

RICKS: Judge Greene has a structure that seems to be working very well.

PAGLIN: What you're saying, Jay, is that you see the next big fight, in terms of the overall competitive complex, of the industry finding itself in the kind of competitive struggle which you describe.

RICKS: Yes, I think all of the other obstacles or problems or challenges, or whatever you want to call them, are minor skirmishes that do not have any fundamental impact on the future of the industry. I think that the telephone conflict is major league and is fundamental.

PAGLIN: Would you guess that, as in the past, that the only solution might very well be legislative?

RICKS: Well, there is legislation and it would have to be changed in order to really allow...

PAGLIN: When I say legislation I mean, a legislative solution to the problem. Is that what you see?

RICKS: As I say, there is currently legislation that is a solution to the problem from the cable point of view. The telephone industry would have to get that legislation changed.

PAGLIN: You are referring to particular legislation.

RICKS: Yes. The Cable Policy Act of 1984 kept the telephone companies from providing cable service within their own areas. Even that statute is not sufficient by itself, because that statute would probably allow some aggressive joint ventures in which someone other than the telephone company was the nominal provider, and that the telephone company was a joint venture. Judge Greene's decision put some flesh on that and keeps the telephone company pretty much in the role of a common carrier and not as an entrepreneur who is going to take the lion's share of the revenues and give the provider only ministerial roles. It is both a legislative situation and a legal one.

PAGLIN: For the future. Did the cable industry, as an industry, see the problems that you are now articulating in terms of the divestiture of AT&T and Judge Greene's early decision to modify the Final Judgment, and all that?

RICKS: Yes. The cable industry participated in that, and I think was partially the reason for being successful in getting the information prohibition against the Bell companies. Without that, it could be a different situation today?

PAGLIN: The interesting thing is that there wasn't that kind of trade publicity as to the other end of cable ‑‑ as to the role that cable was playing in the early proceedings that ended up in the MFJ (Modified Final Judgment).

RICKS: Cable cooperated in giving several of the so‑called case histories of any type of conduct by an industry. The cable history was given. When they came to the point of their proffer of evidence...

PAGLIN: This was during the trial?

RICKS: Yes. The government decided that they did not need the cable industries in order to achieve what their goal, was which was a structural separation of the local Bell companies from the long distance carriers and the separation of Western Electric. In effect, the competitor.... The cable television industry was represented before Judge Greene in the Tunney Act hearings in MFJ. In fact, I appeared on behalf of the cable television industry. We were selected as one of the representative spokespeople. Going to those hearings, I think there were 10 selected out of the many, many who had sought to intervene. We argued very strongly for prohibition on information by both the Bell operating companies and a restriction on AT&T. We won both. I have to say with candor that we were not the only ones. The A.N.P.A. was certainly an effective advocate in that position.

PAGLIN: The American Newspaper's Publishers Association.

RICKS: Yes. Then in the most recent modification. We have been very active in keeping the modification as narrow as Judge Greene intends it to be. In which the typical loophole is opened up and the telephone company seems to widen that loophole. The cable industry has been very mindful of the telephone threat, it's been very active in certain systems.

PAGLIN: In the petitions for waivers, has the cable industry been formally served in all those pleadings?

RICKS: Yes. We are a party intervener.

PAGLIN: So when the RBOC's, the regional Bell companies file these petitions for waivers, with regard to marketing services, information services and all, the cable industry is served. Are you lead counsel on it?

RICKS: Yes.

PAGLIN: So you get served and then respond.

RICKS: Yes.

PAGLIN: So that's the way you keep a handle on it.

RICKS: Yes.

PAGLIN: This is really very interesting that it hasn't been raised before in the discussions we had with others about these particular views. That's what makes the oral history so much more valuable, that your views of the future in terms of cable revolved about a situation that really originated back in the 50's. That was the problem with the telephone companies.

RICKS: The telephone companies just blew it. They didn't think that cable was going to amount to anything.

PAGLIN: That's right. That's why I think in certain circles they thought that the telephone company, except for the problems I mentioned, blew it when broadcasting started. As you say, there were situations when they overreached themselves in the very beginning and they probably backed themselves into a corner and couldn't do anything about it. They would have been the logical ones at the time. Now, do you have there any other "pearls of wisdom"?

RICKS: No, I think you have found them all.

PAGLIN: This is really, really very fascinating. I might say again, my thanks on behalf of the Golden Jubilee Commission and the Cable Pioneers, particularly Penn State and the National Cable Television Museum. As you know, when these oral histories are put together they will be available in the archives of the Jubilee Commission and of Penn State and particularly the National Cable Television Museum.

RICKS: Well, Max, I am flattered that you have honored me by seeking to learn what my experience has been in the cable industry.

PAGLIN: If it makes you feel any better for the day, I want you to know that from a number of sources, I was advised that you must get to Jay RICKS: because he's got a lot of stories to tell. Again I want to thank you.

RICKS: Thank you.

End of Tape 2, Side B

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Milford Richey

Milford Richey

Interview Date: Tuesday March 22, 1994
Interview Location: Phoenix, AZ
Interviewer: Archer Taylor
Collection: Archer Taylor Technical Collection
Note: Audio Only

TAYLOR: We are recording an interview with Milford Richey. To make sure the transcriber gets it correct, it is Richey. We are recording in his office in Phoenix on the 22nd of March, a beautiful day outside in Arizona as you would expect. Milford, I am going to start by asking you to tell us something about your early life, your childhood, your parents, and where you went to school, and so on and so forth.

RICHEY: I was born in a little town called St. Johns, Arizona in eastern Arizona, up in the mountains. I had a rather unique situation in that I am not only a native of Arizona but both my parents were born in Arizona. My grandfather drove an ox team in the state of Arizona many years ago. In the small town of St. Johns, we were educated and lived. I didn't realize it until many years later when somebody told me that I was poor. I didn't know how poor I was, but during The Depression, we milked cows and raised chickens and sold eggs and cream to get money, but it was a very happy time in my life and I really appreciate my parents and all they did for me.

