Interview Date: December 12, 2002
Interviewer: Rex Porter
Interview location: Denver CO
Collection: Hauser Collection
PORTER: I’m Rex Porter and we’re at The Cable Center to interview cable industry pioneer, Mr. Tom Elliott. Good morning, Tom.
PORTER: Why don’t you get us started off by giving us a little background on your childhood days growing up wherever you grew up and some of your school experiences and so forth.
ELLIOTT: Sure. I’d like to certainly kind of work our way through a chronological thing but I think also maybe it’s important to capture a little bit of an executive summary. Almost to start in the sense that I’ve been really fortunate to be involved in the industry from the early rebroadcast days. We’ll talk more about that later through what I’d call ad choice days or the ability to bring diversified programming via satellite to the industry which really allowed us to penetrate the whole American scene to now what I think will become personal television. Along with that it seems the natural huge changes this industry brought and the huge changes we had in TCI caused huge changes in myself. Where I migrated from being a person that was largely interested in technology and physics to a person today that is more interested in how this affects the human animal and the things we need to learn and do to deal with this rapidly changing society we have today. That’s kind of, I think, a good way to look both at what’s happened in the industry and to some extent what’s happened to me. As you look at the early underpinnings that I had I think all of us are typically well served by really our parents and certainly I was very fortunate to have been raised in a very family environment. I had lots of aunts, uncles, cousins, grandpas, grandmas and so forth around. All of who had a big influence on my life one way or another and I think it certainly served me well. That rural dry land environment that I grew up in central Montana gave you both the opportunity to really develop as an individual but also forced you to be extremely pragmatic.
PORTER: Where in central Montana?
ELLIOTT: It was on a ranch -- if you put a dot between Billings and Great Falls, right in the middle of a line between those two cities. It would almost be on Dad’s place. It was in the Lewistown, Harlowton area for people a little bit more familiar with the state. A rural part of the state. At the time I was growing up, in the 1950s and 1960s, that part of the country, the whole state of Montana had less than 500,000 people. As you got into the rural part of the state, away from the Great Falls and Billings and Dubuque's and whatever, it was rural. I still miss that. I enjoyed that experience. People, as you are certainly well aware of, are quite real in that kind of environment. They have to be to survive but I think as far as having an influence on me, it’s been extremely useful throughout my career as to the fact of what it is, is what it is. If it rains, it rains. If it doesn’t rain, it doesn’t rain. People have to get very use to the fact that life is not particularly fair. You’ve got to make the best of it. You’ve got to have a sense of optimism. You have to have a sense of belief that you can virtually deal with any kind of a circumstance that comes along. Whether it be your entire crop gets hailed out or it’s extremely dry or whatever it might be.
PORTER: So nobody in your family and your background, in your family was involved in broadcast or electronics or anything?
PORTER: Just rural, ranch.
ELLIOTT: Right. I think I was lucky in the sense that one of the things that Dad valued a lot was intellectual curiosity. He was a curious guy. He’s done a lot of inventing in his life. Always was trying to fix things, make them better. Kept the place in tiptop shape. Was looking for ways to make things easier. So he is an inventive sort of guy. A curious guy. He expects you to think. We would make mistakes as youngsters --I have two younger brothers and a sister and that was okay with Dad. What was not okay, if we thought as we made those mistakes – what was not okay was making a mistake based on not thinking. That was pretty frustrating to him. He didn’t like that much. I think his constant attention to detail and paying attention and thinking had a huge impact. And I think that had something to do with me becoming interested in physics. Which of course in those days was mostly what you did if you wanted to be in electronics.
PORTER: You finished elementary school obviously in Montana. You went to high school in Montana?
PORTER: Was there anything in your high school experiences that made you think that… had you already started delving into electronics?
ELLIOTT: I was always interested in what was going on, the law of physics. How did this happen? How did that happen? Very curious youngster I think, probably to the point of being a real pain in the neck. But television was just coming into the area at the time in kind of a goofy sort of a way. We’re roughly about 120 miles to either Big Falls or Billings and those TV stations like so many in the United States went on the air in the early 1950s. So there were some of the more aggressive folks around the community that would put up a tower on top of a hill or something and they’d get a little bit of snow, once in a while a picture and that fascinated me. How does this stuff get through the ether, if you will, to us and what was the background of how that worked? And of course that led me into the normal progression that most of us went through I think. The early crystal radio sets and you know, seeing if you can make those things work and trying to make the cat whiskers actually produce something. All that stuff that most of us I think played with. Had some help in the sense that it was a very small school that I went to there, Judith Gap High School, I think the year I graduated was down to around 30 pupils or something. Typically ranged in the 60 or so kids area and so we didn’t have a broad diversification of programming available but I was lucky that we had a couple of instructors there that were interested at least in math and I could get some advance math courses. That was kind of just a lucky break, really at that point in time. And of course that’s kind of the foundation of how you can delve in and actually understand in some detail most of the stuff that we needed to deal with in those days. As you remember most of that of the double EE courses in those days tended to be radio electrical. You tended to get your degree in electrical engineering with a minor in electronics. So I found it was typically more effective to pursue physics and deal with the essentially electronics as a branch of physics that they had in those times than it was to actually go into the electrical area and deal with these huge transformers that put out 100 amps or 1000 amps or whatever. It was kind of a simple rule. If you wanted to talk about amps, which I was interested in, I liked electricity but that’s not what I wanted to spend my time on. I wanted to spend my time in milliamps. So there more to an amp that I didn’t want to deal with. I wanted to get back to the milliamps.
PORTER: So you took physic classes and tended to aim toward the physics? So you graduated high school.
PORTER: Then what happened?
ELLIOTT: I came here to Denver actually, interestingly enough, to the Colorado Institute of Technology which was focused almost exclusively in the general technology area and specifically had electronic programs available. It was a really a great opportunity. One of the things that they tended to do more than some of the colleges at that time is have people on their staff that also held either full-time or fairly extensive positions in industry. The guy that ran the school felt pretty strongly about having the students well immersed essentially in commerce if you will, as well as learning a particular trade. I think that was important just in the sense that it was much easier to get a placement as you got out of college that way. I don’t think that hardly any of the folks coming out of that group had much trouble finding job opportunities.
PORTER: Was it intermeshed with actual work, in other words did you leave campus and go to a business and do a little….
ELLIOTT: Right. We did a fair amount of that. I think it was unusual in those days to have those sorts of type programs but Honeywell was here in town. Hathaway was here. Hathaway was probably the one that I spent more time with than any of the rest because the particular professor, I’ll never forget him, Mr. Alme [sp], was the guy that I tended to identify I guess more closely with.
PORTER: What did Hathaway do?
ELLIOTT: They were in the test equipment business. They were very heavily involved in well instrumentation, the wild catting kinds of stuff, so a lot of their instrumentation was one way or another involved in essentially geological sciences type of stuff at that point in time.
PORTER: When you were going to this school, did you have any idea what you wanted to do? I mean were aiming toward a…
ELLIOTT: No, probably not. At that point in time, I was probably still you know like most kids in their 17, 18, 19 years old, wondering what the right approach really was. I had started driving when I was I guess about 6 years old but by the time I was 10 I was working full time on the ranch. By the time I was 11 or 12, myself and another young guy that had the same background was operating heavy equipment. I did a lot of somewhat fairly dangerous work in some cases that you know just our reaction times as youngsters let you accomplish and so by the time I was out of high school I was making good money as a heavy equipment operator and there was some thought that “Gee, well maybe what I should do is pursue this interest that I have. This hobby that I have, this fun that I have as a backup to what happens if I get hurt.” Because of course, fighting fires and so forth on those caterpillars which in some cases was a little bit dangerous. So there would be some chance, you know, that you might be disabled and maybe the way you think about this is what you should do is primarily get yourself at least some education as a fallback in case that something nasty happens. I certainly made a hell of a lot more money operating that heavy equipment than was available in the electronics.
