Interview Date: Thursday November 07, 1991
Interview Location: Washington, DC
Interviewer: E. Stratford Smith
Collection: Penn State Collection
Note: Audio Only
SMITH: This is Tape 1, Side A of an oral history interview with Mr. Sol Schildhause, partner in the California and Washington, D.C., law firm of Farrow, Schildhause & Wilson. This interview is part of a continuing series of oral history interviews relating to the cable television industry, which are being conducted with industry pioneers, current leaders in the industry, and persons in government who have significantly influenced the development of the cable television industry. Mr. Schildhause, while with the Federal Communications Commission, played a highly significant role in influencing government cable television policy. It is this role which we intend to explore in this and subsequent interviews with Mr. Schildhause. This oral history series is being conducted under the auspices of The National Cable Television Center and Museum at The Pennsylvania State University. I am E. Stratford Smith, Director of the Oral History Program at the Cable Television Center and Professor of Cable Communications on the faculty of the School of Communications. We are in Mr. Schildhause's offices at 1400 16th Street, Washington, D.C.
SMITH: We start, Sol, with the vital statistics. When and where were you born?
SCHILDHAUSE: Well, I'm kind of big for my age but I was born September 5, 1917. I was born in New York City. What else did you ask me about?
SMITH: Well, that got it started. Tell me something about your parent's background.
SCHILDHAUSE: Well, I didn't think anybody else would be interested in that but let's see. My mother was born in the United States--in Harlem, as a matter of fact, in New York City. She was the daughter of German immigrants who came from Frankfurt-am-Main, Germany. Her maiden name was Gerber. My father was an immigrant who came from Austria--a part of Austria which may now be Poland. He came over I think probably in 1912 or 1913, around then. It was an arranged marriage and they were both very, very poor. I grew up in rather poor circumstances. I grew up in the north Bronx right south of the city line. The city line being the dividing point between the Bronx, I guess, and maybe Yonkers. As a kid, even though we were poor ... it was so far north of where the activity was in that city that I ended up as a pretty expert golfer and a speed ice skater. I competed in that for years. There were all kinds of opportunities because it was open country in those days.
In the middle 1930s, I guess, I started going ... I did well in elementary school and in high school and I skipped a whole bunch of times. I think when I finished my eighth grade--eight years of schooling--I was under twelve I had skipped so many times. Is this too much detail?
SMITH: No, we want all the detail but let's finish with your mother and father first. Your education is something that we want to go into in considerable depth. You indicated that your family was poor. What was your father's work? How did he keep the family together?
SCHILDHAUSE: My father was a very bright guy who was always slightly ashamed of the fact that he spoke with an accent. I think when he came over he was consigned to a man who had a garment factory in New York City. So my father I think on his documents was listed as a tailor. He was always ashamed of that because a tailor was something that he thought was kind of undignified. He subsequently became what is known as a production man in the ladies garment business. A production man was a guy who supervised the whole back room. He supervised the design, the purchase of fabric, the making of patterns, the whole business of contracting out to independent contractors, the business of sewing garments together and so forth and so on.
He was a fiercely independent guy. He was kind of a quiet fellow but he had a sense of wanting to be on his own all the time. I think he probably figured that was the American thing to do. He wanted desperately to be assimilated. He loved horse racing. He loved prizefights. I went to prizefights at a very young age. I saw guys like Benny Leonard fight and people like that. The times when he worked for other people, had jobs, he did okay because production men were considered high-class fellows in that business. But whenever he was in his own business he did very poorly and so we had some very hard times when he was between successes. Hard times in New York City in those days meant trying to borrow three or four dollars from your grandmother. I mean my mother would try to borrow three or four dollars from her mother who was my grandmother. Of course, we were always ducking landlords moving from place to place. We never owned a house. We always lived in rented apartments.
Now on my mother's side of the family, my grandfather was an egg candler if you know what those are. He was the kind of guy who worked for commission merchants--commission merchants being butter and egg men in those days. He held eggs up to the light to see if they had blood spots in them.
SMITH: Now was your grandfather ... are you talking about in Germany or in this country?
SCHILDHAUSE: Here in this country. On my mother's side, my mother's father was an egg candler. He worked for commission merchants--butter and egg men. The company was Albert and Gerber owned by his brother. Albert and Gerber was a famous firm in New York City for years. I'm getting much too detailed.
SMITH: No, you're not. You know somebody may want to research this to find out more about Sol than just cable; so go ahead.
SCHILDHAUSE: Well, my mother was Fannie Gerber and her father was an egg candler and he worked for his brother who was Gerber of Albert and Gerber. Albert and Gerber were butter and egg men, literally. They were rich people and they were the only rich people I ever knew when I was growing up. They lived on President Street in New York City, which I think is now Crown Heights where all of the fuss is between the blacks and the Hasidic Jews. His son, Mort Gerber, owned all the black theaters here in Washington, D.C. All the black theaters on U Street and so forth, Howard, etc. That's about it.
SMITH: You said the marriage was arranged for your mother and father. Was that family arrangements?
SCHILDHAUSE: Family arrangements, yes, between older folks. The fathers and mothers of these children put them together. Very attractive people. My mother and father both were physically attractive. Let's see now. I had two sisters. They were younger than I. One died at a very early age. She was a blue baby and in those days you couldn't cure that and so I watched her die in her crib when she was six years old. That was the first blow to me in an otherwise rather easy childhood. My folks were very protective of me. The other lady is my sister whose name is Hannah Glenn. She lives in Florida. She's from Short Hills, New Jersey, where Bud Hostetter was raised. That's my connection with Hostetter. She's retired and lives in Florida and plays golf all the time. A single lady ... a widowed person. That's basically my family.
SMITH: You also used the term "consigned" with respect to your father's immigration to this country. Would you elaborate on what that meant.
SCHILDHAUSE: As far as I can remember--you know this is mostly picked up from sitting in on family sessions and hearing the old folks talk--but my recollection is that my father was sent over to a sponsor here. In other words, you had to have somebody who would vouch for you in those days at least and it's probably still true, I'm not sure. So he was sent over to a person from his own hometown who had gotten here perhaps ten years earlier and had gotten his roots down and was now able to accept somebody from back home who was also wanting to get a start in the new country. I think my father was maybe eighteen or nineteen when he came over here. I know I saw photos of him ... typically, he was wearing knickerbockers and a cap and he had a tag on him. He came through Ellis Island. I know that for sure, and he went through the drill. After he got here he brought all of his family over, my father did, which includes ... He had a lot of brothers and several sisters and he also brought over cousins. He must have brought over twenty or thirty people, my father did, and vouched for all of them and helped set them up and supported them until they got started and that kind of thing. They were probably in their late teens or early twenties.
SMITH: That had to be a considerable burden on him ... a financial burden.
SCHILDHAUSE: I think it was but I think he did better early on than he did later. But he did all of that and those people have all turned out to be decent folks none of whom have made any large strikes, but they all stayed out of jail and were reasonably charitable and didn't hurt anybody. I still see some of them ... there are some of them still alive. One of my father's brothers is alive in Florida. He's the only survivor in that bunch. He was a prizefighter and did a number of odd things like that. My father's sister Anna married an Italian man named Joe Columbini and they had four children. I see some of them and I support one of them. I support Marilyn now. Anthony Columbini is dead. Guy is alive and Annabelle is alive. So three of the four children are still alive. Unless you want me to keep going, I think that's about enough of this.
SMITH: Well, you mentioned boxing and earlier than that you had mentioned your own interest in sports as a boy. I think I interrupted you there to carry you back to the family. Let's go on to your interest in sports.
SCHILDHAUSE: Well, I was one of the best athletes in my neighborhood but I was real small and I developed very late. In fact, I didn't start shaving until I was about twenty-three or twenty-four years old. But between my fifteenth and sixteenth year I grew and I eventually got to be about six feet tall. I was really a small kid and very blonde and blue-eyed and hairless. I don't know what it was but I had very good reflexes and I was a great athlete. I played basketball, football and baseball. In fact, I thought I was going to be a major league baseball player. I was a shortstop on all these sandlot teams in the neighborhood. Of course I competed in speed ice-skating, which I adored. I played golf because I caddied for years. Caddies generally can play golf because they have lots of time in which to bang balls around the course while waiting for the people they are working for to tee up. Let's see, what else? I guess that's about it.
SMITH: Did you do organized sports in school?
SCHILDHAUSE: In high school I was too small and so I played on the senior basketball team. In fact, I still have a shirt that says 1933 on it. But apart from that I couldn't make any of the school teams because in those days the guys who were the star athletes in high school were twenty-three years old, some of them. They looked like they had been there forever. They were men ... I was just a kid. I was a little kid, too. But in the neighborhood sports I was a fine forward passer and I always got chosen first in all pickup teams, you know. I can tell you one charming story if we have time for it. The way I became a speed ice skater was that in 1932 a Jewish guy named Irving Jaffe won a number of speed skating events in the Olympics. An unheard of thing so every Jewish kid in New York City bought speed ice skates. I lived near Van Courtland Park, which is a park that had a big lake--and the lake's still there, by the way--and it froze over just about every winter. There was always good skating and the parks department kept it in fine shape. In my neighborhood we had at least a dozen skaters who were prime quality and could have made the Olympics if anybody had given them any encouragement or any kind of training or instruction. Nothing ... we all learned it from just hearing about it and seeing it. We were good and we'd go down to that lake and get into a line. In those days we had gotten good enough so that we would ... Of course, we didn't have good skates and we didn't have good clothes or anything but we knew how to ... We'd bend down low, put our hands behind our backs, and start striding. We'd do it in a line--ten or twelve people--stride for stride with a pacesetter. We'd go around that lake and we'd do that hour after hour, day after day. That went on for years. After a number of years we were all very good. As I said, with some encouragement, we could have gone on. But we didn't have encouragement and we didn't go on. I skated on those funny speed skates until maybe two or three years ago. Yes I did.
SMITH: During that period--your younger period--what sort of job activity did you have as a boy?
SCHILDHAUSE: Jobs were hard to get and my folks were very, very protective of me, which is true. Most of the kids I grew up with were always trying to earn twenty-five cents, fifty cents, or even a dollar if we could. So beginning when I was about eleven, I guess that was my first job, I started caddying golf courses. We lived in an apartment house then that, I think, was one street from the golf course. The golf course was a public course and it was surrounded by a high fence--an Anchor chain link fence. In the couple of hours before it got dark in the summertime we would climb over the fence and there would be very few people playing and we'd just bang balls around illegally. We got to be pretty good golfers. Of course, I started to caddy as I got bigger. Caddying meant getting up at ... now you're going to find this hard to believe, but it's actually the case. We used to get up at three o'clock in the morning to get out in line to sign up early so that you could get maybe one or two rounds in. I did that summer after summer for three, four, five years. Got up at three o'clock in the morning and ran over there and hid in the bushes because you weren't supposed to show up until it got light or something like that. When the caddy master said, "Okay" we'd all run out from the bushes and get in line. A public golf course would mean six or seven hours of caddying. Six or seven hours because there were always holdups on the courses. When you got through you got a dollar for that and if you had done good work--which meant you hadn't lost any golf balls--you might get a quarter. That was customary, a dollar and a quarter.
One of our guys who was several years older than the rest of us, came into a car, an old touring car. We started piling into that and going up to the fancier clubs in Westchester County. Argyle Country Club was one name that I can remember. That got to be a little bit better because the people were somewhat more affluent up there and they treated the caddies a little better. You know we could make three or four dollars sometimes in a day up there.
You could buy a permit in those days from the city of New York. A permit that would allow you to play golf on any of the city golf courses as often as you wished. I forget what the cost was but it was very nominal. It might have been as little as ten dollars for a whole year. You got a metal tag that identified you as having bought an annual subscription. There was another public golf course right near us so what we could do was we could take an inexpensive golf bag with three or four clubs and at three o'clock in the morning rush over to the other golf course and put that bag down in line and then come back to sign up to caddy. After we got signed up to caddy, we'd go back to the other place and by that time lots of golfers had shown up and we'd sell our place in line. You could sell your place in line for a dollar or so; so you could make another dollar doing that. That was how desperate things were in those days. We did all that kind of thing.
Apart from that I did not do much else. I couldn't get any regular kind of job and my folks wouldn't let me do the things that the other fellows did like selling candy on ferry boats and things like that. I didn't do any of that.
My father had a factory in those days. Lest you think this is like a Ford Motor Company, let me explain what a factory was like. A factory meant he could rent loft space in a building at 535 Eighth Avenue let's say, which would be 37th or 38th Street. You could rent loft space there for probably $200 a month. Generally the space was empty because somebody else had just gone under and had left it and in it was a lot of machinery. Enough machinery to ... sewing machines, pressing machines, and the tables where ladies could sit--in those days called girls--could sit and sew on snaps and buttons and belts and things like that. So you could rent that from the person who owned the machinery, generally another person who rented it to the fellow who had just gone under. So for probably several hundred dollars, you had a factory. Having a factory meant you had to go out and get work now. He was a subcontractor in those days. They called them contractors but subcontractor gives you a better view of it. As a contractor he had to know a manufacturer who had designed and bought the fabric and had cut it up and now wanted somebody else to sew it up for him. So if you had a contact like that, a connection like that, and could get work from that kind of fellow you could employ people who would sew up the garments and clean them up and then you'd ship them back to the manufacturer who would then send them out to the stores. I think a lot of the business in the rag trade in New York is still carried on in that way. But when I talk about a factory, that's what I mean. That's what my father had. So I would go down and work in the factory but what I did was paperwork because I could read and write, and do all that kind of stuff--add and subtract and do things like that. I made up payrolls. Making up payrolls meant ... These people all worked on piecework so when a person sitting at a sewing machine got a bundle of dresses to sew up--there might be six or eight in a bundle I'd say--it came with a ticket. The ticket had three or four sections to it. The first section was for that person. Once they sewed the dress they'd clip off that section and that was their evidence of having completed that task. Then they went on to the next function. The next function probably was pressing--to press the seams down. So that fellow would cut off his ticket. Then it might go to somebody who had a machine who would do the felling, which meant to blind stitch a hem up. It went through a number of routes like that and each person would clip off the ticket. At the end of the week they'd total their tickets and I would count up the tickets. These were all union shops in New York City and before--you won't believe it but it's true--before every dress was sewn up there was a meeting and a decision on how each function would be paid for. So it was so much for the operator, the operator being the person who put the thing together, that would be the operator; so much for the presser; so much for the blindstitcher; so much for the finisher. The finisher was the person who cut the threads off and made it look nice and put it on the hanger, etc., and put a tag on it. So I would total all those things up and then finally ... We didn't issue checks in those days, it was cash money. I would stuff money into envelopes and distribute them to the people. Now I'm not talking about big dough you understand. I think an operator in those days was the highest paid person and that was about sixty-five cents to sew up a dress. A number I remember from when I was doing it. Now I'm talking fifty or sixty years ago you understand. Why am I saying fifty? Let's see this is 1991 so, yeah, it would be more than fifty years ago. I remember stuffing envelopes with four dollars for a week's work; twenty dollars for a week's work; fourteen dollars for a week's work. Now, you have to understand, these people did not work fifty-two weeks a year. They only worked when there was work and there was plenty of off-season when they didn't work at all. I remember my father walking out, not occasionally--most of the time, with his share ... would be five dollars, maybe twenty dollars. Sometimes he got lucky and he might get a hundred but a lot of times nothing. I remember that quite vividly. It was very tough.
SMITH: He would negotiate with the workers what they were going to be paid for these various pieces of work they were doing.
SCHILDHAUSE: He would negotiate with their representatives. There was a union representative in every shop. The ILGWU was the union, International Ladies Garment Workers' Union. It was a tough union--a real tough union. For example, the owner of the factory could not shut down the factory at night. Only a union person could shut it down. They couldn't start it in the morning. Only a union person could do that. The owner of the factory was basically a kind of symbol, he was the guarantor, kind of. The factory was run strictly by the IGLWU and they were a tough union. You had to do business with them. I remember when I was a kid having heard stories and seen evidence of gang wars and fights between the union goons and goons that were retained by manufacturers. It was class warfare for a lot of years. As a matter of fact, one of my father's very, very close friends, his name was Moe Young ... Moe Young was an industry goon. My father had nothing to do with any of these people. My father was a very gentle man and the sight of any kind of violence really upset him. It really did. He wasn't a coward or anything like that. He just was a gentle person. Moe Young was one of his old friends from the old country. Moe Young was a little guy who walked around with a constant chip on his shoulder and he was a goon who worked against the union. I was on the subway with those people once--my father and Moe Young. They were taking me someplace. It was on a Sunday. We were standing on the train and some guy was making some scandalous remarks about my father and his friend, Moe Young. Moe Young didn't say a word--they were ethnic references. But when the door opened--this guy was standing with his back to the door--Moe Young hit this guy in the jaw and knocked him absolutely cold onto the platform. He just took it like it was kind of nothing. I observed that and couldn't believe it.
I'd like to tell you one other story. When I was a kid my father had another friend named Morris Pedinoff--what a funny story. These fellows and my father went into town every Sunday. Very often they'd take me with them. We'd go downtown and he'd meet his buddies and they sometimes played cards. Well, this day there was a crap game going on in a factory in one of the loft buildings. My father didn't play craps. My father was a card player and horses, but Morris Pedinoff was a crap shooter. So they went up there and there was a guy running this. There was always a fellow who was the entrepreneur running this crap game and he would take a little something out of every pot. Anyway, Morris Pedinoff started winning money. I think he had some huge sum of money, maybe $15,000 to $20,000 he was winning--it was a lot of money I remember. He got into a scrap of some kind. Some of the people running this crap game got very agitated and they started yelling at Morris Pedinoff. They accused him of cheating and there was a lot of stuff like that. And they picked him up and they started carrying him to the window. They were going to throw him out the window. We were up about fifteen stories. He was screaming and grabbing. They had these pipe racks in these factories that they hung dresses from and he started grabbing these pipe racks. He was screaming and yelling. Finally my father picked up some huge object and threw it through the window and it shattered the glass and the window frame and the glass fell into the street and these guys heard the crash and they dropped Morris Pedinoff and they grabbed his money and everybody ran. I was very young. I might have been maybe eight or nine years old.