TAYLOR: Are your parents still living?

RICHEY: No, they're both dead.

TAYLOR: OK.

RICHEY: I graduated from high school in St. Johns. I went into the military. A friend of mine said, "You know, I've got to go take this test to get into the navy." And he said, "I don't want to do it alone. Come take it with me." So I went down and took it. It was the EDDY test and they accepted us and then we went to a navy electronics school for a year and I had the privilege of graduating #1 in the class. From there I went to ASU -- and this was before they had their accredited engineering department -- but I graduated from their engineering area before it was a bachelor of science in electronics. I had just graduated from ASU and I went to work. While I was attending ASU, I was working nights at an AM radio station transmitter called KOOL. While I was there...

TAYLOR: This was while you were in school?

RICHEY: Yes, while I was in school, still a student. While I was there... The owners... Let me tell this story. In Phoenix, there was first channel 5 KPHO and there was NBC, channel 12 -- which actually was Mesa -- and they got their two licenses first. And then there were 2 radio stations, KOOL and KOY, -- very strong local radio stations -- fighting over channel 10. They finally got together and decided they would jointly own the venture.

TAYLOR: I recall that.

RICHEY: They built the station and I was fortunate enough to be chosen to go and build the transmitter. Another man and I, an engineer from Dumont, equipment, we built the transmitter up on South Mountain.

TAYLOR: Start from scratch? Built the components and everything?

RICHEY: Yes, from scratch. We had a lot of things from Dumont but we did a lot of physical work. It was interesting. About a year later I was chief engineer of channel 0 and the interesting thing to me was that of the department I ran, I was the youngest of them all.

TAYLOR: How old were you? What year was this.

RICHEY: This was about 1954 and I was born in 1928 so that would make me about 26...?

TAYLOR: Yeah, sounds like it.

RICHEY: So, I was there for a few years and the general manager was wrong and I told him he was wrong in a loud voice in the wrong place and I got fired. He was right, he was right to fire me. And not long after, a man named Bruce Merrill hired me. He was doing some microwave work and I had enough microwave experience at the TV station to... I had more experience than most people in microwave at that time. And so I started working with him with microwave.

TAYLOR: Was that about 1956?

RICHEY: It was actually 1957.

TAYLOR: 1957. And Earl Hickman had left... 1've got that here somewhere, but it was about the time that Earl went to Kaiser...

RICHEY: Earl was there for about a year while I was there.

TAYLOR: He was.

RICHEY: Yes. And during that year when we developed the first so called AmecoTran, which was the first modulator for cable television that used the 4.5 MHz unit carrier sound system.

TAYLOR: Yes, he's described that in his interview.

RICHEY: Yeah, that was great fun. But I spent most of my early time there working with microwave systems because we were using common carrier frequencies at that time to disperse TV pictures around primarily the state of Arizona and part of New Mexico. The equipment in those days was not worth much, the microwave equipment wasn't.

TAYLOR: This was not ATR at that time.

RICHEY: It was... No at that time the equipment was in Antennavision's name. But soon after, it was made to American Television Relay, which was the ATR. OK. I guess I can go ahead with that particular story. We started working in the Imperial Valley to develop those systems and one of the problems was pictures. So we needed the Los Angeles independents to make it work. So I engineered a microwave system to go from... We started at Toro Peak and because of propagation problems we moved it on west to... near the marine base. And... But at the time we were having problems with modulating/remodulating microwave systems because of the deterioration of quality. And I had been working with some people who were talking about IF heterodyne. This was about the time that AT&T was developing their system for long haul using the same type of modulation. So I went to Collins Radio in Dallas and asked them if they could help us. And they manufactured an IF heterodyne system for long-haul equipment for video. And it turned out to be fantastic because we went from near Palm Springs through Imperial Valley, Yuma, Phoenix, Globe, Safford, Silver City into New Mexico, into El Paso, up through Albuquerque and into Southern Colorado. It was quite an extensive microwave system. The equipment is still there today. Bruce Merrill later sold that system to Bob Magness' microwave group called Western Microwave, and they then sold to MCI. So MCI has the routes now and they've expanded it through other things... But they're still hauling some video. But that was an interesting part, I enjoyed it. Now, back to the realities of cable TV. That was a minor, not a minor, a side part because in reality that took the place of the satellite programming that we have today. There were a lot of people interested in it and several cable systems were built successfully because of it.

TAYLOR: Over what period of time was that system built up?

RICHEY: That system took several years to build. We finally finished it in about 1967. I shouldn't say we finished it. Most of it was finished about that time because it was expanded beyond that after that. And many other routes were added later. I was with Bruce up through 1967. It was interesting...After I joined Bruce at Ameco, which originally was Antennavision -- that was the cable operations company -- and the manufacturing was called Antennavision Manufacturing and Engineering Co. and the letters spelled AMECO. We had been there a short time and Earl Hickman left and so I was the remaining engineer at the time. And so at that particular time, we were manufacturing a low band, channel 2 through 6, tube type amplifier, and that was all.

TAYLOR: And that was broadband?

RICHEY: That was broadband. We originally had some strip amps, had 2, 4, and 6 strip amps which we made. Earl designed the amplifier and did an excellent job with that one.

TAYLOR: The broadband?