PORTER: Probably had more ready jobs too.
ELLIOTT: Yeah, lots of opportunity. I graduated from high school in 1960 and as such there was lots going on but as I went on through the academic process there at Colorado Tech, you know, it just hooked me. It was what I wanted to do. I got lucky when I came out of school there was five of us there in the top of the class that went around, it was kind of buddies, testing the lots of different places. Had a lot of offers. Probably would have went to work for IBM except that they got into the psychology profiling that they were sort of heavily into in those days and while I didn’t drink that much and I certainly didn’t smoke or the rest of the stuff, I objected to the fact that they started asking me all these rather intimate questions about my personal behavior and I decided “Gee, I’m probably too much of an individualist to fit particularly well in that kind of environment.” So I ended up going to work for a company called EG&G. Edgerton, Germeshausen, and Grier, down in Las Vegas, blowing up the nuclear bombs in their weapons testing engineering department during what we called priming, firing and instrumentation. It obviously an event like that happened so fast that you really are only interested in the first few picoseconds. The guys knew what was happening after that. You know you’ve got to time it and fire it so you can get that little snapshot in time. It also turned out that company did all the missile launches and all the other things because in those days the sequencing to launch essentially a liquid fuel device was the same the sequence to blow up a nuclear event. It was really a great company. That company was founded in old Manhattan Project days when the government came in to Dr. Edgerton and asked him to essentially put together a company that would do this sort of stuff. He was the guy that got the Pulitzer Prize in 1926 for the milk dropped into the bowl. Milk that put up the milk crown which you know, you and I can do at home today with our camera but at the time that he did it, you know, was pretty master. Just a wonderful guy. One of those guys who’s extremely curious. Certainly it’s well recorded in history. Found the Thresher as an example, for the Navy when they couldn’t find it with his underwater camera techniques, etc., etc. So, it was a huge learning experience to be there and be around literally the best in the world. Physicists, you know, engineering talent. I really loved the job. It was a great job. The problem was it wasn’t in Montana. So, as time went along by then I was married and had married a gal who had grown up about 15 miles from where I’d grown up out in the country. We both had our parents and our relatives and so forth back in that part of the country and we thought it would be nice to see if we could find an opportunity to be a little bit closer to them. So, hence, the contact with what was at that time Magness’s operation.
PORTER: How did you meet – you were at AT&T?
ELLIOTT: Right, in Las Vegas.
PORTER: How did you learn about the Magness's?
ELLIOTT: Well, I knew something about it in the sense that I had looked at going through college in Bozeman and still was interested in furthering my educational experience in Bozeman. They were, I think, clearly the best engineering school for this type of thing in the state at that time. You had the more liberal approach in Missoula of course and they’re internationally known as a forestry school and then you had a great minerals, geological school in Butte. I think again had a great reputation. But if you were looking into more the sciences and other than that, Bozeman was the place. So, looking at Bozeman, I knew something about it but interestingly enough a gentleman who also went to Colorado Tech, had landed a job with Western Microwave, which was one of the many, many companies that Bob and Betsy were invested in at that point of time and so I talked to him. And he said “Yeah, we’re probably typically looking for people as we expand” and I interviewed and lo and behold, I ended up back in Bozeman, Montana.
PORTER: How big was the microwave system that they had at that time? Do you remember?
ELLIOTT: Yeah, it’s an interesting story in and of itself. The system had come into fruition in a kind of the 1960ish time frame when Bob and Betsy looked around after they sold their system in Memphis, Texas. Looking at probably spending at least the next piece of their career in specifically the cable environment. As I’m sure you’ve heard this story from lots of other interviews but they did a fairly exhaustive search of the United States to see what they thought the best opportunity was and then pretty aggressive folks as you know, they bought this system in Bozeman that was essentially in a state of a bankruptcy and Paul had flown into a mountain down here in Colorado and killed himself. So this was a terrible, terribly fouled up situation and a matter of fact they were able to buy it at least inexpensively and clearly understood the problem was that they had I believe 5 signals on the air, all of which were KID or out of Idaho Falls, Idaho or a derivative of KID. KXLF was also an Idaho Falls off air pickup. KFVB in Great Falls was an off air pickup of KXLF. KWOK in Billings was an off air pickup of KID. They had all this stuff on the system but it was essentially the same thing and I think principally the reason the system hadn’t made it. So they filed when they first got there two microwave routes. One from Spokane over with the idea of extending to Seattle at some point in time and the other one from Salt Lake up. Fortunately, this commission granted the Salt Lake route and the reason I say that is that it was the same time zone and it had more of a commonality of interest I think in the sense that the weather reports were more applicable in that part of the country than say the more coastal weather reports would have been. So that system’s operational. The system from Salt Lake, I think we had a 150 mile or something off air pickup down in out of Pocatello and from there hopped it up all the way to East Butte which is where Idaho Falls KID was actually located and on up until the continental border and one more hop through, two more hops excuse me, through up the Gallatin, the Madison valley over to a side out of Butte in Bozeman. We covered a lot of territory in those days.
PORTER: Both common carriers?
ELLIOTT: All common carrier. All 6 MHz. Which is as your know there’s always lots of stories being told about that. I mean this was before the Commission froze the 6 MHz ban for cable use and by then they had extended the system on across into Billings and also up through into Great Falls. So that was kind of the nucleus of the system when I got there. Along the way they fed the little cable systems of course, that existed at that point in time and also the TV stations. So it was a joint use common carrier, microwave system that brought television into essentially that whole part of the country.
PORTER: Had you gotten your first class ticket while you were in college?
ELLIOTT: No, I picked up the…I actually got my second first and the first class later. As a requirement to go to work in the microwave environment. I mean when they said “Gee, if you get work here, we have no choice. You’ve got to have at least a second class in order to be able to legally…”, actually the way the FCC looked at it in those days to set the frequency and the power of the transmitter, that was the theory behind why you had to have that license. Fortunately, for me that was not a big trek. Learning the regulations and all that stuff took me some time to memorize that sort of stuff because there’s no logical or deductive way you can get to what the particular frequency requirements are and you know, tolerances and so forth and so on of a given whatever it is that they asked you questions on. The test that I got, unfortunately, was a test that was full of public service radio questions and unfortunately hadn’t studied…
PORTER: Mine was too.
ELLIOTT: Had nothing to do with what I was going to do. I guess that’s kind of the government for you. They don’t care about pragmatic practical things. So the good news was, I studied that enough that I didn’t have any trouble with it. The radar endorsement probably had more to do with what I was doing.
PORTER: I never did get that and yet I worked in radar. That’s a good endorsement.
ELLIOTT: It had more applicability. I mean after all we were running clash drawn, etc., etc. All be it relatively small clash drawns compared to the radar rigs. So, that was the nucleus of the system. We were expanding fast and in those days we…some cases actually built the buildings ourselves. We certainly put the towers up, welded them ourselves. Did the whole thing from top to bottom.
PORTER: But at that point in time you’re pretty much in the Pacific Northwest area?
ELLIOTT: Yeah, really in the Northwest I think. Not so much Pacific. Remember the old intermountain microwave stuff, [?] and those guys are part of TelePrompTer were bringing the Spokane signals over into Kalispell, you know, Missoula area. Bob Sherpinseal [sp], Ray Rohrer and those guys were up there doing that sort of stuff and we were more kind of from the Salt Lake north area, up and kind of met them essentially by at Butte really. Then we went East from there and carried those signals on over into, actually all the way to Williston, North Dakota. In a fairly short period of time. I helped build the network that took the stuff on East.