SMITH: You didn't mention when we were talking about your father earlier, is he alive?
SCHILDHAUSE: No, my father is gone now ... my mother, too. My mother died when she was fifty-six and my father when he was sixty-six. I've outlived both of them. My father came from very, very big people who were completely unathletic but absolutely the trimmest people you ever saw. All of the men were six feet or more tall; all very, very handsome; all very fit looking and trim; all smoked and drank and all died at very young ages from heart trouble with one exception. The exception is the guy living in Florida who was the prizefighter.
SMITH: Maybe if they'd had the benefit of the kind of surgery you've had the benefit of they'd...
SCHILDHAUSE: Probably. The only thing they ever had wrong with them was heart problems. They were all very healthy and they were all huge eaters. It's interesting ... my father could not stand the sight of vegetables. He hated vegetables. He never ate them. The only thing he ever ate was a potato. I don't think he ever ate a tomato on his life. So it was meat and potatoes. All of them were like that.
SMITH: I have to take you back to cross-reference your caddying with the experience of a cable television pioneer who was also a caddy. You know him very well, Frank Thompson.
SCHILDHAUSE: I do know Frank.
SMITH: Frank tells a story of having caddied for Al Capone's brother and I was wondering if you recall caddying for anybody notorious or famous--either way.
SCHILDHAUSE: Let's see. No. My only recollection that I carried with me for years was I once caddied for this lady who had this beautiful white jacket. God, it was beautiful. She gave it to me and I thought ... it was so beautiful it was almost holy. I kept carrying it tenderly. She said to me, "Just strap it to the bag." I said, "Well, I put the bag on the ground and it will get dirty." She said, "I don't care. I've got lots of them at home." I never forgot that. That's about the only thing of note.
SMITH: All right. We'll just go on to your education, your early education first. What high school you attended...
SCHILDHAUSE: I skipped four times in elementary school. I remember my elementary school teacher, Edith Connolly, she thought I was ... Edith Connolly had one of those hairdos that was up high--looked like a rat's nest, you know. She had funny little rimless glasses. Mrs. Connolly thought I was just the greatest thing that ever hit P.S. 80. We even had a school song. You won't believe this, P.S. 80 had a school song ... (singing) "Of our school upon the parkway, we all delight to sing, in measures that are heaping full of glee." Anyway, it was on Moshulu Parkway. Some famous people came from Moshulu Parkway ... Ralph Lauren; Calvin Klein; Robert Klein, the comic, they all came from Moshulu Parkway. A lot of people came from there.
I skipped four times in elementary school and I was under twelve when I got out.
SMITH: Out of elementary school.
SCHILDHAUSE: Out of elementary school. So I went into high school when I was twelve years old. I went to DeWitt Clinton High School, which was also on the Parkway. I went into high school in 1929. It was a brand new school--Clinton High School. It had every last feature, every modern feature that was built into schools in those days. It had an indoor swimming pool. It had a mezzanine running track in the gym. Lots of fine things like that. It was a first class physical structure. And it was fun. I did fine. I walked to school every day because I lived near it. That's where I learned to play handball and all those good things. I did fine in high school. Nothing noteworthy. I took Latin and a few other things. I did extraordinarily well in French and I would have probably won a state medal except that there was another guy in my class named Sparacio--looked like Eddy Arcaro. Sparacio, unfortunately, beat me out. I was very good in French and I once got a 99 in French from Mr. Cushing. Mr. Cushing said he couldn't give me 100 because that was all he could get when he was taking tests. Anyway, I got out of high school uneventfully and...
SMITH: Well, going into high school at the age of twelve when you said you were a small boy at that time, did that create any particular problem with the other kids?
SCHILDHAUSE: Yes, it did. Most of my friends were big strong guys and one of those fellows took me under his wing ... Monroe Michaels, I'll never forget him. Monroe Michaels was a big, tall angular guy. He was a tough guy and nobody picked on me because he would beat them up. He was the best fighter in the neighborhood. So, yes, I was under his wing for quite a while. I don't know what's happened to him.
I have to tell you this interesting story. We had a fellow named Herbert Franklin who was also in our neighborhood. Herb Franklin was a fine speed skater. There was a guy who worked for NCTA until about six or seven years ago--I wish I could remember his name. He was a prominent figure in the 1984 Cable Act for the NCTA. He was out front making speeches for them and so forth. His name may come to me. It does. It's Ed Merlis. Anyway, one day he said to me, "You know my father-in-law is Herb Franklin." The fellow I grew up with back sixty years ago. So he was going to bring us together but every time Herb Franklin ... I said to him, "How'd Herb Franklin do?" He said, "He didn't do too well." I said, "What did he do for a living?" He said, "Ah, he sold insurance." So Herb Franklin has never wanted to meet up with me when he comes down here. But that's an interesting connection.
So, anyway. What happened after that, right? What happened after that was ... I was the darling of ... Am I losing anything?
SMITH: So far it's been registering all right. You could raise your voice just a little bit.
SCHILDHAUSE: I'll do that. This is kind of fun actually-- reminiscing. I haven't thought about any of this for a long time.
SMITH: Well, that's one of the hazards of this process.
SCHILDHAUSE: Oh, it's making me sad. But anyway, I think I'd better put my tie on. I can't make this sucker stay. [Editorial Note: He is referring to the lavaliere microphone.] It's still okay as far as you can tell?
SMITH: Yeah, still okay.
SCHILDHAUSE: I was the darling of my father's family. They were all big, immigrant types and I was a blonde, blue-eyed American who was a good athlete. Most of my father's brothers and sisters didn't have children so they kind of cottoned to me. They loved to shove me out in front and say, "This is my nephew." So I grew up thinking that I was kind of special. So when it came time to leave high school, I was going to go to college. One way or another that family wasn't going to send me to any poor school. They were going to send me to a real school. So they sent me to New York University and it cost $300 a year to go there. Getting that $300 together was tough. I knew that but I didn't care because I was kind of a dumb jock more than a student. So I went to New York University and I did quite well there for that year especially since I took French and I was strong in that. I did fine and at the end of the first year we had no more money. So I stayed out the next year and I bummed around. Literally I bummed around working in my father's factory and just hanging around and doing nothing. After that year my mother couldn't stand it and so she literally took me by the hand and dragged me down to the City College of New York and enrolled me. She really did, like I was an infant almost. I got into school and I went to school every summer to make up the year I had lost and I graduated with my class in 1937. So I started at NYU in 1933, stayed out a whole year, and finished in 1937--got a degree.
Then what do you do? Well, I still wanted to be a major league baseball player. I had an uncle, my father's brother Louie. Louie was called Big Louie by a lot of people and Big Louie was married to Eva and they had no children. They had lived in Boston during Prohibition. I had heard rumors of his having made a lot of money in booze and numbers in Boston. As a matter of fact, when Louie came back to New York City he bankrolled my father for a couple years until my father broke him. Louie loved me. He had an auburn automobile with side curtains--a convertible with side curtains. He said, "This boy is going to..." Oh, I have to tell you one other thing. In 1936, I was in my second year--junior year--at City College in New York. They gave a postal exam in New York City. It was the first time since maybe 1929. It was the first civil service exam for postal clerk in years. Eighty thousand people took it. A postal job in those days was considered a prime job because it was steady. It was like being a teacher or a fireman or a policeman. That was great work for people from my class.
SMITH: Sol, I've got to turn the tape over. We'll go right back to that as soon as I get it turned over.
End of Tape 1, Side A
SMITH: You were talking about how valuable postal jobs were.
SCHILDHAUSE: Yes or any job that gave you a steady income. It didn't make any difference in my class whether you were ... It was less important to be rich than to have a steady income. So 80,000 people took that exam and all of my friends took it. I went along because my friends were going. But I had been led to believe by my folks that they wanted me to keep going to school and I was the only one in my whole group that went to school. All of them dropped out after high school. Anyway, we all went down to take the examination and I ended up number 300 out of 80,000. The other 299 ahead of me were mostly people who were civil service, had veterans preferences, and things like that. I ended up near the top. Now experience in postal jobs was that you were appointed as a substitute clerk carrier. I was a clerk type. You were appointed as a substitute. Now you went down every day, showed up every day--it was like a shape up--and if they had work for you, you got it. If not, you went home. It was customary to do that for about five years until you got to be a regular. I found out later that some of my people were still doing it five years later--some of my friends. But I was so close to the top, there were so many vacancies, that they appointed me and they made me a regular right off the bat so I never did any substitute work. So there I was making ... Well I worked the night shift, which was midnight to eight o'clock and went to school after eight. Then I came home, did homework and went to sleep and got up in time to go to work at midnight. They have a tube system under the city of New York. It fans out from 33rd and 8th Avenue where the post office is and I worked down in the subterranean part of that building stuffing tubes with mail. Then I would hand the tube over to another guy because that was also a union function and he would stick it into a pneumatic carrier of some kind and off it went to one of the boroughs. That paid a nighttime differential of 10 percent so I made sixty-five cents an hour plus 10 percent. So it was about seventy some odd cents an hour, actually seventy-one and a half cents, I suppose. I was doing quite well so that by the summer of 1937 when I graduated from City College in New York I had $800 saved. My father asked if he could have the ... he didn't ask, it was assumed that sons would deal with fathers that way. He said he was going to buy an auto and he took the $800 and bought an Oldsmobile. It only cost $800. He had that car until 1949 as a matter of fact.
But anyway, when I finished college in 1937 there were serious family discussions about what to do next. My Uncle Louie wanted me to be ... "That boy's gonna be something" ... I could hear him say it. Everybody assumed I was going to go on to some kind of graduate school because Louie insisted on it. He was kind of big enough to make things stick in that family. My mother, coming from her careful Germanic upbringing--Teutonic upbringing--she felt that my future was assured. I had a lifetime job making a couple thousand dollars a year approximately. I think it was almost that--$1,700 a year or something like that. There were serious discussions, and when I quit that job in the summer of 1937 there was consternation in that family. But Louie insisted I be somebody and the only school he knew about, because he'd come from Boston where he was in illicit businesses, was Harvard. So he took me up to Harvard. That's a true story. Now, in those days enrolling in Harvard was a piece of cake.
SMITH: Well, my notes say ... How did you get to Harvard Law School? How did you decide on law because Harvard had...
SCHILDHAUSE: I didn't, he did. Louie did. I didn't want to be a lawyer. I wanted to be a baseball player. So Louie said, "No, he's going to go to law school." I went up there and I got admitted easily because in those days they took just about everybody who had decent grades, who looked like he could do it. They took in 600 and graduated 300. Yale, on the other hand in those days, was very selective--took in 125 and graduated 124 ... somebody got sick or something like that.
But at Harvard ... I don't know if you've ever read that book, One L. You probably will find it quite familiar. They had a professor up there named Bull Warren. Bull Warren taught Property and he was a tough guy. He would scare the hell out of every first year student. He would say things like this ... he would be sitting in his classroom with about 150 other people and he'd say, "Look to the right of you and look to the left of you because one of you is not going to be here next year." Then he'd do that the second year, too. He would really frighten you. I was frightened. I must admit, I was scared. When I went up there I was like twenty years old. Was I twenty? Yeah, I was twenty years old. I got out of elementary school when I was twelve, and four years in high school I was sixteen approximately. I was under twelve, the summer I turned twelve and I turned sixteen over the summer--my birthday is in September. So I was four years in college which I did in three years and was nineteen-something and then over the summer I turned twenty. All the other guys were twenty-two and twenty-three. I didn't even shave yet and those guys were men with moustaches. I got up there and the first thing I hear is this business about half of you guys are going to flunk out. I didn't want to do that.
How this was all being paid for ... my Uncle Louie paid the first payment and it cost $400 a year. He paid the first payment--you paid in quarterly payments. He paid $100 and I think the dormitory might have been as much as $200 a year. I lived in a dormitory--Walter Hastings Hall. It's still there--a very famous place. I think he paid half of that so he might have paid $200 and I was in. I never heard from him after that. My folks had no money and it was very difficult. Somehow they scraped together the second payment because I know there was $200 up there--might have been as much as $300. I can't recall but it was of that order. As frightened as I was by all these older people who were practically lawyers, my God, I had a high school mentality. With all of these professors scaring the dickens out of you with all these stories about flunking out, I started digging in like everybody else did. I saw guys whose lights were on ... It was customary to look around and see if any lights were on, you'd stay up and keep going. I found myself working until two or three o'clock in the morning.
Well, Christmas of 1937 they gave an optional examination. I don't know how it is today, but in those days Harvard gave one examination at the end of the year, that was it. That determined your grade for the whole year. I ducked classroom performance because I was frightened and all that kind of stuff. At the mid-year they gave an examination. It was called an optional exam, which you could take just to see what it was like to take an examination. To get some practice at it. The examination was in criminal law. I had a professor named Sheldon Glueck who was famous in those days. He and his wife had written a series of books. He was more a sociologist or a psychologist than he was a practicing lawyer type. They had written books about troubled women ... things like that. Sheldon and Eleanor Glueck. Sheldon Glueck was a kind of a gentle man, sixty or seventy years old. He gave the examination in criminal law. You walked into this room and you got a printed piece of paper that had the exam on it. You were given an exam book, kind of an eight by ten pamphlet with fifteen or twenty pages stapled together with a blue cover. I sat down and took the criminal law examination. A few days later I'd go to Langdell Hall where the library was located. I'd go up to the desk to pick up a book or something and they'd tell me that Professor Glueck wants to see me. He's downstairs in what they call the stacks, down into the bowels of Langdell Hall four or five stories below. The whole idea of a professor wanting to see me was kind of frightening in and of itself because I was kind of unused to all of that kind of stuff. I went down to see him and I walked in and I was wearing my $18 dollar suit--it was powder blue. It looked like it was an import from one of the Balkan countries, you know. I walked in and I stood there wondering what was happening. He said--a very benign kind of fellow--he said, "Tell me, where do you come from?" I said, "I come from New York City." "What do your folks do?" And I told him briefly. "Well gee," he said, "I just wanted to see what you looked like because you got the highest grade I ever gave on any examination." I thought that was nice and I discovered that with a high grade like that I qualified for a scholarship. Well, I was no scholar. I had never gotten anything in life except a 99 from Mr. Cushing in French so I went to see Professor Morgan. Somehow I was told to go there. He was a famous professor who had written a bunch of books on evidence--Ed Morgan. I went to see him, a nice little WASP man. He said, "Sure, you're entitled to a scholarship"--"and we'll return all the money that has been paid by you." I went out of there and let me tell you something, my father had that 1937 Oldsmobile that he bought with my money, right? He drove up there just like that to pick up that check for $300. That's how important that $300 was.
So I had scholarships that first year. I did well the first year. I finished number seven in my class of six hundred. Number one was a guy named Marx Leva--Leva, Hawes, Symington in this town--Marx Leva. A guy from Selma, Alabama, who still sounds as if he comes from Selma. He's still alive and practices law here. I think he was Undersecretary of State at one time perhaps. The first fifteen finishers were named to the Harvard Law Review. So I was named to the Harvard Law Review.
In my second year I started to grow up and I discovered all the attractions of the flesh and my buddies were a whole bunch of bad guys from Notre Dame. We did a lot of very bad things. The second year I didn't do quite that well so I didn't have a scholarship the third year. I graduated from Harvard owing them for the third year because I didn't have any money. It's a wonderful place and so they bankrolled me through the third year.
I never really made any dough. The first real money I made was 1956 when I went out into the radio business with Lou Poller and Mike Feldman, of Ginsberg, Feldman & Bress. We bought this radio station in Oklahoma City and I may have made as much as $50,000 and that was a ton of money for me. It took me a long time to pay that money back to Harvard.
SMITH: Where did you go directly out of Harvard?
SCHILDHAUSE: Out of Harvard I got a government job. I worked here in Washington, D.C., for something called the Marketing Laws Survey. I worked here for a little arm of the Department of Commerce that was checking on the barriers to commerce between the states--like Florida insisted that if you wanted to bring milk from Georgia you had to color it blue. You know, that kind of stuff. I was on a project with Joe Kittner, by the way. [Editorial Note: Joe Kittner was a Washington communications lawyer known to both SCHILDHAUSE: and SMITH:.] He worked there, too. It was not a great place but it was ... We staggered along. I made $2,000 a year and then there was an opening in New York City and I got that at $2,600 a year. I wanted to be in New York City because I was about to be drafted. I did get drafted but I flunked the physical exam.
SMITH: Where was the opening in New York City? Was it with the same agency?
SCHILDHAUSE: Same place. Marketing Laws Survey had a branch in New York. I went up there and worked there and then I got drafted ... I made $2,600 a year. I got drafted and I flunked the physical. But they kept me around for three or four days while they checked me out because there was some suspicion that maybe ... I was so borderline that maybe they could get me in. But they didn't. And so I was out. So the next job I had I worked for the Office of Price Administration, OPA.
SMITH: In New York or Washington?
SCHILDHAUSE: In Washington, D.C. I came back to Washington and I worked for OPA. I worked for a man named Alan Coe and for Henry Gaud, good guys. I got to be very chummy with them. That lasted until about 1945. I had gotten married in 1943. I married a Providence, Rhode Island, person--Phyllis Sydell.
SMITH: Tell us a little about her as long as you got started.