RICHEY: The broadband, lowband amplifier. It was a good unit. But we were a little behind the time because the SKI distributed amplifier was doing the broadband 12 channels and it was an excellent amplifier, a beautiful design. So we needed to get into broadband frequency. So, Bruce Merrill used to come back quite often when everybody else had left and I'd be back at my desk and he'd come back and sit and say, "What's happening?" And we'd discuss things. Bruce was a good help in that regard. He's a wise man. So we were sitting there one day and I said, "You know, it looks to me like we've got two choices. We either follow SKL's lead to make a distributed amplifier. Or, we could deal with these new things called transistors." But I hastened to tell him that I knew nothing about transistors, because they had come long after I got out of school. And after discussing it, we decided that well, following with a look alike wouldn't be very helpful, and if we could, we ought to try the transistors. Because a couple of people had tried the transistors and they weren't very successful. So we had a very heavy advantage in that regard because Motorola Semiconductor Division was just getting going here in Phoenix. So we got some transistors. These were the Mesa series that Motorola was very proud of and had lots of high frequency capability -- they thought. But it was far superior to anything that had been developed before. But its ft was 50 MHz. The highest useful gain was 30 MHz. And so we got some of those transistors and started working with them. And we developed a system called emitter tuning, which had never been done before. With emitter tuning, we could complement transistors that had any gain at any high frequency. And we found out that some of these Motorola devices that supposedly could not have any gain above 50 MHz, had gain up as high as 300 MHz, and quite a bit of it, but not all of them. And so I contacted Motorola and said, "You know, you've got some devices here that have got some pretty good high frequency stuff and they couldn't believe it. They said, "Those aren't capable of that." And so we brought them over to our operation there on Osborn Road and showed them. They just couldn't believe it. So, they said, "Well, let's see what we can do to make these things work." So I showed them that we had set up a test bench, just to test transistors. And I put in a square wave modulation on all channels except one of the 12 channels. And I had a lady who would plug the transistors in. She had a monitor there, and we had the levels all set. If she could see intermode, it was a bad transistor. If she could see no intermode, it was a good one. It was that simple, that simple a test. It was a go/no-go test. And so Motorola said, "Well, bring that over and set one up in our place. We'll test them and send you the good ones." So we drew a diagram of how to do it and told them the levels. About two weeks later they said, "Come over and help us." So we went over and they had really messed it up. The guy finally said, "Look, let's do it this easy way." Every week they had a barrel -- about a 30 gallon barrel -- full of transistors that came off their Mesa line. We were interested in two different transistors: one was a low powered transistor, and one was a stud-mounted transistor. And they said, "OK." Then they would send us a barrel of each about once a week. We would put them through our test bench over there and plug them in. The bad ones, we would put back in another barrel. The good ones we kept in another one and sent those back...

TAYLOR: Do you remember what kind of yield you were getting?

RICHEY: That's a good story because the yield some days would be 1% maybe 2 % and some days it would be 10-15 percent. So I went back to Motorola and said, "This batch is good. Whatever you are doing on this particular batch is right." And then I'd say, "This batch over here was horrible. Now tell me what's the difference between them." And they looked and looked and looked and finally the guy -- I wish I could remember his name -- came to me and said, "You know, we cannot determine what the difference is between those two batches. All I can think of is some dumb thing like, maybe the night guy urinates in the wrong place." But we finally found out later what it was. When they cut the chips up, if their saw was sharp, the yield was practically none. But when the saw was dull, and left a little serrated edge on the edge of the semiconductor, it had fantastic high frequency capabilities. And the duller the saw, the greater the high frequency. Texas instruments... I think we told them about it -- I don't remember how they got it. But they then took that and designed it into their transistors. And that was the beginning, and then everybody got transistors and the whole market took off in the development of transistor devices, because they all had good high frequency response and good capability. But that's the story of the development of transistors for the cable industry.

TAYLOR: Very interesting. Can we put some dates in here. This was before you left, of course. Maybe the early 60's.

RICHEY: This was actually '59, 1958-59. Because by 1960 we had developed several complete lines of transistorized equipment and I ended up with all the responsibilities of AMECO except for the sales force and collecting the money. We had 7 buildings going at that time and those that were doing production, we were running three shifts 24 hours a day. It was interesting.

TAYLOR: Let me ask you a question here about the.. .see I was up in Montana until about '65, and it was sometime either just after I left or just before, that Irving Kahn had his fiasco in Great Falls.

RICHEY: That's another story that needs to be added into this system, because we found the transistors and we knew we could get gain but I knew nothing about transistor circuitry and none of my people that worked for me knew anything about transistor circuitry. So I went to Bruce and said, "I've got to have somebody who knows something about transistors." So we discussed it, and Bruce had a friend who was some kind of a wheel over at Cal Tech. So we contacted Cal Tech and said, "We need your best man who has the greatest knowledge of transistorized circuits and we want to hire him." And so, he was in their graduate program. But we hired him and he came over and designed us an amplifier, a broadband cable TV amplifier, for...

TAYLOR: Do you remember his name?

RICHEY: You know I just can't remember his name. I've been trying for weeks now to remember that guy's name.

TAYLOR: And he was just briefly with AMECO then?

RICHEY: He was with AMECO for about 6 months. During that time he designed a line amplifier. It had ten stages of gain. We powered it by DC power so we had big DC power supplies and would regulate the voltage in each amplifier. And so Irving Kahn was kind enough to ask us to try it up in Great Falls. So we took about 10 amplifiers up there -- trunk amplifiers primarily -- and took them up. We had their trunk system and we took it down – not the trunk, just the active devices -- and replaced them with the transistorized equipment. And it was so cold up in Great Falls. The high temperature, while were there that week putting this equipment in, got up to 32 degrees. There was a thermometer on the bank building there. It got up to 32 degrees at midnight one night -- one of those Chinook winds had come through -- oh it was gorgeous. Because before that... We had no test equipment that didn't require AC powering. Our signal meters had to have AC power, so we had a little Kohler putt-putt, and it ran all the time on the back of the truck. The only way to get our hands warm was to go over... You didn't just hover around it, you grabbed hold of the muffler to get them warm. The muffler wasn't very warm. But anyway, that was interesting. Well, we put the amplifiers in and got about a 10 amplifier cascade. And when we got down to the office. And we had something there... We had two things. We had noise and hum. But we didn't have hardly any pictures. And so, we pulled them [the amplifiers] all out, put the other equipment back in. We called Irving Kahn and told him it was a failure. So I took the equipment and went back to Phoenix and the next morning Bruce came in and said, well, didn't go very well, did it? I said, "No, but we learned a lot.' and he said, "Irving Kahn thinks so too." Because he had called Bruce that morning and said, "Failure is just the beginning, so fix it and come back." And I had always appreciated Irving Kahn for that.