PORTER: But now Bob Magness’ group TCI wasn’t very big then, was it?
ELLIOTT: Well, they didn’t have a TCI, of course in those days.
ELLIOTT: We had a loosely affiliated bunch of partners that tended to be whatever they were. I mean it wasn’t – it was still early enough that the world looked somewhat like it did I think when basically cable got started where you typically had appliance dealers in town, that had been selling washing machines and all the different appliances for a long time. And of course their buddies in the big cities would have had this new appliance to sell called a television set and they couldn’t sell one. So a lot of times these folks would tend to be the local entrepreneur that had an appliance store but he was also the plumber, he was the electrician, he was whatever else he was in these little towns. And these guys would then typically know somebody in town that had a few bucks, the dentist or whoever it was. You know how those small environments work and that group would put together a partnership which usually would partner with Bob and a gentleman, Paul McAdams, who was Bob’s principle partner. Most of the things that Bob and Betsy did in those days, they had a 50/50 agreement with Paul on and then they in turn had a number of other partners who were involved in each little system as it went along. Bob and Betsy had Bozeman as a system that they personally had control of and Paul had a little system over the mountain there – Livingston, that he had control of. But other than that most of the rest of the stuff they tended to be in partners with. They were a great team. Paul was a very farsighted, futuristic guy. A guy that had more on the ball than anybody I think we’ve ever met period since then. He just had no concept of what the word “no” meant. You can tell Paul “no, hell no,” scream at him – didn’t have any impact at all. Whatever his idea was, that’s what he was going to do and this no stuff, he just literally didn’t recognize the word “no.” Was quite a character. Had been very heavily involved in the theater business and had properly recognized that the theater business was going to go through quite a dip and probably even as you know, many of them actually went out of business in kind of early 1960s, mid 60s. So he had transferred out of the theater business and into what he thought was the next wave, mainly cable television. A powerful group. They did well together.
We had lots of different names. The company I worked for at that point in time was called Western Microwave. Most of the stuff that Paul and Bob did together in the cable side was generally loosely affiliated under the name Community Television. So we had lots of different companies as we did the whole time TCI operated but in general that’s kind of what it was. Paul had a heart attack in 1966 and Bob and Paul started thinking about an exit strategy for him and it occurred to them that there were a number of different potentials but probably the best opportunity for them to see if they could get George Hatch and his team out in Salt Lake involved. And so I remember yet today, we were around discussing in those days, it was open seating of course on airplanes, so they were debating who had to get on the plane the next time Hatch flew back from Butte to Salt Lake and sit down next to him and try to sell him. Because of course, in many ways, he was kind of quote/unquote the enemy. Ed Craney knew him. Joe Sample and George Hatch and those guys were the broadcasters that more or less controlled that part of the world. In many cases were trying to keep us out of business or put us out of business as the case may be. So that was an interesting debate. I don’t know if Bob, when they flipped the coin, called tails and tails or what happened but he – because he was probably the better sales guy to – he ended up losing quote/unquote and rode back to Salt Lake with George on the plane by just watching and you know waiting for which flight he got on. He got on the flight with him and that kind of started I think the momentum for having the company consolidate all of these various different pieces and parts into a company that would eventually become TCI which we…
PORTER: Along with the microwave.
ELLIOTT: Yeah, yeah, I mean George was – he had access to some dollars which is what we needed mostly and so he became part of the company and at that point in time basically it now transferred into more or less a 50/50 partnership with essentially Bob and Betsy and George. So George picked up Paul’s part of the process and we started kind of sweeping enough of these other minority interests that were around such that it would begin to have a nucleus of a company. And we went through a naming process in kind of the late 1960s. Actually filed a name – filed two or three names before one stuck but Telecommunications and TCI was then actually formed in 1968. Still not public of course, but it was formed. We went through then some financing activities. Continued to grow fairly nicely and then went public in 1970. Along the way you know things happened. I think Bob and Betsy clearly recognized that the company was not going to be successful growing at the rate they wanted it to grow if we stayed in Bozeman. I think they loved Bozeman. Certainly all of us who worked for them loved Bozeman. It was the principle reason I actually gone back to work for them. I’d gone to work for them in the first place but it was hard to travel into that part of the country at point of time. It had a lot of things going for it. It was well-known as the gateway to Yellowstone Park, etc. etc. but still you know you just had people accidentally stop and see you here in Denver. It was a big deal for them to make the effort to go find you up there in the middle of no place. Snow weather a little bit tougher. So you know as part of the process we just kind of had to find someplace. I think Bob – we had a lot of pressure to go to Salt Lake and I think Bob and Betsy realized if we went to Salt Lake we would kind of disappear under the big corporate umbrella that George and his team had put together there. So it seem like the more logical thing to do was to come to Denver. They had some good excuses for that. Along the way they had picked up the Collier systems here that run from here up into the north into the panhandle of Nebraska, northeast Colorado and Nebraska. And to get the franchise transferred they had to live in the state. So they actually lived in Scottsbluff, Nebraska a year on the way from Bozeman to Denver, then subsequently they moved on to Denver.
PORTER: You mean to own the microwave?
ELLIOTT: No, it was not really the microwave licenses. Those are Federal licenses. It was the state, I mean the local franchises. The city’s franchises. Scottsbluff, Alliance, so forth and so on. To get those franchises transferred you had to be able to sign as a resident of the state. As you know this is now long before 1984. This is 1964, 65 timeframe and as such, you know the cities could do whatever they wanted to do essentially. That was one of the acronyms of that particular part of the world. That turned out of course to be a nice addition to the company. It was a pretty good sized addition for us at that time but we also picked up some great people, lots of great people. But of course Dave Willis and Bill Brazeal came from that Collier operation. Were all instrumental in helping us grow as we went forward from that and the microwave part of it we then wrapped in under the umbrella of essentially the company we operated in this part of the country called Mountain Microwave. And Mountain had been started to take signals from the east slope area in western Colorado. So at the same time we were building a lot of things, actually slightly later but up in the mountains, Montana, Wyoming, Idaho, North Dakota, South Dakota area, we also had some operations going down here. Start building out things like Salida, Grand Junction, Montrose, you know that sort of thing. Of course, Grand Junction was kind of a plum over on the West Slope and you probably remember King Rex, K Rex over there and all of the things. I guess you can take your name to that if you wanted to. And so, we ended up with the actually a partnership with United, with Gene Schneider and his bunch to build Grand Junction and built the microwave on over there. So it was all going on in kind of the mid-1960s. I was pretty busy running around trying to keep all that one way or another working. Mostly up in the northern part of the system, Ron Roe and Cecil Emery and some of our guys that had already moved down here and were managing the microwave activity down here at that point in time. Also, it just turned out a coincident with that for some other reasons; Bruce Merrill and Bob had been talking for some time about maybe combining their activities. So as you know Bruce was the guy that took the independents out of Los Angeles and moved them across essentially East into – really everything around the country.
PORTER: Arizona, Texas.