SCHILDHAUSE: Well, Phyllis Sydell was the beauty queen of the east side of Providence, which is where Brown University is. Her father was a missionary man for a liquor wholesaler but they were kind of nice people, very gentle. They were old-line New Englanders. As old-line as Jewish people can be. But they were both born here and so forth and so on. They had a good family. We were married in 1943 and we came down here to live. I had this OPA job. I was making $3,200 a year then. We lived in Mt. Rainier, Maryland, and started having children in 1945. In '45 I quit OPA and went to work for the Research Institute of America. Interesting place.
SMITH: Finish up with the children. Tell us about the kids.
SCHILDHAUSE: I have three kids. Susan was the first-born here in Washington; Peter was the second born in Providence, Rhode Island; and Richard, the third, born in D.C. They're all alive and well and doing fine.
Susan's first marriage was to a guy named John Lack who, with Bob Pittman, was the guy who founded MTV. His brother, Andrew, is the senior producer of CBS Reports and Andrew now produces the Connie Chung show if it's still on the air. He did West 57th Street--a few things like that--Andrew. An old New York family. Susan and John divorced and she is married to a fellow named Ronald Tash and she lives in Evanston, Illinois, which is a suburb outside of Chicago near Northwestern University. She had a career as a communications person. She was in the communications business, too. When she was married to John Lack, his first job was with Group-W and they shipped him to Dublin, Georgia, to learn the cable television business. She went there and became a headline writer for whatever the Dublin newspaper is. Then they moved him back to some other place, maybe to Philadelphia. They moved to Philadelphia and he went to work for their radio station there. They gave him good training. She went to work for an advertising agency that handled Alpo--the dog food. And then he moved to New York where he became a vice president of CBS and a manager of WCBS, the radio station. She went to work for ABC. She is a graduate of Boston University, the School of Journalism there. Then she got divorced from John Lack and married Ron Tash and moved to Chicago where she went to work for the ABC affiliate there, which I think, is WLS. Then she left there and went to work for Playboy where she worked for a bunch of years doing the annual report and writing press releases and things like that. She had a fine job. I think she might have been as high as a vice president. She's retired now because she has two children. She thinks of coming back to work but she hasn't done it yet.
Peter, the second one, is a free spirit who was very unusual as a child. He's become a medical doctor, which surprised everybody. He did it on his own. Nobody urged him. In fact, the whole family was shocked. He was admitted to the University of Utah through the intervention of a dear friend of ours named Jenkins. But he decided to go to the University of Maryland Medical School because he had a female friend who was also admitted to medical school and the two of them went through medical school together. She's now a practicing psychiatrist. He lives in Visalia, California, where he's a specialist in emergency room work. He likes it because there's no nighttime stuff and there's no billing. Somebody else does it all. He's married to an Indian--a Potawatomie Indian person. That's not quite fair. She's a registered Potawatomie but she's a WASP kid. The Potawatomie's are strange because they don't cut off at a thirty-second or a sixty-fourth like other Indian tribes do. They have two children so my two grandchildren are registered Potawatomie's which means they get the benefits of affirmative action and all that kind of stuff so they'll get into schools and they also get checks from the tribe occasionally. Interesting. He has a wonderful life in Visalia, California, which is in the San Joaquin Valley south of Fresno.
SMITH: You forgot to spell Potawatomie.
SCHILDHAUSE: I think it's spelled P-O-T-A WATAMIE. Exactly the way it sounds ... A-M-I-E at the end as I recall.
SMITH: Just like it sounds.
SCHILDHAUSE: Just like it sounds. I think I could dig up ... I probably have evidence over here because I made Xerox copies of the Indian registrations of my grandchildren who are two little blonde, blue-eyed kids--Indians.
My third child, Richard, is a graduate of the John F. Kennedy School at Harvard. He came up during the years when it was fashionable to be very rebellious and he had a difficult time for a while but he's great now and he's married to a Catholic girl from Lakeland, Florida. They live in Baltimore and have two children. They are doing just fine. He works for the railroad--CSX Corporation. There's the whole story.
What else can I tell you about? I live in Chevy Chase, Maryland. I'm a bachelor. I've lived in the same house for thirty-two years right outside of Friendship Heights, which is just over the city line of northwest Washington.
SMITH: Your children didn't have any compunction at marrying outside the Jewish faith?
SCHILDHAUSE: No. There are no hang-ups about any of this. As a matter of fact, this Indian woman thinks being Jewish is just great. She's becoming so Jewish that sometimes it's annoying. I remember once I was with Farrow [Editorial Note: Farrow is Harold Farrow, the founding partner of Farrow, SCHILDHAUSE: & Wilson] and Mark Chavez, one of our partners in the California office. I think we were in Anaheim around Christmastime or November or early December whatever it was and it was the Hanukkah season--the Jewish Hanukkah season. Peter and his wife, her name is Deon, had come down with the children to go to Disneyland. That evening we met in this hotel suite and we all sat around having a drink and eating some cheese and crackers and so forth. And she reaches into her sack and pulls out all of the paraphernalia one does for lighting candles at Hanukkah time. There's a menorah and all that and she had these kids doing that. And I said, "What's that all about?" I never did that. This Catholic girl from Baltimore, Maryland, Richard's wife, I think she's probably a lapsed Catholic and she doesn't care one way or the other and neither does Richard. So nobody's terribly religious. So there's no problem.
Religion in my family was ... I was raised by orthodox people and we went through bar mitzvah and all that sort of stuff--Hebrew school and so forth. But after that it was ... forget it. In my marriage we went through some of the rituals with the boys, you know. Religion was cultural rather than metaphysical or theological, if you know what I mean. Well, that's enough. I'm culinary, of course. You know, corned beef and stuff like that. Marvelous.
SMITH: Well, I interrupted you at the OPA when you had come back to Washington because I wanted you to fill in some background. Let's pick up at the OPA and follow your career that ultimately got you into the FCC and then into broadcasting.
SCHILDHAUSE: Well, what was interesting about that episode was that I moved over from OPA to the Research Institute of America and I did that because they had a small group down here--Research Institute of America--that basically covered the Hill and wrote a newsletter for a major organization in New York that had hundreds of people. They put out a Pike & Fischer type service--labor, wages, that kind of thing. But the thing that makes it interesting was that it was headed by a fellow named Leo Cherne and I think he may still be alive. But the thing that's interesting about it is one of the big knockers in it was Bill Casey--the Bill Casey.
SMITH: The late director of the CIA among many other things?
SCHILDHAUSE: Yes. And Bill Casey was considered a kind of ugly Irish genius, you know. He was really a homely guy. He was very Irish but he was a genius. He was kind of a sloppy guy. He spoke sloppy, he ate sloppy, everything he did was kind of "devil may care" ... "who gives a damn" ... "I'm who I am" and so forth and so on. I knew Bill somewhat--not well. But we had a bunch of people down here who covered the Hill and went out to lunch a lot with important folks on the Hill and wrote a newsletter. Those guys taught me how to write, really, and I learned a lot. But when the war was over everybody started to retrench. So they cut out the whole Washington office. There were people like Leon Henderson, who was the old OPA administrator, was in the Washington office, a very interesting fellow. So he was out and Ed Clohosey and Larry Wilson, a whole bunch of guys. Jules Abels, who was Bill Casey's closest friend, was also in the Washington office a lot although his principal function was in New York so he was not cut off. But I got to know Jules pretty darn well. When I was in trouble, I once asked Jules to speak to Casey about getting me some help to get a good job in government. Jules said, "Gee, I'd be glad to talk to him." Jules was a very funny guy. He was built like Pee Wee Herman and he had kind of a vague style about him. You were never quite certain what he was up to. So Jules said he would talk to Bill Casey about me. So he came back a week later--he would smack his lips when he talked--and he said [smacking his lips], "Well, I talked to Bill Casey about you and I said, 'Can we do anything for Sol,' and Bill Casey said, 'why should I?'." That's my contact with Bill Casey.
Anyway, we were out of work and I decided I wanted to make some money. My father had gotten quite affluent, for him, because remember the war was over now and people with his talents were in heavy demand. So he was absolutely busted in 1941--with nothing. Within a month or two after that he made a connection with a firm that gave him $1,000 a week for working mornings only and in addition gave him the right to sell for his own account some number of dresses--200 or 300--so he could black market them because there was still price control. He could black market them and take the profits. Well, my father never did that because that was just not his style but he was pretty affluent with that $1,000 a week. So when I'd go to see him we would always go out to the racetrack. At twelve thirty we were on our way to the racetrack any time I went to see him. He did quite well. So by 1946 he was in a business of his own. He said, "You know, if you want to come in with me, come on." So fine, I did that. I went in with him and we just couldn't get along. It was awful. So for two years I just suffered--from 1946, '47, '48. I really did. It was terrible. I left there. I said, "I can't stand it anymore," and I came back to Washington and began to look for a job. It was a tough year. I didn't have any money. I remember I had thirty-five dollars one time and I went down and bought an overcoat. I needed an overcoat because it got cold. I was walking along the street one day after banging on doors around town and getting no place, including the FCC. I was walking along the street when I ran into Irving Panzer. You know Irving Panzer?
SMITH: I know the name but I don't know him.
SCHILDHAUSE: He was a classmate of mine, too. Panzer was with Fischer in those days. It was Fischer, Panzer and somebody else. He said, "Well gee, my partner, Henry Fischer, is writing a service--a radio regulation service--and he's hiring everybody he can get hold of who will come to work on a temporary basis. Why don't you go up there and go to work for him?" I said, "Fine, can I mention your name?" He said, "Sure." So I went up there, I mentioned his name, and I was hired in five minutes. I started working in Henry Fischer's house. It was up on Massachusetts Avenue, I can't remember the address. Right down here ... I guess where there are embassies now. But a house there that Henry and Dorothy Fischer had. Henry had the basement, first floor, and the second floor and he rented out the third floor to a psychiatrist. I worked in the basement with probably a dozen or fifteen or twenty other people just digesting cases. I just worked like crazy making a dollar and a half an hour. So if I worked forty hours I made sixty dollars. I was living in a rooming house or something like that. And I just kept my nose to the grindstone. I just worked, worked, worked.
SMITH: Were you married at this time?
SCHILDHAUSE: I was married and my family was ... I had everything in storage in Providence, Rhode Island. I think that's correct, Providence, Rhode Island. We had gone up there and tucked everything away.
One day I look around and I'm the only one there. Everybody else had been let go except for me. I don't know if you know Henry, but he's a very private guy.
SMITH: I've met him, I don't know him.
SCHILDHAUSE: Very quiet, private man. He said to me one day, "Gee, you can work here as long as you like. The project is just about over but if you want to keep going that's all right with me. You can work as many hours as you like." So I started working sixty hours a week and making ninety dollars. They had a TV set upstairs and they started inviting me up into their family quarters. I thought that was pretty nice of them. That was a big gesture for Henry. I'd go upstairs and watch television at eight o'clock when they signed on, I think, in those days. One day Henry said to me, "Listen, I know a lot of people at the FCC. Over the years I've only recommended two people over there. You're better than they are. If you like, I'll recommend you." The two people were--one was Dick Solomon.
SMITH: I remember Dick very well.
SCHILDHAUSE: The other one was ... I forget who the other one was. A guy of comparable quality. I didn't know either of those guys. Later on I began to appreciate how flattering that was. So he said, "I'll be glad to recommend you over there." So I said, "Sure." He recommended me and I got hired.
SMITH: Into the law department or...?
SCHILDHAUSE: Yeah, into the law department. Well the law department in those days, remember what it was.
SMITH: Well, that's why I wanted to identify whether it...
SCHILDHAUSE: In those days there was a law department, an engineering department and an accounting department.
SMITH: That's correct.
SCHILDHAUSE: And in law there was an elite and the elite consisted of the people who were around--Ben Cottone and Harry Plotkin. They were the litigation types--Max Goldman and Dick Solomon. I forget other names, I suppose Joe Kittner and maybe Art Scheiner might have been.
SMITH: I don't remember Art in that group but I knew all the other three. They were the elite.
SCHILDHAUSE: Harry was the spark plug there and Ben was kind of the figurehead if you remember those days.
SMITH: Harold Cohen was in there.
SCHILDHAUSE: Harold Cohen, yeah. But anyway, they had a bunch of heavyweights. I was properly respectful. Then it was divided up into broadcast, common carrier, and safety, whatever else they called it. I was assigned to broadcast matters so I was not in their elite. Okay. I was assigned to a guy named David Deibler. He was a crusty old guy who handled transfers and assignments. That was my first job. I worked at that and I worked very hard and I did quite well. I was considered ... It wasn't hard to star there because the work was very simple work, it really was. But I starred there very quickly because I was attentive and very disciplined and I had learned to write. I had learned to write at Research Institute and now at Henry Fischers.
SMITH: Who was chairman at that time?
SCHILDHAUSE: Wayne Coy. Very quickly I did pretty well. Dave Deibler, who it was rumored didn't like people of my ethnic background, kind of liked me. I guess I was not like the rest of them, you've heard that stuff. I think that was his attitude. He was a strange bird--a crusty old dinosaur. Dave Deibler ... I kind of liked him despite what he was.
There was a guy named Elliott Lovett. I got to know Elliott because I subsequently was in the hearing division, or whatever they called it, in the hearing section and I was trying the Easton-Allentown case. I got to know Elliott. Of course, Elliott was using me because I was Commission counsel and he was one of the parties to it. Elliott, a very interesting fellow, was wanting to build a new house in Kenwood where he had bought a lot. I told him that Dave Deibler was a master builder. Dave Deibler had built a couple of houses around town. I just mentioned it to Elliott Lovett and he hired Dave Deibler to build a house for him, which is still there--a mansion, you know. Deibler loved me for that.
Anyway, I moved from transfers and assignments to doing some hearing work where I acquitted myself. I always was considered dependable. The fellows who didn't know me were sure I was not because I had the look of a ... a different kind of look. I didn't look like a scholar, I guess, but I was basically a digger. I turned out work and made myself useful. Then there was a reorganization in 1951, maybe, when I think Harry was bounced out and I think they dumped the accounting department and they reorganized it along functional lines. There was a broadcast bureau and there was a ... I think it was 1951. A fellow named Dwight Doty ended up heading up a division and I was put in charge of a branch. I think I was given a grade 14, which was pretty high. I started at the FCC as a grade 9 even though I signed on as an 11 with Ben Cottone. He was the guy who stole a grade from me. I reminded him of that years later. By 1951 I was a grade 14 and that paid $8,800 a year, which was not bad for those days. We bought a house and did a few other things like that.
I was made chief of renewals. I headed up renewals and I did good work there. Let's see, where did I go from there? Then I was made head of television after that.
SMITH: Can you date it just by year?
SCHILDHAUSE: Let me back up a little bit ... I skipped. I was head of renewals in 1951. In 1952 Dwight Eisenhower was elected President. In 1948 the Commission had clamped a freeze on television. No more grants of television. For four years they had a freeze while the Commission started reallocating channels. A guy named Paul Dobin was in charge of it. The freeze was finally lifted, I think, '52 or early '53.
SMITH: Late '52.
SCHILDHAUSE: Okay. Now the Republicans came into power. This is my interpretation of what their attitude must have been because they said, "Well gee, aren't those Democrats nice. They've had it for twenty years and now they're turning it over to us and they're giving us things to hand out." Because there were about 500 pieces of paper that were valuable. Those were pieces of paper for VHF facilities in the channels two to thirteen band.
Looking around for a new chairman, they named Rosel Hyde chairman of the FCC.
SMITH: What position did he hold?
SCHILDHAUSE: He was a commissioner before that, as I remember. I'm pretty sure that's correct. They named him chairman.
SMITH: The only reason I interrupted you is because I knew that at one time he was general counsel and then he was named to the Commission and then chairman, I think.
SCHILDHAUSE: I can't remember when he was general counsel. I just can't remember that. It may have been before my time.
SMITH: It was at just the time I left the FCC that he was general counsel and then became a...
SCHILDHAUSE: He was a commissioner, I'm pretty sure. Maybe not. Well, there's a book over there that probably tells us.
SMITH: We can check it. I have a feeling that he might have gone directly to chairman from general counsel.
SCHILDHAUSE: That's a possibility. I don't know that. Anyway, I think not though.
SMITH: I'm out of tape again so we'll turn it over.
SCHILDHAUSE: Is this going okay?
SMITH: Yes, it's going fine. As a matter of fact your voice is recording much better since you moved the mike up a little bit.
SCHILDHAUSE: This is kind of interesting.
End of Tape 1, Side B
SMITH: This is Tape 2, Side A of the oral history interview with Sol Schildhause. It is still the 7th of November 1991 and this is being recorded in Mr. Schildhause's office in Washington.
Sol, at the end of the last tape we had gotten to the point of discussing former FCC chairman Rosel Hyde.
SCHILDHAUSE: Yes and I was talking about the lifting of the television freeze in 1952 and '53. In '53 after Eisenhower was sworn in he named Rosel Hyde chairman of the FCC. Now the significance of that was that for the first time in the history of the agency, and I don't think it's happened since; a chairman was named for a period of time. There was a termination date on his appointment. I can't recall now whether it was a year or a year and a half. It might have been eighteen months. The conventional wisdom then was that Rosel Hyde was named chairman of the FCC for a specific period of time so that the administration could keep a handle on the chairmanship in the event Rosel Hyde didn't pan out as they hoped he would. Because Rosel Hyde had survived quite well in Democratic and Republican administrations and he was not considered to be an ideological Republican. At least that was the conventional wisdom then. So Rosel Hyde was given this temporary appointment as chairman as it were. One of his first acts was to name me, not a Republican, as head of the Office of Opinions and Review. I did not know Rosel Hyde well at all--hardly knew him. I don't know how he even heard about me because I was rather obscure on the staff. I think I was chief of renewals or something like that. But that's about it. I didn't make all that many presentations at the Commission. I think I was known among staff people not among commissioners. He named me head of the Office of Opinions and Review.