TAYLOR: Irving was an interesting guy.

RICHEY: Yes. He had a lot of foresight.

TAYLOR: Yes he did.

RICHEY: A lot of people, I don't think, have given him adequate appreciation. But the two things we learned is that our engineer -- and I sure wish I could think of his name from Cal Tech -- had forgotten the old thing that if the gain of the stage isn't more than the noise figure of the preceding one, all you're amplifying is noise in each stage. You've got to have 20dB in there. Anyway, we realized immediately what our problems were. That was the problem with the amplifier. We had too many stages and not enough gain and he had not realized how much we knew about emitter tuning and he had not accepted that. He was too new for it. But we knew it worked, so I let him go. But the one thing he did is that he taught me and my staff about transistors. And so then we started designing and Floyd Stewart was a genius with these devices and he came up with a two-stage design that had 20dB gain out of two transistors.

TAYLOR: Now, was Floyd Stewart a member of your staff?

RICHEY: He was a member of our staff, one of our technicians at the time.

TAYLOR: But he had not had previous transistor training.

RICHEY: He had no technical training when he started with us.

TAYLOR: No technical.

RICHEY: No, but he was a very good man and good, and he thought well. He was a very good man. And Ray Stouffer was in the middle of this too. He and Ray and I were the nucleus of our engineering department at that time.

TAYLOR: Yeah, I remember Ray from...

RICHEY: And, Ray would give Floyd the stability of knowledge and background and history and anyway, it was a good combination. I remember we went to the California show in Palm Springs. It was the beginning of the Western Show. And at that Western Show we had this little transistor amplifier. And because we were in a hurry, we had mounted it in a tap box -- a blister can tap box -- and it was made to mount directly on a pole. And in order to keep the linemen from using it as his place to stand, we had a decal on the top that said "NO-STEP". And consequently, the amplifier became known as the "NO-STEP AMPLIFIER". But that was the beginning of this, and it was very accepted and it did a good a job -- had good intermode, very surprising, a marvelous amplifier.

TAYLOR: Do you remember what the year of the test in Great Falls was?

RICHEY: It had to be the winter of '59 and '60, I believe. I wish I had kept a diary but I didn't.

TAYLOR: Irving...

RICHEY: It was either '59 or '60, because we developed a whole series...We were in Santa Barbara in 1961 with our new series of equipment.

TAYLOR: The first time that Irving turned up at the NCTA was I think in Miami in 1960.

RICHEY: OK, I'm not positive, but I could be off two years. But I do remember that we were in Santa Barbara in 1961 with a full new series of trunk equipment and distribution equipment. Because Harry Butcher was the man in Santa Barbara who wanted the solid state equipment design put into his system there in Santa Barbara. But I'm getting ahead of myself. So, we took the "No-Step" and then from that... About that time a young man named Don Nelson joined us. Don was very good with circuitry also. He was the one that was primarily responsible for the interstage gain with the diodes that would give us variable gain to be able to give us AGC control. Don was one of the early people who later on, at Scientific Atlanta, took advantage of it and used the reverse feedback to cancel out your unwanted devices. Don Nelson built an amplifier about that time at AMECO.

TAYLOR: The feed forward design?

RICHEY: Yes, the feed forward design. But the problem at that time was that we could not find transistors constant enough to be able to design something to be able to plug everything into. Every unit had to be special selected and then tuned for it. He was just ahead of his time. It was a beautiful circuit and boy did it have gain. It was marvelous. We had fun in those days. We worked hard. I can remember at AMECO, we used to have picnics for employees. We had an annual picnic and we would get one of the parks here in the valley and set it aside. Then we would invite all the employees out and have a big lunch and play a softball game and got everybody involved.

TAYLOR: How many employees did you have at that time?

RICHEY: In the early times, we probably had about 20-25 total, which included production and everything, but later on we had about 200-300 when we were running the shifts.

TAYLOR: I'm sure you knew Paul Merrill, Bruce's older brother. Earl was certainly very fond of Paul and Paul and Earl were really the beginning of the thing apparently.

RICHEY: Yes, and as a matter of fact, it was a very important time in the history of AMECO because Paul, of the seven owners, was the leader. And about the time we started development of the modulator, Paul came in -- they had a Board of Directors meeting -- and he said, "I'm tired of taking all the profit out of the cable operations and putting it into this dumb thing called AMECO." He said, "I'm tired of it, and I've got the four votes to shut down AMECO." And so when I left work that day, the word was that the Board was going to vote that night.

TAYLOR: When was this?

RICHEY: This was in '57, late '57, early '58.

TAYLOR: That was after you had come/

RICHEY: Just after I had been there, yes. Earl was still there. Earl was one of the members of the Board of Directors. He was an owner.

TAYLOR: OK. Earl indicated that the reason he went to Kaiser was that he felt they didn't have enough money to pay his salary and so he said he would give them a year's notice and help the guy who came in, which happened to be you.

RICHEY: Well, I think there's a little more to the story than that. Earl was with Paul on the vote. So I was surprised the next morning when I came to work and they said, "Work is normal." Apparently, what happened the previous night was that Bruce had bought his brother out, and so he then had the four votes. I don't know, Earl may have felt a problem being...

TAYLOR: Bruce was one of the seven...

RICHEY: Bruce was one of the seven owners.

TAYLOR: At the very first...

RICHEY: At the very first and Bruce had two brothers, I think they were Hall brothers, I'm not sure of these names, who were

TAYLOR: Earl is... But I don't know them either.

RICHEY: And then there was Bruce and a guy from Globe... Anyway, Bruce changed the numbers on the Board and soon after that he bought all the rest of them out so he was the sole owner of AMECO.

TAYLOR: And that was when Earl decided to leave.

RICHEY: Earl left, yes. I have no idea exactly why Earl left, but it was during the period of change. Because of that we went forward. I've got things out of chronological order here. I hope you can...

TAYLOR: Did you know of any antagonism between Earl and Bruce?

RICHEY: Not that I'm aware of. They were good, friendly competitors, in a sense.