ELLIOTT: Yes, Arizona, and into Texas. He was by that time he was already to El Paso. His plum was Phoenix. Bruce had – this was in Phoenix kind of like Bill Daniels was into Denver and so Bill of course had had the franchise here in Denver forever I guess and I don’t know the exact dates anymore but Bruce had had a franchise there in Phoenix forever and of course neither one of them had built until much, much later. But Bruce was without question one of the original entrepreneurs in this space and of course had all kinds of things going. He had cable systems going. He had microwave operations going. He called it American Television Relay and he also had a company called AMECO as you know built a wide range of products. Almost everything actually in the cable space. So we had looked at combining our systems, actually going back into the late 1964, early 1965 timeframe when Bruce was a lot bigger than we were then and when it looked like we would probably – he would more or less acquire our microwave side. Not all of the operations. By 1967, when we actually got the deal done, Bruce had went through one of his famous dips along the road and we had acquired him. We were busy at that point also, looking into how we were going to integrate ATR facilities one way or another and what they were going to do. Coincidentally, with all this other stuff in the microwave process, Bruce had gotten really aggressive in 1966 and had filed the LA systems all the way across to Atlanta and up the East Coast. We had all begged him not to do that. He had been nibbling along, moving them kind of a few hundred miles at a whack and consequently had entirely had the ire of the broadcast community and essentially AT&T. But the telephone community descended on the FCC to stop him and while under theory, federal regulation isn’t supposed to work this way, the guys with the big bucks usually control the circumstances and so we were quite nervous that if you did something that aggressive that it might have some bad repercussions. I don’t think any of us thought that they would be as bad as they were. The FCC put a freeze on use of all microwave for CATV purposes in 1966 and that made it miserable. You could in fact get some waivers to essential do some additional power splitting or an occasional case to put in one repeater, kind of a spur sort of a thing off your backbone but they basically were really focused on shutting down essentially, leapfrogging or backboning the signals around the country. So that aggressive filing that Bruce and his team made to take those independents right across the country and up the coast really clipped our wings there for a while. It put enough damage into the process, if you will, that by the time it made any sense to maybe start thinking about that again, other things had moved on. That system was never built. It was a tragedy in some places.
There’s a story that’s not told, I don’t think, in the history books much but it’s a very good chance that the whole process of using independents to essentially crack through the markets would have looked differently if in fact Bruce would have been able to do that. There’s no question in my mind that the concept of superstations would have developed much, much earlier and of course those independents out of LA would certainly have been in the lead position to become basically the superstations of the country and of course would then have had the underpinnings and financial wherewithal to attract the kind of programming that you need to really make that sort of thing work, so forth and so on. So there was a misfire if you will in the 1960s that about 10 years later happened with satellites. And that was too bad but from our perspective, we were busy anyway. We were growing as fast as we could grow, I think, given the access to capital, etc. etc. Expanding these microwave systems. Picking up additional microwave systems and eventually put together by far the second biggest microwave system in the country, second to AT&T. Now admittedly there was a big step from one to two but we operated by the mid-1960s in some 17 states in the western part of the country, on the way at one point to operate in some 38 states and we were pretty busy. Picked up a lot of systems along the way and consolidated them. Got scale economics. As you know Bob and Paul and in later years, John and me, there really was one word that was our mission statement “Growth” and there was one way you drove growth, principally and that was to drive scale economics. Now of course, they tried to avoid making a profit, so they didn’t pay taxes and lots of other creative ways to move all your dollars to drive growth, but it was never a mystery from the day I went to work for Bob and Betsy what the job was and the job was to drive growth, period. It was fun process.
PORTER: When you are at this point, where you’ve got the microwave and now ATR, the old, I guess it’s WIC…
ELLIOTT: Yes, when we put it together, it was long before TCI. All of this was pre-1968. It’s pre-1970 for sure when we went public, so this was done under the corporate umbrella at that time of Western Microwave. We had a number of divisions at Western Microwave including what we continued to call Mountain Microwave, which was the one that operated here in Colorado, Nebraska, part of Wyoming, over in Utah type area and then we went ATR down there.
PORTER: But you had headquarters here in Denver.
ELLIOTT: Here in Denver, yeah.
PORTER: So you would travel to wherever the microwave location was that you needed to check on or to install or to modify or whatever you had to do?
PORTER: But there came a point where you pretty much through with the microwave growth?
ELLIOTT: Well, there was a transition I think, Rex, in 1967-68 timeframe through obviously our affiliation with George Hatch and his team in Salt Lake; we thought we had an opportunity to step into offering essentially national broadcast delivery processes. Whereas you know, in those days, one of the ways the major networks maintained control of their affiliates was they paid to get their signal to affiliates. So they contracted, obviously with AT&T at that point in time to move the signals largely across the country from New York into LA and then up the West Coast. So there was different points of microwave.
ELLIOTT: Right, via microwave. They reversed those processes and they would move the signal in the opposite direction. Kind of an outgrowth of an old concept that had been around for years in radio and networking schemes. Those guys were charging at that point in time, $53 a mile a month for that. We were netting out of our CATV, a small market TV station, microwave systems about $16 to $17 a mile a month. So being a fairly aggressive bunch of guys, we’re saying “Gee, you know with that [belt] there of some 30 bucks a month, 35 bucks a month, -- a mile a month, we ought to be able to build a system and operate it and do a better job than AT&T can.” First of all we’re video guys, etc. etc., and secondly we don’t think we have the cost structure and overhead that they have, we should be very competitive in that space for substantially less dollars. The first system we filed and went through hell getting this granted because of course AT&T kept putting pressure on FCC not to grant it, was from Denver to Salt Lake. And we started carrying NBC from Denver to Salt Lake, where the check came from NBC in 1969 and that was system that I felt was a real breakthrough sort of thing for our company in the sense that it now set us up to be looked at as a company that could offer very high quality, extremely high reliability systems essentially to the network.
PORTER: Salt Lake City, how many – did you take the NBC signal to stations in all the in between to Denver and Salt Lake.
ELLIOTT: We did. We had to drop essentially at Grand Junction but if you look at the cities between here and Salt Lake, it turns out its essentially Grand Junction. (Laughter) So in that case, that was really what happened there. We were very successful there. We did some firsts. It was the first non-Bell microwave where the check came from NBC. I was proud of that. I was proud of the engineering and installing and operating of that. I put the first computer operated fire alarm and monitoring system I believe in the world in place because again I was trying to solve that problem with essentially with technology not with people. The telephone companies in those days had 53 bucks a mile a month. Could afford to essentially man all of their important sites. They did man all of their switch sites. All the ones were in switch sites that made the system work when something went wrong of course the other kicked in.
PORTER: Routed around.
ELLIOTT: So I thought in order to be competitive and frankly I thought we could offer a higher degree of service if in fact we would do this and what I would consider would be a more modern scheme. Now admittedly that was an old CA 102 machine. It was pretty light duty. A PC, I mean actually a calculator that you have today has got more power than that did but it let me monitor what was going on 24 hours a day. It took all the "Gee, you know let’s not tell him" – this out of the loop – in other words what happened, happened. It was recorded. It gave you a chance to analyze what was really going on. It gave you a chance then to get back with the manufacturers and say you know you can tell me whatever you want to tell me, but this component is not working. It’s failing, you know. I could give them all of the records associated with that. You could actually prove what was happening on site. We’ve all noticed the years that telephone company – the system works better on the weekends when people are not working. Turns out our cable systems are reliable on the weekends. I mean and their principle problem with failure and of course they always have some way to camouflage that and say they really didn’t do it but when you can monitor then you can figure out what actually did happen and more importantly you can train people and you can work with them.
PORTER: Did you do more links after that?
ELLIOTT: Yes, yes. I mean that one was the first one. The second one that we built was essentially laying CVS over the top of that same link. Then we built the whole state of essentially Washington where we interconnected in Portland and distributed the microwave systems for the networks throughout that state of Washington. Then we about that same time as we got successful at that, some of the other guys started to do this sort of stuff around the country. Midwest Relay built their system up in the Minneapolis/St. Paul area. Put the signals around there. The system that went from New York north was built. The system down in Texas and across that part of the country was built. All based really on -- essentially we had cracked the mold if you will and started that process. We then also brought the signals from Omaha to Denver to Salt Lake and included then the rest of the networks. In other words, ABC and typically once you picked up all the networks, you also picked up PBS. The kind of deal the Telcos had had all those years was PBS got essentially half price. So whatever they were charging – now remember they were 53 bucks a mile a month in the mid-60s. Filed to go to 86. Went to 86 and filed to got 101. You know so there was some room in there for the rest of us. Now with the pressure that we were able to bring to bear, they backed off and actually for us it was kind of a problem for a while but they went – they actually rescinded and went from $86 back to $53 a mile.