When I got down to that office, I found a very small staff consisting of two lawyers and an accountant. The two lawyers were Seymour Chase and Alan Naftalin. They were both kind of shiny new youngsters. The accountant was a fellow named Charles Borum. Soon after I got there, I don't know how it happened or what the circumstances were, but Donald Berkemeyer was also named to that staff. So we were this small band. There were probably by that time a substantial number of cases that had been designated for hearing or were partially in hearing because the applications for these choice facilities were pouring in. There was hardly a VHF facility in a good-sized market that was not being hotly contested by more than one applicant. Our office was supposed to produce final decisions after the hearing examiners were through with them. We were so besieged because there were so many things to do down there because we also had to handle interlocutory appeals of various kinds. There was just a swamp of material and we were absolutely beleaguered because there were just these two brand new lawyers plus Don Berkemeyer who was somewhat older, and myself.
So Rosel Hyde kept putting pressure on me-- Why don't you bring up these cases? Senator so and so from Michigan insists that we bring up the case involving whatever--Detroit or whatever. And I'm not quite sure I've got the right senator or the right place but it was like that constantly. And I said to him, "We are besieged. We don't have any people down here." So they started hiring people for the Opinions office. And they did it this way. One day I got a call from Chairman Hyde and I'd go up to his office and I'd walk in and he says, "Mr. SCHILDHAUSE:," and he had six or seven guys standing there in a row like soldiers in a line, and he said, "Mr. SCHILDHAUSE:, I want to introduce you to your new staff." These were people who had been sent over from the Republican National Committee that they hired to do work at the FCC. Well, I said, "Fine. How do you do Mr. so and so? Come on downstairs and I'll introduce you around and show you what's to be done." Of course they turned out to be really a dreadful bunch. And then there was another subsequent hiring with a similar group. So there were about fifteen lawyers like that brought in and they were terrible. They were really unsuited for the job. And little by little I started disposing of them because they weren't up to it. The Chairman at one point said something to me like, "Gee, why are we firing all these Republicans? This is not good for my image." I wasn't out to fire Republicans I was just looking for help, you know.
The pressures on me were very severe so one day he ... I think Curtis Plummer was head of the broadcast bureau then and the chairman had given instructions to Curtis Plummer that he was to make people available to me because the pressures were very severe. So I went up to see Curt Plummer and I got up there and he had written the name on the blackboard of every lawyer in the broadcast bureau. There must have been forty or fifty names up there. I guess he had them jumbled so I would have difficulty recognizing some of them or whatever. And he said to me, "Well, the chairman wants you to have your choice of people so take your choice. Who do you want?" I said, "Him, him, him, him, him, him," just like that. So I got fellows like Henry Geller...
SMITH: Not a bad choice.
SCHILDHAUSE: Herb Schulkind. I think I might have had Danny Olbaum. Anyway, I had a bunch. I had Forrest McClenning. Curtis Plummer said to me, "Why do you want him?" I said, "Well, we have a number of safety and special service cases," which were considered easy ones to handle and Forrest was a digger. Anyway, I had all those people down there. Then we started producing materials. But Rosel did not make it past that term. They yanked him out of there because he wasn't producing apparently or else there was a superior call on that job. That person was George McConnaughey. And George McConnaughey was the next chairman.
I was so eager to get out of that Opinions office ... I believe I'm correct, Strat, you're looking puzzled.
SMITH: I'm looking puzzled, Sol, because wasn't Rosel chairman during a good part of the cable television problem?
SCHILDHAUSE: Yes he was. He was chairman again in the '60s.
SMITH: All right, then. That takes care of my puzzlement. I didn't realize that one of his terms as chairman terminated and then he came back again. I didn't realize that.
SCHILDHAUSE: He was chairman for not much more than a year and a half. He was replaced by George McConnaughey who was considered more ideologically correct. I guess that's a proper way to put it.
SMITH: Well, he was certainly a Republican.
SCHILDHAUSE: Oh yes. I wanted out because that job was a terrible job. It was a terrible job. My recollection is that we were not permitted to make recommendations. You probably aren't familiar with this, Strat, but in the early '50s when the reorganization was underway there was a statute of some kind passed. I think it was called the McFarland Act or something like that. McFarland was a senator from some state in the southwest and now my recollection ... [Editorial Note: Arizona]
SMITH: Earnest McFarland?
SCHILDHAUSE: We can document this but I don't recall all the details. The whole idea in the early '50s was to get rid of the Plotkin influence. I heard talks like he was a Commie-type or whatever and so they wanted to get rid of the Plotkin influence. There was an act passed that literally got rid of Harry. I think Plotkin wanted to stay. I think he was making $9,600 a year then and he probably would have stayed forever. He loved government work. It so demeaned him when they eliminated the law department and left him with ... All the broadcast work was now gone. All the common carrier work was now gone. He was kind of reduced to being an assistant to Ben Cottone. Harry got out of there at that point. I think he went with Arnold Porter. Is that right?
SMITH: No, Arent-Fox.
SCHILDHAUSE: That may not be ... He might have gone with Arnold Porter first. I'm not sure. But anyway there was an act passed designed to separate the Commission from its staff and I think it was called the McFarland Act. Now this was forty years ago, okay, but I think I'm right. A section of that act provided that staff could not make recommendations to the Commission in contested cases. We were literally by statute not able to tell the Commission they ought to make a grant to this guy or this guy.
SMITH: I had left the Commission by that time because I don't recall that.
SCHILDHAUSE: Not that it would have made any difference, our recommendations, because these cases were decided on the basis of something other than the record, okay. I'm not the only one to say that. There are books written about it. But those were terrible years at the Commission.
So we had this practice when we would go up to the Commission of presenting the item and then the commissioners would sit there and look at each other like they were dumbfounded. If a staff guy didn't take charge of it, they wouldn't make a decision you know. So I adopted this technique of saying, "Now, one of the things you might consider is...," and everybody would wink knowingly because this was not a recommendation. So that's the way we used to do business in the Opinions office and it got to be pretty sticky and the quality of commissioners really began to deteriorate. I don't mind identifying them, they don't mean anything to me but ... You know, George McConnaughey was no star and some of the fellows who succeeded him were even worse. I heard Janice Obuchowski, who is now head of NTIA, at a recent CATO Institute luncheon start in by telling a story about this commissioner who was found dead in a flophouse with forty cents in nickels, dimes, and pennies stacked alongside him. He looked as if he had died from alcoholism and malnourishment and so forth. And he was an ex-FCC commissioner. What was the name of that fellow, Strat? Do you recall?
SMITH: From Florida ... Jerry ...
SCHILDHAUSE: No, not Jerry.
SMITH: He was the one involved in the Channel 10 case.
SCHILDHAUSE: In the Channel 10 case, right. And he was the tool of a guy named Whiteside who was an insurance broker. Well, let's get his name ... we've got to now.
SMITH: Yeah. I know exactly who you're talking about but we should have it on the record.
SCHILDHAUSE: Oh, yes. Richard Mack was the commissioner I was referring to as another one who was no star and that Janice Obuchowski mentioned had died in a flophouse. I forget where it was but she had a whole story about him. Anyway, there were a number of commissioners like that during that era who were something less than star quality.
I wanted out of the Opinions office because it was really harrowing work and it was meaningless because the record meant nothing. I have to tell you one charming story about Henry Geller who was on my staff then. One of the first cases I gave him to work on ... giving him a case meant--Hey, Henry, do channel whatever in such and such a city--and he'd have to get the dockets and they'd be probably six feet high by that time. Paper was the name of the game in those days. I'd pass his desk from time to time and I'd see Henry with his feet up working football pools and crossword puzzles. That went on for a week or so and I'd say ... Oh, when I'd give the assignment to Henry he'd say, "How much time do I have." I'd say, "Three weeks." And he'd say, "Okay." I'd come by and I'd find him working crossword puzzles with his feet up on the desk and that kind of stuff. I said to him one day, "Hey Henry, when you gonna do this case?" He said, "SCHILDHAUSE: listen, in one week I can write seventy-five pages of our drivel and no court will ever be able to get behind it." He did.
But anyway, George McConnaughey came on board and he calls me into his office. He had his rump leaning against the desk and he was pawing the ground with his foot like he was uncomfortable and he said to me ... I had made a couple of appearances before the Commission after he had gotten to be chairman and I guess I had done pretty well and so he said to me, "Listen, you are a very, very bright guy but there's something I have to do. I have to name a fellow named John Fitzgerald to your job." Well, I didn't know John Fitzgerald but I was delighted but I didn't want to say how delighted I was and I wanted out. Worse than being displaced would be having to stay on to back up the guy who was going to displace me in that nasty work. So I said to Mr. McConnaughey, "Well, Mr. Chairman, don't feel bad about this. As a matter of fact it's okay and if you want me to help you I'll be glad to stay even if I have to stay for a whole week to help break him in." He said, "That would be wonderful. You could stay for a week." So after a week I escaped that place and John Fitzgerald had it.
And from there I was made chief of television. I think I went back to renewals and then somehow I became chief of television. I forget. Jack Cole was on my staff as chief of television. He was working there.
Then in 1956 ... I was pretty chummy with...
SMITH: I've got to interrupt you. Jack Cole was working for you when I hired him away to the SMITH: & Pepper firm?
SCHILDHAUSE: I guess.
SMITH: Because he came to work for us.
SCHILDHAUSE: I guess. I wasn't in television very long but he was on the staff. I didn't get to see him much. I think he had just started. I can't remember much about Jack but he was there. When you talk to him you can confirm that.
I had also become quite chummy with a fellow named Lou Poller. Lou Poller was a UHF pioneer. He had come out of a small radio station operation someplace in Scranton, Pennsylvania, I think it was. He had gotten the bug about television and applied for Milwaukee UHF on the theory that the contest for the V's would be there forever and he could get a network affiliation and go like gangbusters with a U. And he did that. He had a CBS affiliation quickly. But then if you will recall the contested cases for the V's started to settle out. So very quickly, even though he had a CBS affiliation and was doing quite well initially ... He was the kind of a guy who knocked on doors and got people to buy converters and things like that. But he was doing okay for a while but pretty soon the V came on the air and they got the affiliation away from him and then he brought a lawsuit against CBS. One way or another I think maybe Sol Tashoff might have intervened in that case. That's a dim recollection I have. One way or another CBS gave Lou a sizable payment and he walked away from it. Lou Poller, armed with I think maybe more than a million or two million dollars in those days, which was a considerable amount of money, came to Washington, D.C. His brother-in-law and he had bought a radio station in Arlington. In those days it was WARL--today it's WAVA. His brother-in-law, Sy Blumenthal ran WARL in those days. Lou Poller hung around Washington trying to establish himself as a power broker of some kind. Now WARL in those days had some people working there who you will recognize. One of them was Connie B. Gay. In those days they called those fellows hillbillies. Now they call them country or something else. Connie B. Gay was the kind of guy who had a program. He had a big following and a lot of advertisers following him. There was an uneasy warfare between him and Blumenthal. Sy Blumenthal is one of these guys who was always trying to cut costs and make something out of WARL and I guess they did. But Connie Gay was the spark plug there. Connie had Jimmie Dean working for him. They used to open up new Giant food stores here. Jimmie Dean, for fifty dollars, would have two or three violinists and a plucker of some kind. They'd stand on the sidewalk with flags and bunting and so forth. It was that era, okay.
Lou Poller had a house and Sy Blumenthal, his brother-in-law, also had a house at the end of 16th Street right before it becomes Montgomery County. It's a very well known part of town and the houses are very lush. They were considered really plush houses in those days--the middle '50s. They are still plush houses but the neighborhood has turned all black. Poller and Blumenthal had these beautiful houses. And Poller, trying to become a powerhouse, started doing a lot of civic stuff. He also took an office across the street from the FCC in that building at 13th and Pennsylvania Avenue. It was Lou Poller something. He was all by himself and I don't think anybody knew he was there. But he took to calling me almost every day. "Come on over here." I'd go over at eleven and I'd have doughnuts and coffee with him. He announced to me one day that he was going to go to the Democratic Convention. A guy named Estes Kefauver wanted him to be the financial director. I think it was because they recognized Lou as a sucker--a guy who wanted to get into power--and he gave them $75,000 and they said, "Gee, this guy is for real." So he became one of the Kefauver team, okay.
Now, backing up a little bit, as part of his power play, he decided that he had this beautiful house and he was going to invite Washington big shots to his house. So what he did was he started a bunch of Wednesday night dance sessions at his house where everybody was going to learn to do the cha-cha-cha and the merengue--all those dances that were becoming popular in those days. So we had a bunch of regulars who went there every Wednesday night. They had a dance instructor named Pedro from some Jewish country club in town here. Pedro knew the shtick, you know. We'd go over there and we'd dance for an hour or two and tell some dirty stories and then sit down and eat and drink and have a good time. There were people who were part of that. I was in it. Commissioner Robert Lee was in it. Mike Feldman, you know Mike Feldman?
SMITH: I knew Mike by name. In fact Milt Shapp introduced me to him once.
SCHILDHAUSE: Mike later was a powerhouse at the White House with Kennedy and with Lyndon Johnson. He is now a partner in Ginsberg, Feldman & Bress. A powerful law firm in town. That kind of a bunch. We did that night after night.
Well Poller and I, because he kept calling me at eleven and I'd go over to his office two or three times a week and have coffee and doughnuts with him, we got pretty chummy. I was about the only big shot he knew in town and I wasn't a big shot. One day he said to me, "Look, you're a friend of Roy Hofheinz." I had gotten to know Roy Hofheinz through Jim Barr. Roy Hofheinz had been the mayor of Houston, Texas. He later built the Astrodome. He might have owned the Astros but he was a radio broadcaster. He was a very colorful guy and he loved baseball games. How I got to know him was I was pretty chummy with Jim Barr. Barr and his wife, Maxine, had been childless and were interested in adopting children and Roy Hofheinz had been instrumental in finding two children they finally adopted. Somehow, Barr was an ex-Texan and Maxine was a Texan and they got to know Roy because Hofheinz had come up here pleading his radio cases and so forth and so on.
SMITH: Would you identify Barr for the record?
SCHILDHAUSE: Barr was an old-timer at the FCC. He was subsequently chief of, I think, the Safety and Special Radio Services Bureau. I think he was deputy chief of the Broadcast Bureau at one time. But he had a number of big jobs. He's an engineer. A kind of a solid citizen. Now retired--still alive.
So I got to know Roy Hofheinz that way. Hofheinz was a baseball nut. I liked baseball and I occasionally went to baseball games with him. I remember distinctly one game in which ... he would never leave before the end of the game. I remember one game in which the home team was ahead by five or six or seven runs--it was a lock--and it started to rain like crazy and we were out there in an open box and he wouldn't leave. Even though the game was technically over. I got soaked to the skin and I remember that little episode.
Anyway, to get back to Poller. I'm in his office one day ... now the 1956 convention's coming up and he's now some kind of a financial chairman for the Kefauver for President Committee and he asked me to call Roy Hofheinz. Well, I didn't particularly know Roy Hofheinz that well to ask him if he wanted to be the Texas director of finances for Kefauver. So I couldn't say no and show that I didn't have this kind of stroke and power and so I swallowed hard and dialed Roy Hofheinz. It was early in the morning because he's in a different time zone. I dialed Roy Hofheinz and I obviously had awakened him out of a sleep. He came to the phone and he said, "What do you want?" I said, "SCHILDHAUSE:." And he said, "How the hell are you," or words to that effect. "What have you got in mind," he said. I said, "Roy, how would you like to be Texas finance chairman of the Kefauver for President Committee?" He said, "How would you like to go perform an unnatural act?" And I'm translating, okay.
Anyway, soon after that Lou Poller decided that he was going to do something for these people who had been nice to him like SCHILDHAUSE: and Mike Feldman, who was called Big Mike by everybody. I think Mike was working at the SEC in those days. Well, I may be getting ahead of myself. I think I am. They went to the Democratic Convention. At the Democratic Convention Estes Kefauver made a brief run but never got far. But a guy named Kennedy surfaced for the first time. Mike Feldman came back and immediately tried to get a job with Kennedy's office and did. And so Mike was working as some kind of an assistant in John F. Kennedy's office. Kennedy was a senator. Then Lou Poller decided he wanted to do something nice for these young fellows who were helping him and being so nice to him. There was SCHILDHAUSE: and Mike Feldman and he also had a young fellow who was the son of an old friend of his from Pennsylvania, Arnold Lerner. He said, "We're going to buy a radio station and you guys are going to go into it." So we bought KOMA in Oklahoma City. It was a 50,000 watts station. In 1956 I remember we bought it. It was agreed that I would go out to manage it. So I quit the FCC and I went out to manage the station. By the way I have to tell you this. Mike Feldman who probably counts his money in millions today because he owns some of the more prominent landscapes around Washington, D.C.--apartments buildings and things like that--and is a powerful guy. In those days we had to produce a balance sheet for the guys who were going to be participating. So Mike Feldman drew up a balance sheet of $18,000, $16,000 of which represented--gee I can't recall but he had absolutely ... His only equity was $2,000 owed to him by a book publisher in Philadelphia and I think he had maybe a thousand or two thousand dollars in a small house he owned on Rittenhouse Street that I think he paid $18,000 for. I don't know why I remember that but I do. So one way or another we had to cook his balance sheet.
But I went out and I ran KOMA and it didn't work out because I found some of those people quite distasteful. I don't want to identify them but it didn't work out. I came back after maybe six or nine months.