TAYLOR: You mean with Kaiser, when Kaiser got into the Kaiser/Cox.

RICHEY: We, as a matter of fact, we talked together quite often during that time. They went a different way than we did, later on. But it was good. About that time, well after we got the solid state equipment built, we were... Do you want me to tell the other stories that go along with this?

TAYLOR: Sure, by all means.

RICHEY: OK. Bruce had bid on the... They were about to start to build Glen Canyon dam. And in that period of time, when they started that, there was a radio station in Flagstaff -- an AM radio station, it was daytime only, and it was low power. And in Page, you could just barely get a noisy signal during the day. At night there was nothing. With a TV antenna, you might get a little skip once in a while, but there was no entertainment in Page and it's at least a 3-hour drive to Flagstaff.

TAYLOR: Is this a radio station or a television?

RICHEY: No, this is a radio station. And so entertainment was a problem in Page. So the Bureau of Reclamation was pushing to get somebody interested in cable TV, and Bruce was interested in it. And there was another -- I'm not sure who it was -- there was another group that was interested also, and we had a time frame to get the system built and get it in operation. We had 3 weeks. During that 3 week time period, I had to build a microwave system from Hutch Mountain with two repeaters on the Navaho Indian Reservation that were out in the middle of nowhere. One was on the top of a ridge in the middle of a sand dune area and another was on top of a mountain that looked like a battle ship and up on the cliffs. I had to build a microwave system in 3 weeks. I think we had 3 or 4 four-wheel drive pickups and we took them up there and started working. We took little pre-fab buildings out and took a bunch of ties we got and laid them down. Then we'd take plywood sheets and lay them on top of the ties and then we built a pre-fab metal building over that. Then we had to build two buildings, one for the power plant and one for the equipment. Then we would set up antennas. We just drilled holes in the rock and put the pipe in and poured liquid sulfur around to seal them and brace them in there and put them up. I had a crew of people and we were living at Cedar Ridge.--.1'll think of the name -- on the Indian Reservation up there -- the little building out behind the trading post. There was one big room and one little room and we had a guy by the name of Alex Brauner who was helping us. Alex lost his sense of smell, he couldn't smell at all but he was very good with mechanical things. He was the guy who put up our metal things and he was a good welder and everything and so he was good and handy to have around. He wore big old boots laced up almost to his knee. We would all go back there and be just fatigued. We had a bunch of bunk beds in this big room and Alex would take off his boots. And my gosh! It was like somebody brought a skunk in! It was horrible. And I said, "Alex, don't you do something about those shoes? At least set the shoes outside!" So the first night, we set his boots outside. The second night we moved him outside. But Alex was quite a guy and one of the things that was interesting about that... But, another thing about that is that when we'd drive with those pickups, we had a lot of trouble with getting them stuck in the sand. And so when I got up there, I went over to the pickup and let the tire pressure down to about 15 pounds in all the tires, and we just drove right through the sand. Well the problem is that we couldn't drive them on the highway like that. We had the equipment and we had arranged to get some Motorola microwave equipment and we got it up there and then we started hauling it to these sites primarily on the Indian reservations to get them going. And I remember Bud Winnery said one day, "You know, my pants got a hole in them. I've got to go home and get me some new pants." I said, "Bud, you don't have any holes in the seat of your pants." He said, "It's not the seat of the pants. It's up above. It's right below the belt. We sit there and bounce on these pickups all day and it wears the back of my pants off." So we had some unique things happen there. But we got those things built. Then we had to have propane. So we contracted a guy in Flagstaff and he agreed to take them up there. But he couldn't get that truck up that hill. So on the Preston-Mesa side, we rented a Kat and pushed one vehicle and towed the other. One vehicle had the tanks and the other was full of propane and we got them up to the top. But you know, for some reason he refused to fill those tanks again!

TAYLOR: Laughing. I wonder why?

RICHEY: I wonder why. Of course, we found out later on that we would just time it so that after a rain -- whenever it rained up in that country – we'd call that guy and he'd run out with a truck and drive right to the site, because the sand was wet. But then on Jacks Peak, we built the power station down on the flat level ground. And we took this same Kat with a flat bed trailer, and it was the only thing we could drive to the top of the mountain with. And we drove up the mountain with all the equipment and built it up there and turned it on. Then we got to Page -- and I wish I could remember the man from the Bureau of Reclamation. I said, "Where are we going to build this?" He took me out to the south side of Page and he drew a line in the sand and said, "See that line right there, that's the boundary of the Bureau of Reclamation. On the south side of that boundary is the Indian reservation on the north side of it is the Bureau of Reclamation land." And he had two great big timbers, about 12" square by 15' long, and he said, "You put your building on top of those skids." So we built a building on top of those skids. Then I said, "Why, why don't we just build a permanent building?" "Because," he said, "Today the injunction is against me, so we will build it on the Indian reservation. Tomorrow, the injunction will be on the Indian reservation, so we'll just slide it over to other side of the line." So we built the building there, and started turning equipment on. I remember it was one Saturday, late afternoon, and we were starting to get pictures. We had aligned all the paths and had guys working on all three sites. And we had them all lined up with the pictures coming through, and we got one channel on. There were people all over us. They were coming in looking through the door and looking at pictures over our shoulders. And I finally said, "Do you have a TV set?" He said, "Sure." I said, "Well you go get it and sit it outside and I'll run a line out there, and hook it up to that TV set." So I did it, and there were people watching that TV set out there. We got the second channel hooked up. Another guy said, "I'll go get mine!" So the first thing you know is, we had 2 or 3 TV sets sitting outside, all on different channels and people sitting around them. Then it started to rain. They didn't take their TV sets and go home. They got in their cars and watched through the windows. They were that hungry for television.

TAYLOR: Yeah, I know. We had some similar experiences in Montana.