PORTER: You drove the rates down.
ELLIOTT: Yeah, the networks liked us. They liked us a lot because they would have been paying $100 a mile a month for that route nationally. We were saving them just on the deal. 53 to 86 which actually went to we were saving the 70 million bucks a month – a year. So you know and we were doing a better job because we were focused on video. We were all video guys. We actually understood when the TV stations, affiliates whoever they might be – Denver, Salt Lake, Seattle, you know, Omaha, whatever, when they talked about piano keying or some other thing we knew what that meant. So I like that. That was a fun time to be involved in really something very different. The first of sort of thing. It was exciting during that same period of time we began to realize that satellites were going to be the next wave or at least I did. I’ve always been a futurist and probably be in both worlds.
PORTER: So does this mean 70s era again.
ELLIOTT: No this is back in the 60s too.
ELLIOTT: In 1967, the FCC as you know, satellite do these rounds, they had these rounds and they opened up and there’s lots of comments and it goes on and on and there’s a round. And they close the round based on something and there’s all this negotiation goes on – on who gets what slots and eventually those slots get granted and that round gets built to some extent and there’s usually another round. And that particular one closed in 1967 under theory. So we were one of the original seven [?] sat filees that got into that early round with a partner of North American Rockwell. As it turned out, along the way, they had some other opportunities. They had some opportunities to chase some massive business and big mergers they were looking at such that they decided not do that and consequently we decided not to do that. And it’s always been kind of an interesting kink in history. I think if we would have launched, we would have essentially been RC or Americon of that space and would have probably captured I think most of that business. So I think probably it was a mistake that we didn’t launch. We would have had to find the money. We would have had to find somebody else…
PORTER: How expensive was it?
ELLIOTT: Well, you know to get a bird up in those days was in the neighborhood of a 150 million bucks. It was three times money. So it was expensive. It’s hard to… it was still considered kind of black magic. There’s another story that goes with this but you know the Canadians launched in 1972 and Western Union actually built their early business on Aniki birds with an agreement of labor essentially between United States and Canada. And then Western Union launched in 1974. So to kind of give you a time frame here, that stuff all started in the early 60s. Got serious in the mid-60s. The round was actually closed in the late 1960s but it was the mid-1970s actually before that came to fruition and you started seeing domestic satellites of the kind that would do us any good. The dual synchronous wideband satellites in the United States. In the meantime we had moved ahead and started into the domestic data business. NCI, Golcun[sp] and his team had built that route from Dallas to Chicago and it looked like they were going to be able to be directly competitive with essentially AT&T and so that kind of empowered the rest of us to start looking into that sort of thing. Because you know Jack was in it seemed like every day negotiating with Bob, who had joined the NCI group. Golcun[sp] had this theory of taking all these little common carriers all over the country and putting us together as a group and creating essentially a pretty powerful combine that would compete for long haul business. Lots of different reasons why that didn’t work out too well. In any case we then had built, basically took the time and effort and dollars that we would have put into the satellite environment and built what we called the Southwest data system and that was over at an old ATR plant we put some high pops in and so forth but we built a message data system in from Phoenix to LA to San Diego and vice versa. And along the way picked up the Cubic business which was a company that did the monitoring for the Navy on their bombing range out of Phoenix there. So we carried all that traffic back to Miramar for the Navy. That’s was kind of our anchor customer in that case. So we got that baby built. Was doing okay with it. It was very, very tough business as a regional carrier. NCI of course was still really, really struggling and everybody was – I was in a number of pools predicting the day when it would declare bankruptcy. You know, it was just turned out that it was hard to make that business go unless you had a national footprint. So we along with a lot of other people were very aggressively busy filing a national footprint. We at WTCI -- then it was WTCI. This would have been in the 1972, 73 timeframe. Were in fact putting together and did file a national data message system. However, the business was moving along in strange ways. The FCC had allowed the Southern Pacific Railroad Company to have waivers to carry common carrier traffic on their old private microwave system. Which to this day I don’t know quite how they pulled that off. And when they did that they had, we had all taken the dollar mile a month, which had been around forever. That was the rate that you got for private, essentially dedicated circuits. I mean that’s what Telcos had been charging forever. We were down into the 20₵ a mile a month and could show that we could make pretty good money at that. Actually to tell a story correctly, at one point the AT&T guys were at $3 a mile a month but they had now come down to a $1 a mile a month and most of us were well below that. The Southern Pacific guys filed 5₵ a mile a month and all of sudden that whole business didn’t look anywhere near as attractive.
PORTER: How many circuits did they have?
ELLIOTT: Not very many. (Laughter). Their instrumental cost was almost zero because they were allowed to put it right on top of their old private microwave system and they were trying to make a splash. As you know that was the company the eventually became Sprint. So we were looking at that and saying “Oh my gosh, this is maybe a little different economics than when we thought the competitor was a buck.” We thought we had some pricing elasticity below that. Carter Page as you know was the president in those years and primarily a CPA and financial guy that had come to us through ATR acquisition and right around myself was more or less trying to figure this stuff out. It was a shock. So essentially what happened was we then did a deal with NCI where they used our route from Phoenix on over to that West Coast was their entrance link to the West coast and essentially the banks gave NCI enough dollars to finish a few of their sites which had be sitting there really half built for a couple of years to get to Phoenix. So it turned out to be a winner for both of us. Loaded our route up. Gave them a national footprint at that point in time and of course, history has shown what happened there. That company became a really big, very competitive company over time. But that’s how that series of events went instead of us launching a satellite. It’s always been interested to me to apotheosize kind of what would have happened if we would have launched that bird. So we moved on and we did a lot of other things. In the 1976 timeframe, as a long story to this, well as a favor to the White House I put together the first transportable uplink in the world that was commercially licensed. We took that thing and it was a long story building that baby but we took that thing up to Jackson Hole and basically was able to bring the process of Jimmy Carter floating a snake out of there back to the world. So that was the leverage I had to get the license because the FCC didn’t want to grant this transportable stuff. They were still in this class A. You had to have a 10 meter sort of stuff but that broke the back of that. One of the things that I’ve been proud of in my career was that I’ve been able to actually introduce new business segments as an example in the case of the non-[?] microwave thing. Was able to build a whole new business. A whole new set of opportunities. In this case, it wasn’t too long before a lot of guys were entrepreneurs out there putting together these transportable uplinks, were moving around. But we had the first one and the only one for several years. We did a lot of network business with that thing. We hauled it all over the country and it made the networks really look good in a spot and it made us look good. We went into Elizabeth, North Carolina as an example which is right on the coast. There is no way to get anything out of there and a little team there, one of the local colleges that had national stature that year and did the playoff for ABC Sports. Almost didn’t make it. It turned out the DC part blew up at that time. So I had my guys go around and start taking the batteries out of the rental cars and putting them in there and were scrapping those things to keep the things running. We’d take the other ones out and put them back in the car and try to charge them up you know and keep things going. Well, we were running out of batteries. It turned out that as soon as we put out the call for batteries, we had more batteries than we knew what to do with. All of those kids parents that were there, damn sure didn’t want to see that thing go off the air. I mean this was their proudest moment in their entire life. (Laughter)
PORTER: A caravan of batteries.
E: Lots of batteries real quick. So you know, those are all kind of fun things that happened and also first that were fun to do. We also in the 1976 timeframe through a long term interest that I had in fiber optics going clear back to actually AT&T, we were using fiber optics down there because the cost was not really an issue clear back in the 1960s. We followed fiber pretty close and we put up fiber in NORAD down here to take essentially information in and out of the hill. Of course, the Air Force liked that because it was not going to essentially clot any E (t) pulses in the fiber. So to my knowledge that was the first commercially operated fiber link in the world. I know it’s the first one in North America. So you know, it’s fun to again say “Folks this stuff’s real.”