I've got to tell you one story about our dance experience. In 1956 Richard Mack and John Doerfer were on the Commission. I think Doerfer might have been chairman but I'm not sure about that. This is a charming story.
SMITH: Unless I'm wrong, Sol, Doerfer was always chairman when he was on the Commission. I don't think he was ever just a plain commissioner, was he?
SCHILDHAUSE: Well, it says July 12th but this book is [TV Factbook]... He probably was chairman then, okay. I think he succeeded McConnaughey. Anyway, so we decided one night after all of our dance lessons we were going to go out and try it in public. So we went down to the Mayflower where they had a little room where they had dancing in those days. We sat down at a table at the Mayflower. Now there were the Pollers, the SCHILDHAUSE:s, probably the Feldmans--I forget who else was there. Not Bob Lee but there were some other folks there. We were sitting around the table. I go out on the dance floor. I forget who I was dancing with, my wife I guess. I look around and right along side of me was John Doerfer dancing on the dance floor. He's got this tiny little cigar clenched in the center of his mouth between his teeth and the smoke is drifting up into his nostrils and eyes and his eyes are half closed. He's dancing with this quite young female person and he's doing a lot of kind of raunchy type dancing--kind of dragging her around. I get back to the table and I say, "Hey, you know who I met on the dance floor--the chairman of the FCC." I didn't get along too well with John Doerfer because somebody had told him that I had said something unflattering about him. I can't remember whether I did or not. He was always ragging me about it every time he'd run into me. Anyway, he didn't see me on the dance floor because he had his eyes half closed and he was having some kind of a moment with this female person. I get back to the table and I announce that the chairman of the FCC is on the dance floor. Lou Poller, boy he was eager. "Let's get him over here." Well, I look over to see where Doerfer is and he's sitting at a table with Richard Mack and another female and a sponsor. You could tell it was a sponsor, okay. I didn't quite know what to do but I waited a while and Doerfer was out on the dance floor. Again I go out on the dance floor and I say, "Mr. Chairman, come on over and join our party." "Oh yeah, sure, sure." And he goes over, he drops this female, and he comes over all alone and he sits down next to my wife, a real good looking woman I tell you. And he says to her, "What are you doing with a nasty person like him? Why are you married to him?" ... me. And he goes off at length being cute and flirtatious and all that unseemly stuff. At which point ... all the guys at the table are lapping this stuff up. He's the chairman, big shot like that. At which point I feel a little pressure on my shoulder and I look up and it's Richard Mack standing there looking down on this scene at Doerfer and he's half in the bag and he's saying things like, "Let's get out of here you dumb Dutchman. Let's get out of here you dumb Dutchman." I don't know why that story sticks with me but it does.
So I'm back to where I was in Oklahoma City and that didn't work out and I came back after six or nine months. That was the end of 1957, a year later, and I'm back in Washington, D.C., looking for a spot and the only place to go is the FCC. I'm staying at the Raleigh Hotel--it's gone now--but I was staying at the Raleigh Hotel for a few days looking for a connection and I get back and go in to see Doerfer. He says, "Well, I'm not so sure. You said some unflattering things about me..." Well, one way or another, I got taken back after a couple of days and that's how I got back to the FCC.
SMITH: What position did you come back in?
SCHILDHAUSE: I came back and I worked in Rules and Standards with Lou Stephens and who was that tall guy from Minnesota? You remember him-- Hart Cowperthwait.
SMITH: Hart, yes. Hart was an engineer.
SCHILDHAUSE: Hart was the head of that division. Lou Stephens worked for him. Lou Stephens is still around. Last I heard of Lou Stephens he was working for Vincent Pepper. I'm not sure that he's still there. I just don't know. We were working on ... Cowperthwait was kind of a ceremonial head of that office. Stephens was the guy that was running it and Stephens and I, of course, got along famously. We were doing pay television. That's how I eventually got to represent the Commission at the first major trial in Hartford, Connecticut, over WHCT, I think.
SMITH: Why don't you describe that a little bit, Sol. I made a note when you mentioned it off the record this morning that I'd ask you to say something about it.
SCHILDHAUSE: Now that television was becoming a force in our culture because by the middle or late '50s there were more stations on the air and more being activated all the time, it suddenly dawned on somebody that you could do other things with a signal besides broadcasting. That is, you could sell programs on a per program basis. All you needed was the proper scrambling equipment, the proper boxes to unscramble and that kind of thing and you could have a pay-per-view thing. I'm not the great expert on this but I think that the impetus for this was mostly Hollywood. I think the broadcast establishment didn't quite cotton to subscription television and I think as a result they held it off for a number of years because it could have worked much sooner than they got it to work. They held it off long enough so that it died. It was superseded quickly by something else like cable television. But subscription television never got off the ground. It was killed by the FCC at the urging of, I think I'm right on that, at the urging of the broadcast establishment. But there was this test in 1960 and I went to it. I think it was 1960 but it could have been as late as 1961. Newton Minow was the chairman. I can't remember who was President. Must have been ... 1960 who was President? Could it have been Kennedy because Minow was appointed by Kennedy wasn't he ... or was he?
SMITH: Yes, I think he was.
SCHILDHAUSE: '56 was Eisenhower again against Adlai Stevenson so 1960 was a Democrat. Who was the Democrat? Could that have been Kennedy? It might have been Kennedy '60 ... '64. Yes, it was Kennedy in 1960, yes indeed. So it must have been 1961 because Minow was appointed by Kennedy, I believe. It must have been '61 I went up to that meeting in Hartford, Connecticut, and watched the exhibition of pay television--subscription television.
SMITH: Do you recall for the record who was the licensee of that station?
SCHILDHAUSE: I really cannot.
SMITH: Was it an RKO General station?
SCHILDHAUSE: No, I don't think so. I may be wrong. We can find out. It's easy to check.
SMITH: I'll check it. I thought it was. But you could be right.
SCHILDHAUSE: If I went over the books it would come flooding back to me. I just can't remember. I do remember that story I think I told you, Strat, of how they had hooked up a couple of dozen homes and they wanted to go visit these homes after the showing. The film shown was "Sunrise at Campobello." I think that was the name of it. We were going to visit some homes to see what their reaction was to this. The first home we went to it was agreed they would introduce me as somebody who was with the subscription television group or with the television station. We got to the door and were introduced around. They introduced me as SCHILDHAUSE: and this woman said, "Oh, I know who you are. You're married to Phyllis Sydell from Providence, Rhode Island. We met you last year on the beach at Narragansett." So that blew that cover but it didn't make any difference.
Let's see, where are we now?
SMITH: Well, we were tracking your career through the FCC.
SCHILDHAUSE: I'm up to 1961 now. In 1961 I got out of Rules and Standards where we did subscription television and I got into hearings. I don't remember how that happened except that my friend Bob Rawson, whom I have known for a long time, was head of that office and he was kind of delighted that I was coming in. So that's what I did. But I got there and I was kind of unhappy. I was trying to maintain a very low profile and somehow that displeased Rawson. You know, I think I've got it backwards now. Let me retrace my steps, okay. When I came back from Oklahoma City I went into the hearing division with Rawson because we were old friends. Having come back from that broadcast experience, I was wanting to maintain a very low profile. For some reason I crossed swords with Bob Rawson who was really a very old friend of mine. We just had outgrown each other and we did not get along too well. Bob wanted to get rid of me and he actually made a complaint to Harold Cowgill who was head of the broadcast bureau in those days. He told Harold Cowgill that we weren't getting along and he thought I ought to go some other place. So I moved from there to Rules and Standards. That's how I happened to get with Cowperthwait and Stephens. I was in Rules and Standards clear up until 1963 when something else happened to me. Okay. I did well in Rules and Standards with Stephens. We got along fine there.
In 1963 I was named ... I had been trying to become a Hearing Examiner for a long time. I figured my career, after my episode in the broadcast business that didn't pan out all that well, I now had a few dollars--I'd made about $50,000 there--and that was a lot of money for me and I could ride out my days in the civil service. I didn't want to do anything more than that and this was a great job. A Hearing Examiner job looked to me like a perfect job. Not a lot to do and not many people to supervise and a certain amount of prestige and the work can be sometimes interesting, okay. I had been trying for a long time to get that job and they had been turning me down for reasons that were just silly. The FCC wasn't turning me down. I think it was the Civil Service Commission or whatever they called it then. One way or another I made it in 1963. That was a very nice period for me. I had immediately Jim Cunningham who was the Chief Hearing Examiner in those days...
SMITH: He was known as Colonel Cunningham wasn't he?
SCHILDHAUSE: Yes. It turned out that ... we found all this out later ... he had an eyesight problem, Cunningham did. He would take some cases himself but he would always have somebody else do the writing for him and he put them out over his signature. Some of the old-timers who had been doing this for him were kind of disgruntled and unhappy with the situation. So when I came on board he spotted me and he asked me to do the first case. It was a major case with two dozen issues having to do with patents and exchange of stations between Westinghouse and maybe the Ford Motor Company. I forget ... Philco, Ford, or ... for some reason I remember those names. It was a very complicated case. I did it and I did it very, very well. It came out over Jim Cunningham's signature. He was very grateful to me and I remember he gave me some gifts. It was a G.I. issue briefcase, which he got from the supply room. In a subsequent budget meeting he told the Commission I was the best Hearing Examiner he had which I thought was kind of puffing it but it didn't displease me.
I did that until 1966 and sat on cases and similar work. I had a reputation for doing very good work and I have a fairly decent writing style for a lawyer. I'm not a great writer but for a lawyer it's pretty good. It attracted the attention of some people like Henry Geller and Joel Rosenbloom who were then powers in the Commission. I think Henry Geller was the general counsel. Rosenbloom, yes, I think he was in the office of either Newton Minow or Bill Henry. When Bill Henry left I think Rosenbloom moved into Hyde's office, perhaps. I can't recall all this. But both those guys were powerhouses in the Commission.
In 1966 there was a special event. I had been a Hearing Examiner for three years. In 1966 the Commission adopted the Second Report and Order. There are a lot of Second Reports and Order but this was the Second Report and Order in the cable television field.
SMITH: Sol, we're out of tape again. It's a good breaking point because now we get into your career in cable.
SCHILDHAUSE: It gets interesting.
End of Tape 2, Side A
SMITH: This is Tape 2, Side B of the oral history interview with Sol Schildhause in his office in Washington on November 7, 1991.
Sol, in our previous discussion we had just gotten to the year 1966 in your career at the FCC. Which is, I believe, the year that you became active in cable. Would you like to pick it up from there?
SCHILDHAUSE: Yes, that's correct. In 1966, I think it's fair to say, I was a respected member of the Hearing Examiner corps and I think I had probably attracted the attention of fellows like Henry Geller and Joel Rosenbloom. I had also been very, very quiet. That's true of most Hearing Examiners or Administrative Law Judges, as they call them today. In 1966 the Commission had finally taken jurisdiction over cable. They had dabbled with it off and on probably for a little over fifteen years. Only in the last couple of years, up to 1966, had they seriously thought of doing anything substantial with it. But in '59 when it came up they had rejected it as something that they had no jurisdiction over. Over the years every time they looked at it again it was always at the request of somebody in the broadcast business. Because certainly in some small markets cable television began to look-- even in its infancy--began to look like a menace to small market television stations. The Commission took a look at it and generally came up with the answer that this was not something that it had any jurisdiction over. There was no scarcity of spectrum involved. It didn't have the attributes of broadcasting where you could make a claim for government regulation because broadcasting was characterized by scarcity of channel space and cable was not. There was no shortage of spectrum on cable. There was no shortage of cable. So the Commission had stayed away from it. But they were slowly being driven to it. And in the administration of Bill Henry, which I think probably lasted until 1964 or '65 somewhere around there--I can't recall exactly--they began to take a more serious look at it. In '65, I think, they began to apply some restrictions to cable in handing out the microwave frequencies and so forth. It looked like by 1966 it was pretty clear that the Commission was up to doing something about it. In 1966 with the Second Report and Order they took over regulation of the cable industry. Took it over pretty much completely. So that's kind of a noteworthy mark in the history of cable television--1966 with the Second Report and Order.
What they did there was they adopted a set of rules designed to keep cable out of the major markets; and oddly to kind of give it free reign in the minor markets. Odd, because initially the Commission's attention was attracted to this whole phenomenon by the small market guys. But once the big market guys got onto it, they were able to move the Commission. So the Commission's rule said that before you could bring a new cable television service into a major market--one of the top 100 major markets and those markets were identified--you had to prove at a hearing that the cable television in the proposal under consideration plus all other potential cable television in that market would not jeopardize the viability of existing television in that market or the potential for UHF television in that market. Now just think about that. First off, the hearing process at the FCC to that point was interminable. Once you got into a hearing you were there for a good part of your life. Secondly, you were being asked to prove an issue that's impossible to prove. Just think about it. Most cable systems in those days starting out, they didn't know what to look forward to. They were thinking that 5,000 subscribers would be kind of a good-sized cable system. At five dollars a month that's no big deal. You were going to have to fight a number of television stations in the market with major pockets full of money. Just think about that issue. How do you prove an issue like that? It's like proving negatives. It's hard. How could you tell, for example, what potential for other cable was in that market? What other towns would find an entrepreneur that would be willing to do this? How could you prove what kind of UHF might be energized in the future? How could you deal with that kind of thing? It's the sheerest kind of speculation. But think about it.
SMITH: How can you ever prove that something isn't going to happen?
SCHILDHAUSE: You can't. But think about this. Scholars looking at this thing would say, "Isn't that wonderful. That's just what an agency is supposed to do. You're supposed to have a hearing every time you have a question." So the Commission had the best of all worlds going for it. They were serious. They were going to investigate at a hearing. Well, of course, it was the most cynical kind of thing. When I finally got to understand what this was all about, when I recognized what it was about, I just was absolutely appalled by it. So they dumped this on the cable industry and the first thing that happens, of course, is that very few people wanted to endure one of these hearings because it was clear they weren't going to win them because their lawyers told them that. So what happened was the Commission was flooded with petitions to waive the hearing requirement. That became the application. The petition to waive became a pending application. Not the proposal to get into the cable business and go through a hearing but the petition to waive the hearing requirement. Now those things began to pile up. Now who had jurisdiction over this? The broadcast bureau, okay. There was no cable force at the Commission. So it occurred to some of the clever people steering this that what they ought to do is create something they could show to the world as a serious effort to deal with this. Some independent group or some group that could not be pinned as not being independent. So they looked around and, I'm not sure about this but I believe this as if it were gospel, that I was chosen by Henry Geller and Joel Rosenbloom because I was kind of a quiet person and I was a judge. Nobody knew what I stood for at that point. All they knew about was the recent stuff I had been publishing and it was pretty good for government work.
So August 1966 I was in my home about to take a camping trip to Quebec with one of my sons. I was busy sewing up a tent in my kitchen when the phone rang. It was a hot August day and it's Chairman Hyde on the phone. Now Hyde was chairman again. This was after Bill Henry. Of course, you know how Hyde is--a very straight, very proper person--and he said something like, "Sol, the Commission in its infinite wisdom would like for you to be head of something called the CATV Task Force which we have just established." I said, "Well, what's that?" I didn't have any idea what he was talking about. He said, "We have this task force we're setting up ... and we'd like for you to be head of it." I said, "Gee Mr. Chairman, I've had grunt jobs all my life and I'm at a very happy spot now. I don't particularly want to get back into grunt work anymore." He said, "Sol, we need you..." and on and on. I said, "Well, I'm about to go on a vacation, Mr. Chairman. I'm going on a camping trip. When I come back in a week or ten days I'll let you know." He said, "No, no. We've got to know today." So I said, "Mr. Chairman, let me think about it. I'll call you back." So I got on the phone and I called Commissioner Bob Lee and I said, "What do you think about it?" And you know Bob Lee, he said, "Aw kid, who knows. It will probably be okay. I'd think about it." Then I called Bartley and he said, "What do you want it for?"
SMITH: For the record, FCC Commissioner Bartley.
SCHILDHAUSE: Commissioner Bartley. He said, "What do you want it for?" Then I said, "Gee, this isn't helping me any." So I called up Mike Feldman at the White House. Mike was in the White House then with Lyndon Johnson. I wasn't very close to Mike. Remember I was with him in that ill-fated operation in Oklahoma City--KOMA--when we bought the station.
SMITH: And in the dancing classes.
SCHILDHAUSE: In the dancing classes. I said, "Hey Mike, what about this?" He said, "Gee, what do you need it for?" I said, "You're right. That's what I'm saying." He said, "Well look, I'm having lunch with Commissioner Lee Loevinger and I'll ask Lee and I'll get back to you. I'll ask him what he thinks." So I wait until two or two thirty or so and the phone rings and Mike's calling me back and he says, "Listen, I talked to Lee. Why don't you take it? You might make something out of it." That's exactly what happened. So I called Hyde back and I said, "Okay." He said, "We're going to put out a press release this afternoon." I said, "Okay, but I'm still going away on vacation." He said, "Sure." So that's how it happened. Exactly how it happened. So I was head of the CATV Task Force.
SMITH: Did you have to give up any tenure as an Administrative Law Judge?
SCHILDHAUSE: No. That's an interesting question, a good question. Remember it was called the CATV Task Force. Just think of what task force signified. It was an expeditionary force. We were to go in, attack the enemy and retreat and that's it, right?
SMITH: Unless you get sunk.