RICHEY: So, we got the system built and we got it built a day early. We had 21 days and we built it in 20 days and that was quite a feat. In the meantime, we had a crew stringing cable, actually in town, but we didn't have to have much cable strung up to qualify. But we had it on and it worked. We finally built it on down across the trailer park. It was a huge trailer park. APS had built poles and the trailers then were parked underneath the pole line, so that the power line ran directly across the top of the trailers, and then they'd go up and drop a line down to power each trailer. So we built our cable system right underneath the power line. And so our cable was running right across the tops of the trailers. At that time we were using flat braid cable -- that was the big thing. So it wasn't long till those construction people found out that they could take their TV antenna... and actually they got some pictures with just the regular TV antenna up on top the trailers. But they found out they got real good pictures when they stuck it up right underneath our cable. The next thing you know, we don't have anybody wanting TV. It was all free. So I had a problem. I had been using some 50-ohm aluminum cable, made by Rome Cable in New York. I'd been using some two-way stuff, 50 ohms. So I went back to Rome and talked to Jack Woods and said, "I need some 75-ohm cable. I need – I've forgotten the exact amount – about 2000-3 000 feet of it. Can you make me some 75-ohm cable?" He said, "Sure, I can make it for you." So he made us several reels of it and we took it to Page. Now, we had a problem, I had aluminum cable, but I had no connectors. Now at that time Jim, our purchasing agent... on weekends he drove race-cars. He had a friend who was a butcher, who liked to tinker in his garage. And we needed connectors to go on these ½-inch aluminum cables we had. So Jim said, "Hey, automotive copper connectors will fit the outside of that, so we can just put a swedge fit on those with a little compression ring. So I said, "Fine, that's great. Now what are we going to do for the center conductor?" Jim said, "Well, I got a good idea." Teflon was just new at that time, but you could machine Teflon, one of the first products you could machine. So, he said, "I have a friend that has a lathe." So he went with the friend and they took a small tube, a copper tube, just barely bigger than the size of the center conductor and they split it on both ends. Then they drilled the hole through center of the piece of Teflon and pushed it through. Then they put the Teflon in the lathe and machined it down till it was just a bit bigger than that brass 1/2 inch fitting. Then they took it over to a drill press, and with the drill press, forced it into there, and we had our connector. So, that guy's name, who was the butcher in his garage, was named Earl Gilbert. Hence, the beginning of Gilbert Connectors.

TAYLOR: Oh, I'll be darned.

RICHEY: Now, originally the Gilbert Connectors, he was supposed to be working for

AMECO.

End of TAPE 1, SIDE A

START TAPE 1, SIDE B

TAYLOR: OK, this is side B of Tape 1. We ran out in the middle of a talk about connectors. I was going to ask, early on, AMECO used PL259 connectors, which is a terrible connector, then Earl or somebody modified that to make up the AMECO connector. Did that happen on your watch, or was that earlier or later?

RICHEY: No, that was during my time. We realized that we had a problem with match of connectors. About that time, we found that -- 1 don't remember which -- one of the test equipment manufacture had built a TDR unit at high enough frequency that we could measure that small an area. So we bought one so that we could look at the connectors. Because we knew we had a problem. So with that piece of test equipment, we were able to change the design of those connectors to make it a 75- ohm device, because it was actually a 50-ohm device.

TAYLOR: Now, was that starting from Gilbert's idea, or from the PL259.

RICHEY: Well, we did it at AMECO, but Earl used it. I don't want to point numbers or places...It was a joint problem and it worked. Nobody was taking something from anybody else. It was fine.

TAYLOR: Earl Gilbert was not an employee at AMECO?

RICHEY: No. He was not.

TAYLOR: He was somebody that helped you out.

RICHEY: Apparently, as it worked out, he turned out to be a subcontractor. OK.

TAYLOR: But, when he first put that first connector together, what was his business then?

RICHEY: He was a butcher.

TAYLOR: A butcher.

Milord: Yes, and he liked to tinker in his garage and hence, he and Jim, our purchasing agent had become friends and he made all the special things for Jim's race cars in his garage.

TAYLOR: Jim, who was that?

RICHEY: Oh, you shouldn't ask so fast.

TAYLOR: Earl had talked about a fellow who was killed in a race-car, and I know I can't find it quickly...

RICHEY: Yes that's the man. I can't think of his name. He had taken his transmission out and physically put it in backwards, so he could have more power, and during the race he forgot it was in backwards. And when he shifted to 3rd, he was actually down-shifting instead of up-shifting. The transmission locked up and he spun, and it killed him. It was a sad thing. He was a brilliant young man.

TAYLOR: I see a name Wilson here. Could that have been him...

RICHEY: No.

TAYLOR: Oh, that's Roger Wilson. I know Roger.

RICHEY: Roger Wilson...came later. There were a lot of people that came later that helped and I'm terrible with names and the older I get the worse I am.

TAYLOR: Well that's true for all of us I think. I guess it's part of the...

RICHEY: We had lots of good help. We had Rheinfelder who contributed in this era. Ed Harmon, Wilson...and I'm forgetting names. I shouldn't start...

TAYLOR: Was this on your watch... when you were there?

RICHEY: Oh yes.

TAYLOR: Rheinfelder came over from Motorola, right.

RICHEY: Yes. Now I'm going to tell you a story about Rheinfelder and I think you might want to cut this out. OK.

TAYLOR: Well, I'll stop it if you want me to.

RICHEY: Maybe, you better stop it.

TAYLOR: This is about Rheinfelder's book?

RICHEY: No, I don't want to talk about Rheinfelder's book. This is before that. The cable TV industry is getting real hot and, I can't remember the publishing company, but they sent a man to see me. Well, they interviewed me and said, "We're going to write a book." And he says, "You are going to be the author and I am going to be the ghost-writer." He had it all pretty well done, but it needed to be reviewed and I was so busy I didn't have time to review it. And so the book was never published. But that would have been a good book because at that time we were sitting on a lot of stuff and I wouldn't let those non-truths get out because Rheinfelder... see I left before Rheinfelder....no just about...no I think Rheinfelder published that just after I left. I'm not sure.

TAYLOR: Well, see the Charleston thing was in 1968 I believe, '67-'68, and Earl was there at that time.