PORTER: I think the only people that would argue with you are probably the Brits. They claim that had something going…
ELLIOTT: Well, there was a lot of stuff that was done in conjunction with essentially government support one way or another around the world and yeah, you know but I don’t know…
PORTER: But certainly here in the United States and I’m not sure it wasn’t in the world. I’m just saying they probably…
ELLIOTT: Well, these are always an interesting argument. I mean remember in those dates and point in time the PT&T’s, the post telephone and telegraph around the world were really owned by the government and that’s essentially a taxing authority. I mean they could do anything they wanted to do. Didn’t matter if it made any sense or not. So I’m trying to differentiate in here in terms of something that yeah, we had to make money. I mean we were in a growth mode. We had to produce cash flow. So I know in that sense it was the first one in the country and I would actually probably argue the first one in the world that legitimately operated in a non-tax environment. But interestingly enough, clear back in the 1970 timeframe, we had decided that wanted to try to see if we couldn’t carry essentially the rating networks around the intermountain west here for a number of different regional networks. And not surprisingly one of the principle drivers of that was George Hatch and his team with their Intermountain Microwave Network or radio network which I believe was the biggest regional network in the country at that point in time from a geographic perspective. So doing that with kind a traditional sub-carrier techniques on the microwave systems was not very efficient and we began to look into other schemes. The scheme that I thought made a lot of sense was to see if we couldn’t essentially take the whole T-1 carrier scheme that had been around by then forever to of course, multiplex, multiple places on a pair of twisted pairs and just basically up convert that and hook it onto a microwave system. So we contracted with Don Kirk, who had been one of the famous engineers out of the Milt Shapp, Jerrold days and had his own company at that point down in Florida to help us do that. Move it along and demonstrated that the process in fact worked to the point that we thought it was the right thing to do. It had some pretty innovative schemes to deal with all of the intermodulation and other sorts of junk that you find up on the top end in one of those old non-linear microwave systems that are modulation with video. But you know Don understood all that quite well and I think I understood it quite well and we know how to try to deal with that and basically decided that we’d move ahead. We filed with FCC. You had to file your entire spectrum with FCC in those days. Not only your base video that you had on microwave but all the other things that you might incidentally have there. Right down to point of even maintenance types of things. Like the wires and stuff that you use to talk to each other to maintain the sites. So we filed to put this digital modulation on the system and the FCC literally came unglued. For years, unbeknownst to me and I don’t know why I had missed this but it was illegal to modulate a carrier with digital modulation. And of course that was an old takeoff of the military pressure. Putting pressure on the FCC so that they were the only ones that could use essentially digital modulation. And that was kind of a way that they had of more or less maintaining security because they felt like if there wasn’t a bunch of receivers that could in any way handle digital modulation not just in of itself, then a step up. So man, we got some really nasty responses from the FCC on this whole issue of dealing with digital modulation. Of course we went back said “We don’t see any reason why that doesn’t work. It’s in the public interest to do that.” We had some political help from some of our senators and so forth and so on. The FCC then came back and said well, you know the equipment you have out there is not type accepted for digital modulation. That was their way to try to put a stop to that. So old Don and I we gathered up one of everything we had and we had a lot of different kinds of old microwave around out there from A to Z. You know, old Jerrold stuff, old Motorola stuff, old Atlanta Pacific stuff and on and on. Collins, Raytheon, on and on and literally went through a big elaborate type acceptance on all of that stuff and got it all type accepted because we just made sure it all fit within all the parameters if the FCC required them. There was really no way they could say no for digital modulation. That was for me kind of an eye opener I guess and a turning point somewhat in my own career where I started to really think a lot about how the transition from essentially analog to digital was going to happening. At one point in a DOD space they had actually projected they would in their case have everything digitally modulated even by 1996. Then they rolled that forward and rolled it forward and rolled it forward but it was really clear that the way the by then the t-one carrier equipment was coming off the production lines that digital has a tremendous advantage and you either get it right or you don’t. But you don’t spend hours and hours and hours tuning and tweaking and fixing and so forth. You get the recipe right and the production lines just run and the cost comes down, etc., etc. and this was even before Moore’s law. But the process of going digital really makes a difference and I enjoyed that project even at the time. Don was a great guy to work with. A really sharp guy but I also look back at it now as a real turning point in my own thinking of saying “Gee, now this digital stuff is going to work” and you know, there’s more to talk about later but that was all kind of captured in the 70s timeframe, the sort of things that we were doing in the building all these high capacity, high reliability networks, getting satellites started. Doing a bunch interesting things. Our company at essentially was WTCI at that point in time being did a lot of contract. We did a lot of worldwide consulting. I personally was involved in a bunch of international stuff that was a lot of fun. Turn on and testing the Spanish air command system. They tried to call it essentially a commercial system but it really was a defense system. Turn on with a bunch of guys that I thought was the best in the world at what they did. I thought that our troops at WTCI were the best can-do troops in the world. AT&T couldn’t get the Saudi Kingdom network turned on. They just couldn’t do it and it turned out that we took about 30 guys over there and turned it on in about 90 days. You know, it was just fun to have a bunch of good people that were – you tell them to do something, you better get out of the way because it was going to happen. Might not happen the way you wanted it to exactly but it was going to happen. And of course the reason the AT&T guys couldn’t turn it on because they would drive in some cases 300 or 400 miles out into the desert to work and then drive all the way back to Riyadh to their compound that night. Well, of course you drive 500 or 600 miles a day you don’t have time to do anything else.
PORTER: Comfort was more important than efficiency, right? (Laughter)
ELLIOTT: We actually took trailers. Moved them out in the desert. Put a little generator there so we could hopefully have some air conditioning. It didn’t always work. Put a hand rig in so they could talk to each other and put a truck on the road and essentially take supplies to them. The guys could actually work. Of course out in the desert there was nothing else to do. They worked 20 hours a day out there. Mostly at night. It was so hot in the day time. During the heat of the afternoon you’d have to quit but got that thing turned on fairly quickly. So I was always very proud of being part of that can-do kind of operation. Liked it a lot. Did some over water stuff which was kind of crazy. Out of LA. Became pretty well internationally known as the over water propagation expert. Not something I wanted to be but you know, you do what you got to do, but in the 1980 timeframe, John basically – Malone you know had joined us in 1973 – said “Look Tom, you know, the cable side of the house is 90% of our business. This is 10% of the business. You’ve got to move over to the 90% side” and I was, argued with him. I mean I’d always worked as kind of a technical consultant and whatever with the cable folks and really enjoyed that. Dave Willis is just a terrific guy and maybe a guy I feel most blessed to have worked with in all these years. Just a wonderful guy. But John felt pretty strongly that it was time to relook at what was going on here, so I moved over, really kind of reversed roles and moved over to the cable side of the house full-time and more or less consulted with the microwave satellite, fiber side of the house. It turned out that a lot of the experience I had really benefitted me a lot because we were as a cable industry at that point doing all these crazy franchise filings where we were proposing every kind of communications known to man. Home banking, home shopping, electronic mail, etc. etc. So I took the suburban system here in Denver, Lakewood which we had operating in that point in time and converted it to a test platform to test all of these kinds of things in real world time environment. That was quite a struggle. It was interesting that we had filed with all the cities about this good, great two way stuff but you actually went out and tried to make a two way amplifiers and so forth work. They didn’t work. So we went through a huge round with all of the manufacturers. Put a lot of pressure on them to get the right kind of diplex filters and so forth so that you could actually cascade 15 or 20 of these things in a row. Which we needed to do that in those days. This was pre-fiber remember and make them work. And we did. We worked hard on it. We got the system up and running. We then in turn carried in a non-commercial way, in a test sort of a way all of this stuff. We put a home security system in. Monitored a lot homes here in Denver. They were friendlies. A lot of them were employees. They were city employees. People we knew. In some cases just people, we would knock on their door and say they wanted to be part of the process or whatever. Kyle Ackers was one of those guys. He was of course the famous newscaster in town at the time. On and on and did high speed data. Worked with Stanford Research to put 10 megabits scheme between Golden and Lakewood. Monitored that for several years. To look at the bit air rates and this stuff really worked good as it turned out. Did the home banking, home shopping, all of those sorts of things. In all cases found them to be technically feasible but commercially probably not successful at that point of time. And that’s actually what led me to get really serious about “Gosh guys, we ought to fix this basic stuff.” Turns out that the same thing that was costing us so much trouble with this these more exotic services were our major cost problems with our core business and in those days we still had the f-fittings that were many of them two piece. All of them I guess were two pieces but some had the little bitty ring and some had the bigger ring. I guess you were first class if you had the longer compression ring. We had things like I discovered there as we delved into this that we were paying 3 to 8₵ for those things. Typically about 5₵ and we were spending about 50₵ per year maintaining them which is crazy. We would have been much better off just spending another few cents on the device in the first place and dropped that maintenance cost. So our lab there started transitioning and focusing on driving the costs down of operation and driving reliability up for the plant. And we built a little expansion loop tester there and started taking the mystery out of all these loops. Wide loop circular loops, square bottom loops, round bottom loops.