SCHILDHAUSE: A one-shot deal. I was detailed. That was interesting because it gave me a lot of strength that I might not otherwise have had. It gave me leverage. They couldn't really do anything to me because the last ... they just never move against administrative law judges. You know the judiciary--you have to impeach them to get them out. So anyway, I was detailed to this ... (INTERRUPTION FOR TELEPHONE CALL)
So anyway, I came back from the camping trip and I look at what the staff is like. They had a staff set up. The staff consisted of personnel contributions from each bureau to make up this new group. Expectably what the bureaus did was they gave away the people who didn't fit their environment. Some were really quite good but for one reason or another didn't fit in with the personality of the bureau that was wanting to transfer them. For example, Gary Christianson was one of them. [Editorial Note: Christianson subsequently became General Counsel to the National Cable Television Center.] Stan Kaufmann was another one of them. Stan is a very good man. Jack Mayer was another one--a pretty good guy. We had a number of people who were pretty good. Steve Effros ... no I hired Steve Effros off the street. [Editorial Note: Steve Effros subsequently became the General Counsel and President of the Community Antenna Television Association.] For the most part they were a rag-tag bunch. But we also had some good guys. If you remember having observed the Commission all these years, it's always been the case that a half dozen staff guys there make that place go and most people just drone on, drudge on day after day. Never hurting anybody but not making any great contribution. But a half dozen people always. If you think about the whole history of it, going back to the Plotkins and the Gellers and so forth, it's a few guys. So I was pretty lucky. I really had a nucleus. I started to hire people. I got very good people. I got Bill Johnson who is still at the Commission. (INTERRUPTION FOR TELEPHONE CALL)
I think I was saying that I thought we had a good nucleus and that having three or four or five good people on a team was probably enough to make a decent contribution to the dialogue. Right after that I started hiring people. I hired Bill Johnson who is still with the Commission as deputy chief of the Mass Media Bureau, who later, by the way, succeeded me in the Cable Bureau. The task force later became the Cable Bureau. Steve Effros, I hired him because I had been told he had New York Times experience and I thought that would be good. Whether it was good or not I don't know but Steve turned out to be very useful. I had Bob Unger from another part of the Commission. I had known Bob because I knew his father pretty well. His father was a lawyer with Edward Bennett Williams. I also hired Bob Baker who was Phil Baker's son. Do you remember Phil Baker? He was...
SMITH: I remember Phil Baker. [Editorial Note: A communications lawyer practicing before the FCC.]
SCHILDHAUSE: And I hired a fellow named Abraham Lieb who turned out to be very valuable. He, too, is still at the Commission. Johnson, Lieb, Unger, and Baker--they're still at the Commission. Anyway we had a pretty good nucleus going in.
What we started to do was we started to attack that backlog of applications. If you recall, the applications were applications to waive the hearing requirement. It wasn't long after I got there in 1966 that I began to realize that I was probably being used or the institution was using me. That they expected me to be supine, let nature take its course. Which means let time drone on until some other episode intervened to save the Commission from having to resolve this problem. And that I was being used because I was a respected member of the judiciary over there if I may use that word to describe the Hearing Examiner corps. I began to feel kind of offended by this. The language emanating from the Commission, all of their public utterances were that the institution was geared to promoting the development of cable television. So I began to take that as a cover for me. So I decided to go out and start developing, advancing the course of cable television. I sensed that it was not the kind of cue I was supposed to be reading from the signs around there but I thought that I couldn't be faulted for it because the institution was itself indulging in that kind of rhetoric to advance the cause of television. So I began to steam our team up to get involved in trying to free up some of these markets that were pretty well frozen in because they didn't want to go through hearing; and we weren't acting on the petitions to waive hearing. So we started acting on them. And I discovered that I had enough goodwill in some of the offices on the 8th floor, which is where the commissioners traditionally reside, that I could go up there if I had a particularly appealing case and persuade a majority of them to vote for it. Vote for granting a waiver. And so here and there I would have a win. Most of the time when I went up to the Commission with a recommendation for a waiver I got bloodied and got a majority against me because the Second Report and Order was meant to be a freeze and we were supposed just to move papers around and not accomplish anything of great note. But because I had decided I was going to run with this thing and because there seemed to be nobody there to stop me ... because Rosel Hyde was a gentle man, a gentle chairman and because I was only on detail from a very secure job ... I seemed to be able to get away with some of this stuff. So I began to win one here and there and this began to displease some of the commissioners especially Commissioner Kenneth Cox, who is a very fine guy, a very bright guy, a hardworking fellow and I know he's as honest as can be. But my experience with Commissioner Cox was that he was a fierce competitor himself and he had earlier, I think maybe in the late '50s, been engaged when he was practicing on the West Coast to come East for a stint with a committee that Senator Warren Magnuson headed up to look into this whole business of television and some of the auxiliary services. He had written a report, which I haven't seen for years, I know it's around however, in which he had held out little hope for cable television as a major influence in the television business. My certain impression now is that when he was on the Commission he was dedicated to making that prophecy come true.
SMITH: Just to identify it for the record, Sol, the committee was the Senate Interstate and Foreign Commerce Committee. Washington State Senator Warren G. Magnuson was the Chairman of the committee and Cox was Special Counsel for this particular investigation.
SCHILDHAUSE: All right. I'm glad you reminded me of that. I haven't seen that for years and I just am pulling it out of memory but I know it's firmly ingrained in me.
SMITH: It's called the Cox Report. This will be an interesting story and perhaps you know it and it may have slipped your mind. It is not a Committee Report. It's a Staff Report. The Committee did not adopt it as a Committee Report. I understand that Robert D. L'Heureux, who later became General Counsel of the NCTA, and still later a law partner of mine, was responsible for talking the Committee into issuing it as a Staff Report instead of as a Committee Report. But that's the report you're talking about.
SCHILDHAUSE: Yes, that's the report I'm talking about.
SMITH: And you're the narrator, I'm not, so I'll let you go on.
SCHILDHAUSE: No, that's fine and you're right, I did know Bob L'Heureux. The performance of the task force, and mine in particular because it was pretty clear that I was the leader of this group ... by then I was starting to get out into the cable universe and made a lot of speeches encouraging this group. I began to believe that cable television was going to be a big force. I really did believe that. I sold myself on it from what I had seen. I knew that people were in love with television because I was in love with television and I had watched it emerge. I was raised on radio and when I first saw television I couldn't believe how wonderful it was. I stood in front of store windows and watched television for the masses. I did all of that and I was firmly convinced, as head of the Cable Task Force, that television was going to be a big factor and that the way to watch it was going to be cable. I believed that then and of course I think I've been proven right. I believe it even more today that we're still in the early stages of cable and it's here to stay.
I started running with cable and encouraging the industry. Telling them that things were going to be better and that we were going to move them out of the freeze at the Commission and what have you. And here and there I began to win one at the Commission by just getting some people on the 8th floor to agree with me on a good case here and there. We did not cheat. We did not dissemble. We told the Commission the honest truth every single time. We were absolutely straightforward. But we were advocates for cable television and we took the Commission seriously because the Commission kept saying, "This is not a freeze and we want cable to evolve. We wanted to develop cable." So I was in a quite impregnable position.
Except that this infuriated Commissioner Cox. And infuriated is not an overblown word. He really was angry. Early on when we had a successful Commission meeting in which we had freed up a couple of markets where we permitted a cable system to get started in a market by granting a petition for waiver, Commissioner Cox came up to my office. Now it was early on because it was in the Old Post Office Building before we moved to M Street. He came up to my office and we chatted for a few minutes in my office civilly. I didn't know him too well and I was always quite respectful of commissioners. I'm respectful of the office and the symbol of the office. I did not know too many of them all that intimately. I just responded to casual talk and then we walked out to the water fountain, as I recall, and he said to me, "You know, Sol, you're supposed to look busy not be busy." That is verbatim. "You're supposed to look busy not be busy." And he laughed nervously. Commissioner Cox had a habit of doing that. He does laugh nervously when he's uncomfortable. And I said, "Oh, come on," or something to that effect. I said, "Don't take this stuff personally." And he said, "I may lose a battle but I don't lose wars." And I said, "Well, Commissioner, look I'm in this thing not because I asked for it. I was pressed into this service. I didn't ask for this job." And he said to me, "Well, would you like to get out of it?" I said, "Yeah, how could I do that?" He said, "Why don't you go tell the old man," which was Rosel Hyde, "tell him that you're not up to it." You see I had had a heart attack in 1965. When he said that to me I really got quite infuriated because I didn't feel sick. I had gotten over my heart attack by then and I was kind of a very energetic fellow. I didn't say anything more but I determined then that I was going to stick it out. And I did. The relationship between me and Cox got worse as the years went on. I forget now when he left. I think he left maybe in 1970. I'm not sure of that but it's close. But before he left, he made a serious attempt to have me fired. Let me tell you about that if I may.
SMITH: Yes, please do.
SCHILDHAUSE: He prevailed upon Dean Burch ... he told Dean Burch that I was out soliciting a spot away from the Commission so that I could leave the Commission. Making use of my office and my connections to find a place in the cable industry or something. I never quite knew what he said but it was something like that. So Dean Burch said to me, "Cox has leveled a charge against you." Dean was that kind of a fellow. By the way, I never called him Dean I always called him Mr. Chairman. Dean said, "I think it's only fair that we air this so that it doesn't fester." On reflection I think Dean Burch should not have done it quite that way. He should have protected me and said that's a bunch of stuff. But he didn't do that. Dean was that kind of a fellow. He ran a very, very open agency. He's a wonderful fellow and was a wonderful chairman. So I got summoned down to this special Commission meeting. I walked into this Commission meeting room. By that time we were at 1919 M Street. There were all seven commissioners sitting up there and I was all alone in that room sitting in the dark as it were. I sat there nakedly and the chairman said, "Now, Sol, we called you here because Commissioner Cox has a matter he wants to raise with the Commission. So, why don't you have at it, Ken," or something like that. And Ken in very sober tones, he spoke very carefully, "Well, I want the Commission to know that it has come to my attention that SCHILDHAUSE: is out there soliciting..." blah, blah, blah, "and I'm told that he's even trying to get the job as head of the NCTA," and on and on he went this way for a few minutes. Then he stopped and the chairman said, "Well, what do you say, Sol?" I had made up my mind that I was not going to get defensive and so all I said was, "Mr. Chairman, that's quite untrue. I deny it." Period, that's all I said. At which point the commissioners started going at each other. It ended up with Commissioner Nick Johnson coming to my rescue. I swear that is how the meeting broke up. But we went on for about a half hour or so with whoever else was on the Commission.
SMITH: Bob Lee was certainly ... He was always on the Commission.
SCHILDHAUSE: Bob's a good friend. He never gave me any trouble. But Nick Johnson, who by this time was beginning to turn in my favor on the big cable issue. Well, let me tell you what he said. He finally ended up saying, "Ah Ken, come off it will you. Aren't we always all of us out there trying to find out what we're worth in the market? I know I'm always trying to figure that out and I bet you are too," or words to that effect. That just broke up that whole meeting and that was the end of that little session.
Now Nick is an interesting guy. Early on, as a younger man and maybe still today, he certainly was your true Ralph Nader type. Very suspicious of people in commerce and very suspicious of people who dealt with money and that kind of thing. The profit motive was something that was suspect, etc. So he looked around at the Commission and the only guy who spoke in tones that resembled the kind of tones that Nick was familiar with was Ken Cox. So whatever Ken said he went with. If Ken took a position, Nick went with it. Nick was really a pain in the neck early on to me consistently voting with Cox against me.
Well he began to learn that there was a lot going for my position and he started throwing his weight in with me. We became pretty good friends towards the end. He was the guy who broke up that meeting. Nick, of course, at the end was beginning to push cable like crazy except that he wanted cable to give more away for free than perhaps was warranted. At the end, there was a very nasty set-to between him and Dean Burch when that final freeing up report of 1972 was finally adopted. And that's in the history books and that ought to be certainly incorporated one way or another--that exchange between...
SMITH: That we are and I want to get as much of it on the record from you as we possibly can. We can progress up to that time.
SCHILDHAUSE: Let me interrupt for just half a moment while I get a book.
SCHILDHAUSE: We were talking about the growing gulf between me and Ken Cox. I have to repeat again that I really like Ken and admire him. He was my boss. At one time before he was head of the Broadcast Bureau and I wrote some big documents in those days. I can't recall which one it was. It might have been a Westinghouse GE license renewal, I think, after their antitrust difficulties. There was a very, very big job that I worked on very hard. It was forty or fifty pages long and it had a lot of carefully worded footnotes. I turned it into Ken and he read every single word of it. He checked every citation and he came up with about one or two minor changes but he obviously liked it. We talked about it and I was impressed with his diligence and his knowledge and with his fairness about the whole thing. So I have respect for the guy but in cable the relationship between us just deteriorated badly. It got so bad that finally in 1970 a case came up and it was titled "Color Cable, Inc." It can be found at 25 FCC 2nd beginning at page 195. A Memorandum Opinion and Order was adopted on August 7, 1970, and released on September 8th, approximately a month later. We brought off a win for a number of cable systems in that case. It wasn't any earth-shaking thing except that Ken was furious about it and wrote a dissenting statement that went more than five pages long. It was full of hand wringing and whining and railed against the majority of the other six commissioners. And finally concluded with this paragraph which I think says a lot about our relationship. He said, and I'm reading now, "The field of cable television has interested me greatly during my years at the Commission." Now this is the concluding paragraph of this statement. "I was first distressed by the agency's disinclination to assume responsibility for this important aspect of communications. Then I was heartened by the adoption of rules which sought to deal with the most urgent aspects of the problem." Parenthetically, let me say he was heartened by the adoption of the freeze ordered of 1966.
SMITH: Second Report and Order.
SCHILDHAUSE: Second Report and Order. "Later I was concerned by the administrative muddle of hearings and backlogs in which we became involved." Of course, the muddle of hearings and backlogs was imposed by the Second Report and Order. I say that parenthetically. "Later still I was encouraged by the possibilities of cable origination and other diversification of program service." Parenthetically, let me say that they did, just before that, impose on the cable industry a requirement to originate. If you had more than 3,500 customers you were required to originate to a substantial extent or words to that effect. It was about that vague a standard. I always believed, and I still do, that it was imposed on the cable industry just to punish them. Because they were in no position to do originations back in those days, okay.
SMITH: I'm not sure, if I may interpose this remark, just what right the government had to require them.
SCHILDHAUSE: Let me say just one other thing. I'm glad you said that. Never in the years I was there handling cable from '66 to '74 did I ever hear anybody ever say, "Is this a violation of the Constitution? Is this an encroachment on peoples' First Amendment rights?" Nobody ever raised that. This was something the institution had to do because it was urged on by the principle clients--the broadcast industry.
Anyway, if I can continue, "And most recently I have been troubled by the Commission's current proposals for importation of distant signals, to be offset by commercial substitution. But through it all," listen to this, "I have been disturbed by the performance of some of our staff who deal with cable matters. I will be arguing no more cases with them and writing no more dissents. They will now be even freer to shape cable policy than in the past. I hope that they will truly serve the Commission and the overall public interest. I do not believe they have done so here." How about that from the commissioner. You talk about an angry man.
SMITH: Angry. Sort of a checkers speech. Was he ready to resign?
SCHILDHAUSE: He went soon after that, I think, saying he wanted to wash his hands of this bunch. I tell you something interesting. I can't remember this but I think it was in a publication coming out of Boston College and I'm not sure it was out of the law school. But anyway, after he left the Commission he couldn't resist taking a whack at me in something that was published months after he left the Commission. Maybe he had written it before he left and it took that long to get through the machinery of publication but it came out months after he was gone. Like September and I think he may have left in May or something like that. I'm not sure the exact month. That article resembled a law review article but it might not have come out of the law school. For some reason they have some other school there it may have come out of. Maybe the school of communications or what have you. And he said never in the history of administrative law had the desires and inclinations and wishes of people appointed by the President been frustrated by the activities of a staff member as happened in the cable field at the FCC. Imagine that. Something like that ... never in the history. I can't believe anybody would do anything like that after he left the Commission. A strange bird.
SMITH: Sounds almost paranoid.
SCHILDHAUSE: Paranoid, absolutely. Remember ... "I may lose a battle but I don't lose a war." Enough of that. I don't consider Ken my enemy. I'm only thinking of it because ... I haven't thought about him for two or three years. It just occurred to me.
So let's get back to 1966. We had been getting a win here and there. In other words, we were able to move some of the backlog. Now under backlog, we also had a backlog of petitions for special relief. They were exclusivity provisions and that kind of thing. There were must carry requirements. There were all kinds of requests pursuant to a rule that said you could file a petition for special relief. There were all kinds of requests piling up for relief from the requirement to carry or from the requirement to protect a particular program. And they piled up, too, because we basically were a small group of people and we were just hounded constantly. So we had as many as three or four hundred of those in the backlog. We weren't acting on them. Now Commissioner Cox used that against us, too, because you may recall that if you were asked to carry under the must-carry provision you were asked to carry a TV station. And you petitioned for special relief from the requirement to carry so that you would not have to carry them. You did not have to carry until the petition was acted on. In other words, there was an automatic stay of the requirement. So the three or four hundred petitions that were in our backlog were basically in favor of cable. They favored cable and this made him furious. He would come down to these meetings and say, "I want an order to the CATV Task Force that they are to take all three hundred of those," or whatever the number was, "and dismiss them out of hand." And I used to say, "We can't do that. There are pleadings on both sides. You can't just say it's denied because Commissioner Cox wants it denied. You can't do that." So I prevailed on it. That made him absolutely furious. So since we were now winning a few of the petitions to waive the hearing requirement, and cable here and there was getting a little jolt ... I remember we opened up the Harrisburg, Lebanon, York market at one point. And that infuriated him. I guess the wheel started to turn and by 1968 another program came out.
You want to stop for a moment?
SMITH: Yes, I'm going to put another tape in. We're at the end and we can't miss this.
End of Tape 2, Side B
SMITH: Okay we're back on the record.
SCHILDHAUSE: Now we're towards the tag end of the 1966 through 1968 period. Let me see if I can break this down easily so we can deal in these segments.