RICHEY: Yeah, I left in '67. Let me go over one other thing. One of the things that we knew is that cable was sensitive to temperature and we knew it was a problem. And we had a theoretical thing with what cable did. And so we knew we had to design amplifiers that compensated for the cable. So I built... took the back end of our lab and insulated it and put a big air conditioning unit in it, and a big heating unit, then put dual windows in it so we could see it and built enough cable in there to run a 32 amplifier cascade. And then we'd start cycling this thing and then we had test leads coming out so we could monitor the system. The one problem... and we thought we had the problem solved, because we could run that thing up and down, cycle it back and forth in a day's time. And, hey, our equipment was working beautifully for it. But the one thing we didn't have is a temperature sensor. Because the cable was on reels and I could not sense the temperature of the cable at the center of the inner reels. So consequently, our information was in error because the center never changed temperature very much. Finally, over a long, long period of time, when we would sit in there hot for a week, or cold for week, then we began to see the problems. But at first we had difficulties with our amplifiers and our AGC in the field because of it. Because had designed to what we thought were real conditions. But it turned out they were unreal, because our temperature thing was not getting it cold enough.

TAYLOR: Yeah, we used that chamber when were testing the Charleston equipment... put in a 10 amplifier cascade and ran it through its paces, waited all night for the cool cycle to get it down to temperature. But I worried about just that problem. I worried about how do we know what's happening in the center conductor... and I made the suggestion that I don't if anybody every did anything about it, but measure the resistance of the copper...

RICHEY: Which would have told us something about it...

TAYLOR: Which would have told us something about its temperature and I've made the suggestion to 2 or 3 other people and nobody ever followed through on it...to my knowledge.

RICHEY: Well, the one mistake we made is instead of putting just one piece of cable on one reel we had at least 3 or 4 pieces of cable on one reel. So we really had lots of cable on a reel and it was not real because the one that was on the outside... because we had it rolled up together here, with another on the side of it, and another on the side of it. But still the inside one probably never got cool or hot. So it was a mistake.

TAYLOR: Cute little story though. I can tell you at that time when we were running though those tests, it was just before Christmas, and Larry Janes was the chief technician -- or rather chief engineer -- for the Charleston system and he went out to Phoenix with me to go through these chamber tests. We came out one morning about 6 am in the morning, and there was ice on the parking apron. Larry was just absolutely flabbergasted. He said this was the first time he had ever been to Phoenix or to Arizona. He was expecting at Christmas time it would be nice and warm and everything, and here is ice on the paving. He couldn't believe it.

RICHEY: Yeah, once in a while we get some cold weather here.

TAYLOR: I saw him a few years ago and he was still flabbergasted about that experience.

RICHEY: You know, those were interesting times and I can remember that test equipment was such a terrible problem to us and I tried hard to get some of the test equipment people to work with us. But they just couldn't understand the problems.

TAYLOR: They didn't believe we were for real...

RICHEY: That was absolutely true.

TAYLOR: Ken Simons, really his love was test equipment and he went at it and I think he made some pretty good contributions.

RICHEY: He made some very good contributions. He's a good man. But you know, let me talk about another aspect. About the time that -- after the episode in Page where we finally solved the problem. Once we put that aluminum cable up there -- hey, everybody hooked back up to cable. So that worked real fine. So about that time, I went back to Rome and visited Jack -- I can't think of his last name...

TAYLOR: ...Woods?

RICHEY: Jack Woods. I said, "Jack, we need to build a cable manufacturing plant in Phoenix.' He says, "Phoenix is the right place to put it." Because one of the problems in making the foam dielectric, at that time, was that the by-product was moisture, and they had to put it in ovens to bake the moisture out. He said, "If we did that in Phoenix we wouldn't have to bake it, we'd just sit it out in the sun." And so I said, "Let's do it." We put together a package that would make cable. But at the same time, knowing that -- that's a lot of money to put a cable plant in -- that the cable business might not be that good. So we actually designed the plant to make housewire cable.

TAYLOR: Oh, really?

RICHEY: And we would make aluminum cable as a byproduct. If the aluminum cable industry made it, fine, we would make aluminum cable.

TAYLOR: Jack brought Sid Mills in with him as I recall.

RICHEY: Absolutely. Sid worked with him in Rome and he brought him to Phoenix to run the plant. Then Sid went from there to Kaiser and made their cable operation here in town.

TAYLOR: Then Systems Wire acquired the plant. Was Sid with that?

RICHEY: I was thinking..

TAYLOR: I know Jack Woods was.

RICHEY: I can't remember the exact correlation with how they went, but Jack broke off with Bruce and then he got his own plant in East Phoenix near the river bed.

TAYLOR: There was one interesting thing about the Ameco Cable plant that I pursued a bit, but I could never get an answer to it. I had noticed that Rome Cable...every time they put out a data sheet, there would be a different attenuation for the 3/4 inch size from what others had. The 1/2 inch and the 412 tracked very closely, but the 3/4 size... I don't know if it was better or worse, but it was a different attenuation from what Times and Superior were doing. But when I was out here to visit the plant in Phoenix, your plant, Ameco's plant, I talked to Jack about that. And we couldn't come to any conclusion and he didn't have any conclusion. But the same thing happened with the Ameco cable, it just followed the Rome figures. But of course they were the same people and the same techniques and everything. So I never did determine whether that was a real difference or just some fluke of measurement.

RICHEY: You know what I think it was, in looking back, was that we finally found that in order to make good cable we had to mill the center conductor to make sure it was the same diameter all the way through. And I think that was the problem. It was the copper from the center conductor was not maintaining the same diameter. And so consequently it was causing problems because once we started milling it...

TAYLOR: That's saying then that the Rome/Ameco Cable was more nearly correct and the others were off because they weren't having reliable center conductors.

RICHEY: I think that's why.

TAYLOR: That's a good hypothesis anyway.

RICHEY: When we got to the copper clad aluminum, the aluminum was processed before the copper was put on it, so then we had perfect center conductor all around which was a good process. But I've been involved in getting things going, the amplifier, cable, microwave. I've had a good time.