ELLIOTT: That’s right. I didn’t understand the mystery. I knew some of the scientists and followed the literature over the years but probably not delved into it a lot because I did more on the microwave long haul part of the business. What I discovered all of the expansion loop testing that had been done until that point in time had been time without strand. So the loops had set there and moved around in the air and go wherever they wanted to go and the physics of that is very different than if you grab both ends and slide it back and forth on a piece of strand. So of course we put strand on our expansion loop tester and quickly began to take all this nonsense and folklore out of these different kinds of loops. It turned out the square bottom loop, you know, is the right way to go because of course you have four radiuses. If you get those four radiuses, the two going into the loop, the two essentially making a bottom loop, make all those the same, you now have four points for that cable work against as compared to any other kind of scheme that you can do. Once again, there we learned that you had to be very careful because if you weren’t, one of those radiuses would start to leak and then all of the movement would be contained in that one spot. So we started looking at everything. The F fittings we put a lot of time into. Over time I kind of segmented my team there. I think Barry Smith and his work essentially in cable and fittings; I believe he was the most knowledgeable guy in the world at one point in time on how he actually made this stuff work. He wasn’t necessarily in the materials side and so forth like you find in the vendor side of the community but in terms of knowing the practicality, I had him spend a lot of time at the Gilberts, [LRC’s], the Pyramids and you know the different TPCs, different connector companies learning how the screw machines work so that we wouldn’t be coming up with ideas that weren’t practical to put into production. We had a very good working relationship with these guys. Barry – even yet today I believe is one of the world’s geniuses in understanding how you do this sort of stuff from A to Z, so that it’s practical and it’ll work and yield the results that you want at the cost points that you need. Dean Sites [sp] became my expert on passes. Turned out I learned that the reasons these passes were squirrely is they all tested in the factory with 75 ohm resistors essentially with a perfect termination and yet we would go out in the field and screw a trap on to them, which is a terrible mismatch as you know. So we started testing all this stuff with appropriate mismatches and boy the vendors just went nuts. “What are you guys doing?” We said, “Well, you sell us a tap and you sell us the trap. I mean least in your own factory test these things with the trap screwed on.” And they don’t want to hear that kind of stuff. And that’s why a lot of the hybrids didn’t retain balance and consequently all of the other isolation and performance specs that you needed out of the little [?] when they were round is because they hadn’t been tested in what I considered a real world mode. Dean became very good at that. We started looking at power supplies. We found that most of the standby power supplies had crazy transfer characteristics and many of them weren’t regulated. You build your system to getting 40 volts to the end of the line and you have the 40 volts for the first 5 minutes that the power went into standby – the thing would start sagging and you would have humming at the end of the line almost immediately. So you know we drove the process of saying "Gee, wait a minute we’ve got to have a power supply here that actually works" and Pat Kelly and Steve Wigo[sp] and some of the guys helped me with that and became very much kind of the world experts in that. In the meantime you needed a procedure and they actually used get the stuff out there and installed properly, get the construction procedures updated, get maintenance and installation procedures. Steve Willardson became I think the world expert in a lot of that sort of stuff. So out of that small group of guys, they literally began to change the way that cable industry at least from an MSO perspective and the vendors worked together to solve the problems such that it would meet the cost points we needed and also do the job for the consumer and it was really interesting. I spent a lot of time in all of the different vendor’s plants in those days – which I enjoyed doing of course, but saying well, you know guys, if I buy this stuff, why is it you can’t tell me what the specs of it are? Oh, that’s proprietary. We can’t tell you that, you know. So you’d have goofy things like you’d have cable that was called ½ inch cable that ranged anywhere from about 505 nominal down to 486 nominal and now the connector guy is caught with trying to build a sleeve trying to go into the smallest one and you had a jam that collapses at down to that sleeve big enough to go to the biggest one. And you had all this funny stuff going. You had a situation where you would call any of these guys and these were all good men, manufacturers but you’d say I need an F-59 fitting and they would say well what cable did you buy? I mean, you actually had different fittings. On theory that it’s all F-59 but you needed to know if it was Commscope or Times or whose it was in order to be able to make it fit. Well of course what would happen is our – we’d change cables or our guys would get the fittings mixed up in the trucks. We’d have contractors come to down. You know so you’d have guys with knives carving up part of the dielectric so it would fit a little better. They would be folding back extra braid trying to make it fit the big one. You can imagine the times there would have been environmental problems. In other words, water leakage problems and stuff. We had the problem where the F-ports would seize on connectors because they would just screw it into aluminum. Finally I said there’s only one way I think we’re going to be able to stop that is that we’ve got to put like to like. If we’re going to continue to use brass fittings, which it seemed for various mechanical reason we needed to do, we’ve got to get brass ports. And boy was that a battle. It was like a 3-year battle to get that started. I believe everybody even in my own company didn’t believe I’d get that done and that was just a huge challenge.
PORTER: I didn’t think so. I used to wonder how you could – I mean you were going from company to company, really straightening things out and I always called that the era of taking on Tom. (Laughter) But you did it.
ELLIOTT: Yeah, it was a lot of work. I was fortunate to be working for a big MSO. So that I had some leverage with the vendor community. I’m a pretty – really a physicist at heart, but I’m a pretty pragmatic guy I think because of going up there on that ranch and secondly you know I had a great environment. We had John who among all his other degrees has got a master's in electronics. So when I would make a pitch to him, he understood it right away. Whereas some of my friends that worked in other kinds of environments – some great people, they all contributed to this industry, but when they made their pitch to a gentleman or gal who had come up say through the marketing background or maybe a financial background and was now a CEO, the other person didn’t really intrinsically understand in their gut that this was important stuff. This probably has to be done. What this guy is saying makes sense. Whereas in my case, you know Malone got that right away. You could see – he was very helpful. I mean in some cases under the concept of huge financial leverage you know he would say “Well, gee, you solved that problem and it’s not going to make much difference to our company.” Where he could see if I could solve an F-fitting problem as an example. Those things are every place. Would make a huge difference to the company. He got it if you will. He understood the laws of physics quite well. He certainly understands the laws of numbers really well.