SMITH: You were just talking about a break up between Dean Burch and Nick Johnson. You jumped a few years ahead after that.
SCHILDHAUSE: It wasn't really a break up. It was an angry, angry published exchange in the books in connection with the 1972 report but we'll get back to that later.
SMITH: All right, fine.
SCHILDHAUSE: I have to tell you how I define that period when I was there--the earliest days of cable regulation by the FCC. I break it down into four two-year ... Well, there were four separate programs, two-years apart. Every two years when one program lost credibility they'd spring another one. That happened in '66, '68, '70 and '72 so there were four separate programs. I think '72 really did spring cable, I really do believe that. I'm going to give you, by the way, something to take to the museum. I think it's museum quality. When I left the Commission I was given a leather-bound copy of that '72 report. I was given it by Dean Burch at the going away ceremony and it's entitled--in big, bold, gold letters across the front--"Sol's Baby." This was given to me by Dean Burch and I've prized it all these years but I'd love for the museum to have it. It's around here and I'll get it for you.
SMITH: It would be wonderful to have it.
SCHILDHAUSE: Anyway, I think that was a notable achievement and I'll tell you why when we get to it. So the '66 to '68 period, we had two years of the '66 report which said no cable without a hearing. No cable in a major market without a hearing. If you want to build out there in the boondocks, that's where cable ought to be anyway kind of thing. And we started winning some of those cases. When I say "we" I mean the task force started winning some of those cases. Commissioner Cox didn't like it. There was a cadre on the Commission staff that was obviously available to Commissioner Cox. That cadre was headed up by the general counsel Henry Geller. There was no mistake. Everybody knew that. On the staff the rivalry was between me and Henry Geller. Henry Geller had a very first-class staff of people working for him, including Dan Ohlbaum who was a fine, fine lawyer and a real first class human being. There was Ruth Reel. I don't know if you remember her.
SMITH: I remember Ruth; and I was in the Navy with Dan.
SCHILDHAUSE: Well, there you go. Ruth Reel was a prodigious worker, a real smart lady. Henry, of course, himself could crank out. You need fifty pages tomorrow morning, Henry will give it to you--name your subject. Henry and Ruth Reel and Dan Ohlbaum and there was always somebody in the Broadcast Bureau. I think Juntilla who was very close to Ken Cox was always available to Henry to help. There were other people--Martin Levy. They were all opposed to us. As a matter of fact I used to tell our guys ... By the way it helped our task force a lot to have the rest of the institution opposed to us. It bonded us so that we were a tough crowd, we really were. We liked each other and I'm an easy boss. If you do your work, I don't care how you do it. There were no requirements. Whatever you need. You need a bunch of pads, you need new office furniture--go get it. Just do it. Whatever you need, get it. And they loved that, I think. That's my impression anyway. We did famously. We weeded out some of the people who weren't much good. I told you about that. The Republicans somehow disappeared. We had a number of those like that again this time. The Republicans back in the days when I was head of the Opinions office. The guys who came from the National Committee. This time some of the discards were thrown our way from the other bureaus. They drifted off and left. We began to get harder and harder and tighter and tighter. We were pretty good and we won a few cases on behalf of the systems.
Of course, the way to isolate me was to let the world know that I was acting improperly. A government person is not supposed to espouse any cause. Which always struck me as kind of dumb because George SMITH: in the Broadcast Bureau was there fighting for broadcasting all the time ... or Wally Johnson. They were fighting the broadcast battle all the time. But they did it differently from me. It was easy for them. I had to do bare knuckles to win anything and so it was clear. I was out there in the street getting bloody. Those guys could do it anonymously almost. And Bernie Strassburg and those fellows for the Common Carrier Bureau. Bernie was a very good guy, a good man.
SMITH: And Bernie was more on your side, was he?
SCHILDHAUSE: Well, Bernie was Bernie. He was cautious and careful but he was a bright guy and at least you could talk to him. He's a mensch, if you know that word.
So we started to win some cases and, of course, the other side started to suit up again. The first thing you know they dumped out the 1968 report--the 1968 new set of rules. Now I don't know if you remember them but the 1968 rules ... Of course nothing was ever admitted, you understand. I was not permitted in a Commission meeting ever to use the word "freeze" in connection with the 1966 report. I say I wasn't permitted. Ken Cox early on let it be known that he was furious whenever I used it so I stopped using it. The heat was on me not to use the word "freeze." And that's what '66 was. But '68 was absolute freeze because '68 now adopted a new set of rules. It didn't adopt rules. It said we are "proposing the following rules." We are proposing rules ... Because the old '66 thing isn't working. That's terrible. It's muddled, a lot of hearing work. Of course the same guys that wrote that are now saying how bad it was, right? But I didn't write the '66 report--it was handed to me. So along comes '68 and they say the '66 thing is all wrong. It creates administrative morass, hearings, who needs that ... blah, blah, blah. So we're proposing that what we will do is we will treat cable as follows. We will permit cable to come into the major markets if they can get retransmission consent from the distant signals they propose to carry. Now, by the way, it was pretty clear that in order to get cable started you need distant signals. You had to give them something that wasn't there. Okay. So the fight was over distant signals. Of course the broadcast industry never did want that because who wants programming brought in from Chicago or from New York that would compete with you in your own market. It could take listeners away and they probably would. They had baseball, football ... they had a lot of stuff on. So anyway, distant signal was the name of the game and this new proposal of 1968 said it was proposing a retransmission consent thing. And until we resolve that--we're going to take comments and so forth and so on--until we resolve that we're not going to act on any more proposals for ... what did we call it? Did we give them certificates? I forget what we called it. No, the certificates came later maybe ... whatever. We won't permit any new systems to get going. That was an absolute freeze. We had nothing to do. We had no backlog anymore. No backlog from systems wanting to get started because you couldn't do it now. You had to get retransmission consent. Now, we also set up some experiments because you have to make it look good. Some experiments were set up I think someplace in Kentucky. I forget where it was. TopVision was the name of the company as I recall. I'm hazy on these names. Of course, nobody got retransmission consent except in that Kentucky experiment. These cable guys got permission to carry the locally originated news from the distant signal they wanted to bring in.
SMITH: Because it wasn't copyrighted.
SCHILDHAUSE: Exactly. You could not get retransmission consent because the stations don't own copyrights. They have licenses, that's all, to use other people's property. And everybody knew that and the fellows who concocted the retransmission consent requirement obviously knew what they were doing. They put that over easily. Well, it was an absolute freeze.
SMITH: Was this Ken Cox and Henry Geller?
SCHILDHAUSE: Right, they put that over and we objected. We told them you can't get retransmission consent. But I couldn't get any place with it. They had it wired. Remember it was still Hyde in 1968.
SMITH: Now, had Fortnightly been decided? [Editorial Note: Fortnightly Corporation v. United Artists (in the Supreme Court) was the case in which that Court ruled that cable systems did not infringe copyrighted programs.]
SCHILDHAUSE: Fortnightly was decided in June of 1968. And there were two cases.
SMITH: That's correct.
SCHILDHAUSE: Now, let's go back on that. In June of 1968 two cases were decided and both of them were decided improperly according to the institution. I'm serious. Well, I take that back. Both cases were a surprise to the institution.
SMITH: The institution being the FCC?
SCHILDHAUSE: FCC, yeah. We expected to lose the Southwestern case and expected to win the copyright case. Instead of that we won Southwestern and lost the copyright, right?
SCHILDHAUSE: When I say "we" I mean the institution that wanted to favor the broadcasters. I forgot about that. That was a consideration, too. The thing that gave the other side, the side opposed to me, credibility ... By the way during this period we, the Task Force, actually left the main building and went to another building to get away from all of this. They were delighted to get rid of us because they weren't going to give us any space in the new building and we were expanding. They wanted to get rid of us so we got out of that building and went to 2025 M Street. That was really nice for us over there. It was beautiful quarters in those days. It's terrible now but it was brand new. We had nice furniture. Dick Wiley came over one day, looked in my office and said, "This is nicer than my office." Within a week somebody came over there and they just destroyed everything in sight ... spent $100,000 rebuilding it and making cubbyholes out of what was pretty nice stuff. Anyway, that's the government for you.
The other side was riding a horse, that's the word I'm thinking of, that they thought gave them real credibility, real plausibility and that was this. We will not free up cable television. Cable television is a pirate--it's using other people's property. We will not free it up until it comes to terms with that problem. That is they must stand in the marketplace and bid for programming like everybody else. Okay. So when cable agrees to come to the copyright table, then we will free them up. That basically was the horse they were riding and it was a pretty tough one.
SMITH: Wasn't retransmission consent a device to override the Supreme Court's decision in copyrights?
SCHILDHAUSE: Exactly. It was a re-imposition of copyright. Now this thing is so outrageous when you think about it. Incidentally, Barbara Ringer who was eventually ... I think her term came after that.
SMITH: I think it did, too.
SCHILDHAUSE: Barbara Ringer was a Registrar of Copyrights ... later than that, I think '71 or '72, around there. She appeared before Congress any number of times and said, "Retransmission consent is copyright. That's basically what it is. You've got to pay somebody before you can do this."
That business of we'll free up cable when cable comes to terms with copyright ... they rode that horse for a long time. About that time a fellow named Harold Farrow pops up in this medium, if that's the word. I had never known him before but one day I get a call from Farrow or from his secretary or somebody. Anyway, the word comes to me that Harold Farrow wants to see me and he was recommended by Newton Minow. Now I always had a soft spot in my heart for Newt Minow and I still do. Well, sure. I'll see Farrow. He doesn't need any special favors to get to see me. I was always accessible. If I had any time, anybody could walk in. People didn't knock on doors; they just walked into my office. So I said, "Sure." Well it turns out that Minow didn't even know who he was but he had called Minow's office and somebody had told him that Minow was a guy that knew his way around Washington communications and Minow's office had said, "Go see a guy named SCHILDHAUSE: with that problem." So he calls and says Minow sent me.
Anyway, I got to know Farrow. He's a very interesting guy. I was chummy with a lot of people in this business because I am a gregarious type and I know when I'm being used. What can you do? If you've got a power base you expect people to be nice to you, buy you a lunch, and then tell you what it is they want from you. That's the way the game goes in Washington. This fellow never did that. He just never did. Everybody else I knew acted that way, but this fellow was different. He never once asked me for a favor. He just wanted information ... How do you go about doing this? What do you do about that? What's that rule mean? That kind of thing. He came on very slowly. I didn't fall in love with him or anything like that but I got to recognize that there was something about this guy that was unusual. Once I remember calling him and saying, "Hey, what would you do if you had the following problem?" He gave me about three or four great solutions, great approaches to the problem. So I thought, wow, this guy's a gold mine. One day I got to talking to him about this copyright problem. I can't remember what year this was but it must have been early '70s or it might have been late '60s. He says, "You know, if you think about this there ought to be a way to resolve this."
No, I think it was earlier than that because I think Hyde was still chairman so it had to be before '69. Farrow starts thinking and sure enough he comes up with the following solution. No kidding, listen to this. I don't remember all the details but he had every base covered. First off, he had a cable operator wanting to enter the market in Woodland, California. Woodland, I think, is up there near Davis or near Sacramento on the way from the bay area up to Sacramento. He came in with a proposal in which Woodland was going to bring in the proper distant signals and they were going to handle the copyright problem as follows. They were going to make a payment, a percentage of the gross, they were going to pay it into a private fund and it was called CSI, as I remember--Copyright something Institute. Farrow had incorporated a recipient for this at the copyright office. The Woodland cable guy was going to take, I think, 7.5 percent of his gross and pay it into this CSI retaining group.
SCHILDHAUSE: CSI, and he had it incorporated, too. Now listen to this, CSI was going to take this money and it was going to pay it all over to the local signals in Woodland. And he was going to pay it all over to them in accordance with a schedule set up by their ARB ratings. It was done quite scientifically, not haphazardly as I'm restating it. But wait a minute, one other thing. The fund that CSI was going to be holding, if there were going to be other cable systems that would do this, he had it underwritten by an insurance company--a recognized insurance company. He had it all laid out so that nobody could complain about their not paying copyright. They were paying copyright and it was going to go to the people who were going to be hurt by it. He also had a payment to the stations being imported so that their programming would be paid for, too. One way or another he had this thing covered every single way. A private scheme. Very much like we have today, underwritten by an insurance company. And he applies for a waiver of the freeze because now he's satisfied the copyright problem, which was the basis for the freeze.
I brought it up to the Commission. I really did. I wrote this up. I remember this quite vividly. I brought it up to the Commission and for some reason the Commission meeting room was not in use that day. It was being repaired that day so we were in some cramped quarters someplace. Hyde was chairman. I brought it up and I presented it myself and I covered every single phase. Every question that was thrown at me we had it covered. I remember the commissioners--Bob Lee saying, "Looks good to me." And all the other commissioners saying, "Looks good to me." My God there was consternation on the part of the anti-cable commissioners. I think this came up in September and there was something going to happen sometime in October--like the 30th of October the Congress was going to consider something--and Henry and Hyde started whispering to each other and the chairman said, "Sounds like a great idea. What I'd like to do is table this item until we see what the Congress does in October." Whatever the date was in October when they were going to consider some kind of copyright thing. The other commissioners said, "Sure. The chairman wants to put it off for a month, why not." That was the only item we took up that day. As we were walking out, I'm walking out behind Hyde and Geller, and Geller says to Hyde, and I heard, he says, "Wow, that was close." That's a true story and that never came up again. They never brought it up again. I don't know why but it just died.
SMITH: Nobody motioned it back up.
SCHILDHAUSE: Boy, they got it off the agenda. You may remember as copyright was being considered, a revision of the Copyright Act of 1909 had been under consideration for years and years. Copyright, remember, is not just cable. You're talking about jukeboxes, you're talking about phonograph records, you're talking about computers, and so forth and so on, and then cable television. There had been a whole series of uneasy compromises affected with respect to every one of those industries. Those compromises were being held together with chewing gum. They could come apart at any time. All they were waiting for was for the cable thing to be resolved. So this cable thing was churning constantly.
The secret of how we finally opened up cable is really very, very simple. I think I had a big hand in how it was done. Let me tell you about it. Burch came on board in 1969.
SMITH: That's Chairman Burch.
SCHILDHAUSE: Chairman Dean Burch came on board in 1969. We were still a task force then. Bob Cahill was close to Dean. He knew him from some other life, I don't know where. As a matter of fact he was the first guy who told me Dean was going to be appointed to the chairmanship of the Commission. I think we were in some hotel in Chicago at the time, I can't recall. I think he told Dean Burch I was a pretty good egg, a pretty good guy. So when Dean Burch came on board he asked me to come down to his office. When I walked in I was sure I had been pre-sold by Cahill. I walked in and Dean was standing there in shirtsleeves and wearing a vest but he had taken his jacket off and rolled his sleeves up but wearing a vest. I don't know why I remember that but I do. We shook hands and I knew I liked this guy immediately. He was just a man's man. He really was. I immediately liked him. And we struck it off pretty well. I think over the years I got tiresome, you know, but we always had a good relationship. But I was insistent and kind of always driving and that could get on somebody's nerves. He finally, in 1974, asked me to move out and that kind of thing. But it never bothered me at all.
But anyway when he got on board I told him, "Look, the first order of business you've got to settle this cable thing. This is the problem inside the Commission. How do you do that?" I said, "Look, the way the Commission has it tied up now, they say that we're committed to keeping cable frozen until such time as copyright is settled, until it comes to terms with copyright at the negotiating table." That's a prescription for endless freeze because if the broadcast industry knows that they can keep cable bottled up by avoiding a settlement of copyright, they'll never agree to it. So what you have to do is turn the damn thing around and say, "We free up cable now." And then what has the broadcast industry got to gain by not agreeing to a copyright solution? All they do in that instance is save the cable industry money. Freed up and they won't have to pay copyright--the best of all worlds. That's the way to do it and that's how it turned out. Think about it. The '72 report freed up cable and then copyright legislation followed after that. Now, a couple of interesting features of that. The '68 report, that was the freeze report-- retransmission consent--it didn't work worth a damn. Everybody knew it wasn't going to work and it didn't.
Coming across some papers in the last few days I discovered that it was my group that suggested a fresh look that resulted in that crazy 1970 report. I got to thinking about why we did it. The reason we did it was there was no way to break the impasse. At least that would get it going again. Break it up again. Now it got goofier. That commercial substitution stuff and all of that. Some of that stuff was wild ... anti-leapfrogging and all of that baloney.
Anyway, one way or another Henry Geller ran with it and he came up with that commercial substitution program. It said you were going to be permitted to import four signals into any major market; then the commercials had to be removed from those four signals; the local stations permitted to sell their commercials into those programs. It was absolutely outrageous. I'm speechless thinking of it.
SMITH: Somebody else's property but you're deciding what to do with them.
SCHILDHAUSE: Outrageous. And the FCC, an agency that is constantly saying we can't censor because of Section 326 and the act says that ... Can you image that? I was appalled by that. Now Burch was a guy who went for that. In his defense, he was new and didn't quite know which way to turn and this wasn't going to change it much. He was being sold on my proposal but he wasn't ready to do anything dramatic yet. So this wasn't going to change it much. It was just going to continue the freeze a couple more years, all right. But right after that, after that commercial substitution thing, he got the sense that it was a bunch of baloney, it wasn't going to work. We started working on a final solution to this problem which was we were going to free it up and worry about copyright later.