TAYLOR: That's great. I started talking to Earl about -- I don't know how the conversation got started -- but open wire line was #1 and he mentioned Scottie Gray. Did you know Scottie Gray?

RICHEY: No

TAYLOR: I guess that's before your time there. I had...Scottie Gray wanted to hire me one time and I listened to what he was saying and it just sounded like bunkem, and I didn't want to get mixed up with him. That was the time the Pat Weaver was doing Pay TV in Los Angeles and got blown out of the tub by a referendum. The people didn't want it. But, I then got to G-line, which is another thing I always thought Earl had a lot to do with. But he says, "No, talk to RICHEY: Richey."

RICHEY: Yeah, I got that.

TAYLOR: So let's talk about G-line and open wire line.

RICHEY: OK. Well, the open wire line... There was quite a bit of it that we had in some of the systems. You know the problem with open wire line was just those spacers wore the cable in two, and changed the impedance, and you had noise, and it was a problem. When it was new, it worked pretty good. When it was old, it was terrible. The attenuation always increased, and that's why. And it should have. So, I can't really recall how I got started in the G-line but I took general theory, and somebody said, "Well G-line ought to work more like a radiator with a flat surface and a center line going out." And I said, No, because that's ridiculous. We got to go... Because the G-line is really an infinite impedance and we've got to transform it back to a 75-ohm impedance. And the only way you could do that was some kind of a cone shape device." So I built the cone shaped feed horn for the G-line...

TAYLOR: Did you have to deal with Hefner, the patent attorney?

RICHEY: Not much, I hid away from that. But there was a problem there.

TAYLOR: He was a tough guy to deal with.

RICHEY: Yeah, but we built G-line and it worked very well. And we used nylon rope to suspend it from the cross arms on the thing, and if you built on its own line...

TAYLOR: ...slow bends...

RICHEY: Absolutely... transitions. And it worked very well. One of our most successful lines that we ever built was... During that time there was a big radar base about 5-10 miles west of Winslow. And there was nothing out there. But technicians out there, on their off-time wanted to be able to watch some television. So from Winslow we built a G-line out there. It was perfect condition for G-line. It was away from everything, relatively straight line and that line worked beautifully, for years. And they finally dismantled the radar base, and the line was torn down...

TAYLOR: One of my associates Bruce Hamilton, built a line in Helena, MT from the continental divide into Helena. We found that after it was running for a little while that every launcher on the thing had Yagi antennas pointing into it.

RICHEY: It worked well.

TAYLOR: It worked well.

RICHEY: You know the G-line had a terrible lightning problem. Oh man, it drew lightning like mad because it was long and high impedance and ungrounded. So what I did was put a 6 dB pad on the input and output of every unit and when lightning hit, it would blow the pad. Fine. You go out and throw it away and put another one in, because if you didn't do that, it would blow out everything.

TAYLOR: A 6 dB fuse.

RICHEY: Yes, that's what it was, a 6 dB fuse. But I took that same philosophy... We had built a cable system in Show Low, and Pine Top was about 5-10 miles away. And there was a phone line running up there along the road. We decided to try a G-line up there, because it was too long a distance for cable. So we built a G-line up there. I was up there and it wouldn't work. We didn't get anything through it and we were sitting there with the test equipment disgusted. There was a barb wire fence relatively, below it but quite some distance from it, and I drop the test lead down and it happened to hit on the fence. Now this was a metal post fence with barb wire attached to it. It was grounded. We had more signal in the top two wires of the barb wire fence than we had on the G-line. The impedance was too great, the field was too large to go on those physical conditions. And then we put in an FM modulated system on those lines and that was the first FM modulated system used for cable TV.

TAYLOR: Now which line was this again?

RICHEY: This was a line between... We put coax in, then, and we ran a line between Show Low and Pine Top in eastern Arizona, up in the mountains, and put FM modulation...

TAYLOR: Earl talked about having developed an FM transmission system. He used Coolidge, someplace.. .1 can't remember now.

RICHEY: That was the next generation of the equipment, but I used it on there and at first...

TAYLOR: How did you get the FM? How did you generate it?

RICHEY: We made FM modulators at... The first thing we did to test it, we had an old sweep generator that used klystrons. And we just beat the two of them together and modulated one of them. We tuned it to about 70 MHz and that was our modulator. But then we made a varactor modulator at about 50-100 MHz. We had three of them operating in there.

TAYLOR: Was this toward the end of your watch?

RICHEY: Yes, it was toward the end of my watch. And it worked. We first tried using it on drop cabling. We just ran drop cable across and put one on each line and all on the same frequency. And that was a problem because they were all on the same frequency.

TAYLOR: Did you have multichannels.

RICHEY: We ran 3 channels, all FM on the first seven systems. Then we ran one across and it worked beautifully and we had to have some amplifiers and they worked. We didn't... Everybody said, "Oh they are easy. We'll just saturate them, make them limiters." That's just plain intermode, you can't have that. It worked, but it didn't have the channel capacity that we needed to get across. So we put a microwave system in to replace it and built it as a separate headend to solve the situation.

TAYLOR: Did you know Earl Cullum, a broadcast consultant in Dallas.

RICHEY: Yes, that is a name I haven't heard in while...

TAYLOR: I was telling Earl Hickman about this and he didn't know it, he knew about Cullum but didn't know this story. Earl had been Eisenhower's communications aide preparing for and during the Normandy Invasion. He was a real gentleman and a good solid type engineer. But when the FCC was considering the reallocation in the 50's, Earl urged them to change from amplitude modulation to frequency modulation because of the interference situation. And he pushed real hard and put a lot of papers in on the subject. But there was no way they could hammer it down to 6 MHz channels and the thing died because of that. They were already -- from 1941 -- locked in to the 6 MHz and couldn't do much about it. But it was interesting and Earl had a good idea, and there would have been a lot of differences in our television if we had FM to begin with, it think.

RICHEY: Well, you know the outcome of that is that they used the FM modulators to g