That leads us into 1971 when we finally do come up with a program. Let me tell you, that thing was hammered out. That was not written, that was blacksmithed. I mean there was blood on every word of that thing, there honestly was. If you remember in 1971, John Pastore who was, I think, in the hip pocket of ... that may be the wrong word, but he was friendly with the broadcast industry. He headed up the Senate committee or subcommittee on whatever it was that was involved with FCC matters. He heard that we were coming out with this thing with which we were going to free up cable. We were going to permit the importation of two distant signals into one of the major markets on the theory that you couldn't make cable go without having at least that--something new to offer. That word was out. You couldn't keep that a secret because by that time we must have had twenty-five drafts and lots of meetings and you know how that goes. If it didn't leak out, one way or another somebody was going to find out about it. Anyway, it was all over the place. So we were getting ready, as I recall, to issue that darn thing in 1971 when Pastore said, "Don't you put it out without my first seeing it." So what we did was we put it out as a letter of intent--this is what we were going to do. I think it's called letter of intent and I think it's in the history books that way. I know it's published.
We sent it up to John Pastore with a letter of intent saying this is what we propose to do. Very quickly we were told by the White House that this was not going to be. It came from a guy named Clay Whitehead who headed up something called OTP, Office of Telecommunications Policy. I think he got the word from a guy ... There was a fellow there named Peter Flanagan who I think came out of the Manufacturers Hanover empire and he was at the White House then. He was running interference, I think, for the copyright holders at that time. The word was out that we were not going to bring this thing off. So we were becalmed until such time as Clay Whitehead at Burch's ... I'm a little bit hazy about how this was done. I can't recall exactly. I know Burch was urged by me and by others--Chuck Lichenstein--to get involved and make sure that somehow this was uncorked. To see what we could do. The first thing you know there were a bunch of meetings set up. I attended them. I don't know if I ever told you this but there were meetings set up which finally evolved into the Consensus Agreement. The copyright holders, meaning the movie producers, and the broadcast guys and the cable guys finally agreed that they could live with this kind of program. Of course the one ingredient missing ... who was representing the public interest? The FCC? ... well maybe.
Representing Clay Whitehead, and they were running interference for the producers, was, believe it or not, Antonin Scalia.
SMITH: A Supreme Court justice today.
SCHILDHAUSE: Yeah. He was assisted by a fellow named Henry Goldberg who I think is a respected member of the bar here--Goldberg & Specter I think is the name. A very able guy. And then Henry Geller was representing broadcast and I was representing cable guys. We hammered out a compromise. That was called the Consensus Agreement and that finally led to the adoption of the 1972 report. The 1972 report was followed a few years later by a copyright act, which included cable. And cable began to pay copyright in 1978. And you know the industry has taken off since then. There are a lot of other factors that made it take off. That's a quick overview of that history.
So where do we go now? Now, how did I get out of there? Was I dumped out of there?
SMITH: Well, let's do that in another session. I want to question you in considerably more detail on some of these things but this gives a nice overview and it tells me what homework to go back and do to develop the other points. So, yeah, what got you out of there?
SCHILDHAUSE: In 1973 ... I had heart attacks every eight years over a period of sixteen years. I had a heart attack in '65. I remember Ken Cox told me I could get out by talking to the old man ... blah, blah. I had another heart attack in May of 1973. By this time the '72 report was behind us and things were just rocking along. We were a Cable Bureau by then and had about one hundred people. We were organized. We were a factor in the Commission.
SMITH: Tell us while you're working up to this, how did it come about to turn into a bureau instead of a task force?
SCHILDHAUSE: Well, I got the feeling now that I had been in it from '66, '67, '68, '69 ... I didn't want to leave this thing. It was my baby now. I looked around. You know, if you want to wrestle with the other powers in that business, you've got to be at their level. So I had the notion that there ought to be the Cable Bureau and I talked Dean Burch into it. It wasn't hard at all except that I think he had a hard time getting me approved as chief. I think it took him a year because I wasn't a registered Republican.
SMITH: Oh. And how about Cox?
SCHILDHAUSE: Cox was gone by then. He would have put a knife into that. So I became chief, I think, in 1971. I think the thing was done in 1970. I think Cox left in '70. And of course, the other commissioners they were ... well who else was there? There wasn't even a pretender. So I got the job. I think Dean liked me early on because he invited me out to his house a couple times. But of course it cooled over the years because I got to be a pest after a while. Dean Burch was a dream.
This is of some interest. One of the guys he did not like was Dick Wiley.
SMITH: Well, that's interesting.
SCHILDHAUSE: This is another tale out of school. This is true. He did not like Dick Wiley. I think he didn't like Dick Wiley because he thought Dick Wiley was just too damned ambitious. Burch was a man's man and what I mean is that he had the faults that most men have. He liked a little bit of fun. He wasn't grim. He'd take a drink once in a while, loved a good joke. He really was. But Wiley was always working. Working all the time. Not Burch. We'd come back from meetings and Burch and his troops--his troops included Cahill, me, Chuck Lichenstein, John Eger, maybe. We'd go into his office and we'd pass the desk of Jennifer Fitzgerald who was Burch's administrative assistant. But she'd control his desk. Of course, she knew all of us. We were the boys to her. Jennifer was a tough gal, pretty good. As we'd file by he'd say, "Miss Blue," he always called her Miss Blue after the Amos and Andy thing, "Miss Blue, hold the calls and bring in the sauce," or something. I don't think he used the word sauce but bring in the whatever--it was booze. So we'd go in there.
I saw him angry a few times. I really did. He'd take that agenda book and fling it against the wall and utter an epitaph like I don't even dare mention. We'd sit down and everybody would put their feet up. We were all smokers. I'd chisel cigarettes from him and he'd chisel cigarettes from me. We'd drink straight vodka in those days--vodka over ice. We'd sit there sipping and lamenting about all those commissioners and those guys on the staff, and on and on. It was wonderful. You were on Dean Burch's team and it wasn't hard to be on his team. All you had to do was play it straight with him, you know, and be slightly interesting and he would embrace you. He was a great guy to work for. I loved working for Dean. He was marvelous.
With Wiley, I remember when I first met Wiley he was general counsel of the FCC before he moved up to commissioner. We went down to Charlottesville, Virginia, for a junket. It was the Federal Executive Institute. I think it was called--FEI. It was where they're supposed to teach upper-echelon guys management tricks ... how to be a good manager kind of baloney. They have like a motel down there. It's not decrepit but an older motel with a swimming pool. They housed a bunch of us--Bernie Strassburg, guys like that. We went down there and we'd go to some classes in the morning, they'd be dull as dishwater. Yawn through it for a couple of days, take a swim, play some volleyball, and at night go out and drink a couple of beers, okay. That went on for about a week. Wiley had the room next to mine. The first night we're there ... There was a pizza parlor across the street. Everybody went over there because there was no other place to go within walking distance. We walked over there. They had long benches and long tables, like long picnic tables, that you sat at. I'm sitting there--Wiley's in the middle, Wally Johnson's on the other side of Wiley, and I'm on this side of Wiley. It was me, Wiley, and Wally Johnson. We were sitting there eating pizza and drinking beer. I think everybody was drinking beer--I know Wiley and I were. We got to talking and Wiley leaned over to me--I never will forget this, I don't know why things stick with me and he wanted me to like him--and he said, "Hey Sol, you've got to understand me. I'm just very ambitious." I never forgot that. I think it's charming. He is terrific. A tough, tough lawyer. A really good lawyer, no kidding.
SMITH: I've had some recent contacts with him. I like him.
SCHILDHAUSE: One of the strongest guys in this bar. Nothing like him. I tell you, if I were going to hire a lawyer in the communications bar, I'd hire Dick Wiley. Without hesitation. Nobody's in his class. I'm not kidding. But Burch was slightly envious of him. He didn't like him because he was so perfect.
SMITH: Well, Burch wasn't a lawyer was he?
SCHILDHAUSE: Burch was a lawyer.
SCHILDHAUSE: Burch wasn't so much a deep-domed intellectual. He was a quick study, real quick. His instincts were infallible. They were good. Remember Freda Hennock?
SMITH: I remember Freda Hennock.
SCHILDHAUSE: She didn't know anything about the law at all but she had incredible instincts for what was right. She really did. She just smelled what was right. Some people are like that. There are some people that you can send into a clothing store and there will be 500 things hanging on racks and there will be one dog. One dog among 500--499 perfect things and they'll pick the dog out. There are people like that. Other people, you send them into that shop and there will be 499 dogs and one good thing and they'll find that one good thing. That was Freda. She was just unerring. Dean was very much like that. They were different people. She had a rascal side to her. Not Dean--he was a pretty straight guy.
SMITH: Well you had indicated that finally Dean asked you to move on and I didn't let you finish the story.
SCHILDHAUSE: He did, yeah. So I had this heart attack in '73 and I was at home recovering from it. I bounced back from each of my three heart attacks and I was playing handball again three or four weeks afterwards. I'm not getting cocky or anything because I could be gone tomorrow but even after my heart operation in '81 I was back playing in about sixty days which is quite unusual. So I'd bounce back. But I was still at home recovering, lying on a couch. I think my wife had moved out by that time--towards the end of '73. They wanted to bring on board a guy that was going to be my deputy. I had no deputy. So one afternoon Chuck Lichenstein calls me up and says, "Dean's got a guy he wants you to look at. There's no compulsion to do anything, no demand that you do anything. But if you like this guy and can use him, then Dean would like to take him on as a deputy. But look at him. His name is David Kinley." I found out later Kinley was ... He's really a very nice guy. I don't know if you know David.
SMITH: I know David.
SCHILDHAUSE: A very fine guy. I had absolutely no reservations about him at all. He came from Gray from the FBI. What was Gray's first name? I can't remember. I think he had worked for Gray at the FBI. I think he was recommended by John Mitchell--Kinley was. So Chuck says, "Can I bring him out and introduce you to him?" I said, "Sure." And they brought him out to my house.
I told you where I live, right over the city line near Friendship Heights. A separate town called Somerset. They brought him out and I liked Kinley. A nice guy, very pleasant. The next day I called Chuck and said, "Sure, I have no problem with that." I had the feeling it wouldn't make any difference what I was going to say but I said, "Sure. I have no problem. He seems like a very nice fellow." I never felt threatened, I really didn't. The next thing you know, I get back to work and one day Dean calls me down to his office in December 1973. He says, "I need the job." I said, "For whom, for Kinley?" He said, "Yeah. Now look, I'll give you your choice. You can go back and be an Administrative Law Judge," I don't know if they were calling them that then, "be the Hearing Examiner again or I'll make you the head of Office of Plans and Policy." I said, "I don't think I want either of those. Let me think about it." And I thought about it and said, "I think what I'd like to do if I could figure out a way to retire on disability I'd like to do that." He said, "Whatever you need, just let me know. I'll do it." And I did that. I retired on disability. It didn't mean anything and it doesn't now. You don't get anything extra for it. I think it helped me get some kind of benefits the first year. I don't know what it was. I can't remember now.
By that time I had been talking to Farrow and Farrow said, "Any time you want to leave the FCC it's okay with me. I'd love to have you." Which is fine. I said, "What the hell. Why don't I do that?" I can get a nice retirement from the FCC. It wasn't much then but it is now. It's pretty good now. You know I told you what Max Paging makes. I make $4,500 a month retirement.
SMITH: That's good.
SCHILDHAUSE: I didn't make that kind of money at the FCC. So I left and that's exactly how it happened. No hard feelings. I always loved Dean Burch. I don't go to many funerals but I went to his. I don't ever go to funerals if I can avoid it. I have a warm spot and very pleasant memories of the man. His place in history, I think, is not fully credited. I think the cable industry owes a bunch to him.
SMITH: I don't think the cable industry knows that yet but I think it is going to become apparent. It will be when the history book is written.
SCHILDHAUSE: I mean that. You've got to remember what he did. Hell, we could have been there another five years with that freeze. Of course the freeze was lifted but if you remember there was a depression I think around '73 or '74. God, the country was terribly depressed. I had $1,500 that I could spare and I was looking at cable stocks. I think TCI was selling at seventy-five cents a share and TelePrompTer was about a buck and a quarter. Some very small number. You couldn't raise money to build systems with so it really didn't get going until a little bit after that. That copyright thing, that resolved it. And that was a pretty good settlement they got out of copyright. They really did.
By the way something interesting that you must record in your history and that almost everybody has overlooked, everybody has overlooked but me, I'm not kidding. The 1970 report, the 1970 commercial substitution plan, goofy as it was, Henry had to sell that hard. He had to give something to everybody. Five percent to this guy, whatever it was. Five percent to ...
End of Tape 3, Side A
SMITH: Sol, go ahead with what you were talking about.
SCHILDHAUSE: I was saying that an interesting feature of the 1970 commercial substitution program of the FCC that has been overlooked over the years and it's important because you hear lots of bleeding from those who would repeal the compulsory copyright license, that it gives cable a free ride. Okay. And it's important for that reason. What it was was an attempt to buttress the 1970 program by suggesting a copyright solution. The copyright solution that was recommended computed the value of a distant signal and said this is what it's worth. It's called a staff analysis appended to the report or whatever it was if it was a report. I forget how it was published. I can find it in two minutes if I wanted to. But it's called a staff analysis. It's a one-page document that computes what a cable guy ought to be paying for a distant signal. It was computed as of seven-tenths of one percent per distant signal. That was the "official" finding by the FCC of what a distant signal is worth. Now the compulsory copyright license starts out higher than that for the first signal. As I remember it's .089, I think. Instead of seven-tenths of a percent it's 8.9 tenths of a percent for the first signal under the compulsory copyright license. So compulsory copyright license is no bargain if you accept that figure. Now you can find that with that 1972 program of the FCC. It's in the FCC reports. I forget where it would be but I can find it for you if I have to and you can, too, I suppose.
SMITH: I can find it I'm sure.
SCHILDHAUSE: It's a one-page thing that was done by Alex Korn who was chief economist of the FCC in those days.
Now there's a lot of talk these days about retransmission consent, must-carry, a compulsory license. Just think about. A compulsory license they say was designed to ... Those who want to get rid of it say it was designed as a bargain for cable to get them started. That's a bunch of baloney. That is not it at all. It was designed because you wouldn't have cable at all ... It wasn't designed to give them a benefit; it was designed to make sure we had cable.
SMITH: To keep it alive.
SCHILDHAUSE: Keep it alive. Right. Not only because of the transactional cost. This is important, I swear. Transactional cost, everybody understands that. How can you get a copyright clearance for the hundreds of thousands of programs you carry every week? How can you do that especially since sometimes you can't tell in advance what's going to be on a television signal? You can't tell.
SMITH: To this day.
SCHILDHAUSE: Yeah, the last minute changes and so forth and so on. But anybody can understand transactional costs. It's not so difficult to do. But it's much more important than that. There was no way cable could get consent. There was no way a copyright holder wanted to let cable carry WGN from Chicago into Washington, D.C. They were not going to permit it. It's as simple as that. So there was not going to be a cable industry because no distant signals. Remember what a compulsory license is. A compulsory license says you can carry that guy whether he wants to be carried or not. You don't have to ask him. He can't say no to you. That's what the compulsory license means. Retransmission consent, now. The people trying to put over retransmission consent without doing something about the compulsory license are just out in Mars because retransmission consent says you've got to get my permission before you can carry me.
SMITH: Of course I can't give you permission.
SCHILDHAUSE: Whether they can or not, how can you make those things consistent. That's in this S.12 Bill--retransmission consent and we still have compulsory license. If that thing should ever pass, where would we be? You have to get retransmission consent but here, if you pay money in, you've got a compulsory ... I mean, who's going to be prosecuted for what. The whole thing is insane.
Now must-carry. I mean that thing just leaves me cold. First, the cable industry doesn't give a damn about must-carry. Must-carry, sure, go ahead, try to put it over. Why is the broadcast industry so on fire over must- carry? I've racked my brains for years trying to figure that out. First off, who is it that the cable guys aren't carrying? They're not carrying that fourth UHF station doing Christian broadcasting or doing shopping. Why should the rest of the broadcast industry give a damn about that? It's a whole different industry. They're not our folks. They're different folks. Why they care is because they're afraid that one-day they're going to have to pay to be carried. Clearly the only reason. They're still going after it like it was life or death.
Now interestingly, watch John Malone. This has nothing to do with history. You watch John Malone he's talking, "Yeah, you want to get rid of the compulsory license. Sure. I'll be glad to consider that, sure." He's making noises like that, you know.
SMITH: Yes, I ran ...
SCHILDHAUSE: But if you read between the lines, if you read deeper into the story, then he says, "We'll have to phase it out gradually." So they're talking about a five-year phase out. Five years from now, who'll give a damn about broadcast signals? I'm not kidding. What are they going to have to sell? They may have the Super Bowl and they may have the World Series only because the guys on Capitol Hill will insist on it. But if we win the Preferred case, they won't even have that. I'm serious.
Now this industry, if they have any sense, Strat, this has nothing to do with this, but if this industry had any sense I've always felt they could get on Harold Farrow's bandwagon and go like gangbusters for that and they would come out ... If they could win that case they'd be in clover. Just think about it. Why are they worried? They're worried about competition? Is there going to be a second cable system in every market? Here and there there's going to be one. You can't stop it anyway. If a guy wants to be in business he's going to get into it one way or another. Really, you can force your way into it even today. So if you open it up and say, "Sure, it's open to everybody," it isn't going to make any big difference. But on the other hand, if you can get freed up from government regulation, look at the money you save. Look at the things you can do. You don't have to provide access. You get away from franchise fees. You stop worrying about buttering up those jerks down at city hall. Oh my God, it would be ... And maybe sue for past franchise fees. Class actions to get that money back. Oh, I could just see subscribers doing that. I bet you anything. Oh, it would be a field day. I don't know why they don't do it. What I'm saying is I wish they would. We [our firm] would have a bigger chance if we had a big budget to do it. But we'll do it anyway.
Anyway, Strat, that's my story.
SMITH: Well, Sol, it's a good story.
End of Tape 3, Side B