PORTER: But you didn’t just do that for TCI. You ended up at the auspices of the SCTE.
ELLIOTT: That’s a whole other story of course because by the mid-1980s when we were going to – it actually started all of this in the early 1980s, 81, 82 timeframe – by the time we collected enough information and really started making some [?] I believe I got as an example the coax size, a ½ inch piece of coax was literally a ½ inch piece of coax with the appropriate manufacturing policies but you didn’t have it all the way from this size to this size with the tolerance around that without it all or least nominal ½ inch coax was 1985, I think. So, you know we had those kinds of specs inside of TCI and they were having a big impact because clearly a coaxial company is not going to build me a piece of coax and build somebody else a piece of coax. You’ve been in that business most of your life. That makes no sense. You can’t stop these machines and all that kinds of nonsense. So by definition once they built it for me that’s what everybody else got and everybody else was very supportive. I was an aggressive member of SCTE Engineering committee in those days. Was very actively involved in SCTE, etc. etc. So all the rest of the guys were out there saying "Good for you Tom.” Do the best you can there and they were very happy when I was able to make progress on that. The one piece F fitting that we got in place in the early 1980s, I mean I think everybody in the industry said "There’s no way you’ll ever get that done." It’s going to cost 10-15₵. We’ll never pay for that and yet once we got it there and got things moving, I mean the whole industry just adopted it literally overnight and it was better off for everybody. I mean it was better off for the manufacturer, actually had something they could charge a little bit for. You could train people now. You could actually show them how to use a pair of crimping tools because those pliers didn’t really work very good with that. Pliers and whatever else. Almost nobody used crimping tools on their old junk. So now you could actually deal with your craftsman and help him and teach him how to do things and they would do it right. They liked to do it right.
PORTER: Built tools.
ELLIOTT: Built tools and so on and so forth. That was all going well in the 1984 timeframe. I went to SCTE and said “Gee why don’t we let me start a standards operation here.” They were so afraid of the word standards for legal reasons, they made you call it practices. So we started this whole hierarchy of a practices group and the first one that I formed under that hierarchy and I was real careful to put all the approaches in place. They’re still there today actually. Headed toward what I hoped and dreamed would be an ANSCII process and that’s another story and eventually got there. And Laurie Smith should probably get the credit for that. She took all those EIA documents and all the IEEE stuff and synthesized that so that I could actually make a whole hierarchy of documents that show you how it’s built, the governances in place, etc. This was before we used a lot of word processors so she did this on the typewriter. God bless her and you know those documents have been amended to some extent but they are still the backbone of the way the process works. The committee I put in place was Interface Practices Committee because really the thing that was costing us money in the cable industry, in the plant side was the interfaces. We had good cable, had good fittings, had good passive but those interfaces where you hook them together was where the problem was. It was where the water got in. It was where possible craftsmanship problems. It’s what caused this trouble that in turn was what cost us a lot of money and also irritated our customers. So we attacked those interfaces aggressively and we began through that process to create industry specs around cable, around fittings, around these other things which is where the big dollar issues were in the early days. So that was something that I am probably pretty well remembered for is just aggressively taking kind of the old life cycle cost kind of approach which is common in the telephony business. They’ve been doing that forever. I think they used this life cycle cost for largely trying to pull the wool over the PUC’s eyes. If you use life cycle cost right, well you look at what your original costs are, you look at what your maintenance costs are and you look at what your replacement costs are, that is a powerful analytical tool that’s old and been doing it forever to really understand how you should make your investments in whatever it is you’re making them in. And that will quickly surface then where is it that you need to pay some attention to things. So that was a lot of fun. I mean we put a lot of time and effort into that. That was about the time I was beginning to get really interested in digital television – was in the mid-1980s. It seemed to me that the time had come for us to start thinking about what were we going to do as the follow on to essentially NTSC which has been a fantastically successful processor, specification or standard. Really the entire world uses it and that old standard is used, was developed really before the Second World War It was largely put in abeyance during the war and was finished after the war and then was adopted worldwide. Admittedly in Europe they go at 6 MHz and call it [?] but it’s the same format. The French of course had to change something so they got [?].
PORTER: They always…
ELLIOTT: Something’s got to be different. So they changed the way they did the modulation on the color but in general there’s a real lesson there. You need a standard that will last a long time if you’re going to have a commercial success and it occurred to me as I was looking at this stuff that doing a hybrid scheme which was where HDTV, which I think all of us thought at the time was going to be the driver for the next round in television – was going to be news and everybody was talking a lot about using the systems that are associated with news. As you know that is essentially a component system. It’s a hybrid digital analog system. Well, I was kind of looking chronologically at the mid-1980s timeframe which was when we were doing a lot of really interesting things and I think consolidating or base, in other words from the technology perspective, actually starting to make things work. Get cable to work. Getting converters that would work. Getting amplifiers that would work. Getting a lot of this funniness out of there. Driving specs hard. Working hard at making things, getting the brass taps and ports in place. But I was also in the role of a futurist. Trying to understand what the next round was going to look like. Beginning to develop a lot of interest and understanding basically could we get to an all-digital transmission scheme for television and that was starting to pick up a lot of momentum in my mind because in fact on both ends of the system you had digital at that point. You had the digital techniques that were being used in all the major studios and so forth around the world for production techniques. Then of course the digital tape machines were there for those folks and then you started to see digital television techniques being used. Admittedly the early ones, I think the very first ones were shipped by Phillips didn’t do too well but you began to see digital processing on both ends of the system and it just seemed inevitable to me that sooner or later we were going to want to transmit between these two terminal points digitally. I mean all digital not a hybrid analog digital scheme. So basically the reason I think I was literally the only guy in the world that believed in that in that point of time was that nobody thought that the silicon substrate would hold below around 2 microns or so. In fact most people if you read the literature in those points were saying you know Moore’s Law is about out of gas, we’re going to have to go to some other substrate and people were predicting [?] as the next probably most likely winner but to be able to get the language down, you know much below a couple of microns. You could show if you plotted essentially what was happening with computing power from even the early 1950s that mainframe for going up about a decade per decade and the minis were going up a little faster than that. The micros were going up a little faster than yet than that and the risks were doing a little faster than that and interesting enough when I did that plot all of those lines converged in the mid-1990s and they converged at a 100 MIPS. We were actually at essentially about 10 MIPS in the mainframes at that point. So they were going to make another decade improvement I thought and 100 MIPS was what you need to do essentially a decomp, an inexpensive, you need it inexpensively but to do a high quality decompression decoder, you need about 100 MIPS. So I’m starting to think Well, gee if this silicon substrate will hold – you know you can just project it and lo and behold in the mid-1990s that will happened. So fortunately I was a big enough customer of enough people and sometimes a secondary customer of silicon around the world that as I would travel to the west coast or Japan they kind of had to let me inside the clean room, that was inside the clean room and they don’t like to let you do that because there’s a chance that you’ll contaminate things. Where you’ve got to go through, take all your clothes off, put on all the stuff, take them all off again, put on all the other stuff, takes a long time to get in there but they could hardly tell me no and when I got in there and talked to the lithography techs who were actually running the machines, they said “You know, I think we could do it now if the bosses would get out of our way”. I mean these are the people working there actually doing it and I’ve always found you learn more from the people really doing it than the characters who think they know what’s going on.
PORTER: Oh sure.
ELLIOTT: So, they would only tell me that if they thought I would protect them because their bosses where saying “You know, there’s no way.” In any case, that started giving me a great degree of confidence that we would in fact be able to go to an all-digital system. So I started working on that pretty hard. I actually filed the first I think public document of any nature that might have some historic reference at this point of time in 1988 in the response to the NOI, Notice of Inquire on HDTV to the FCC. Where I strongly suggested that we go with an all-digital system and actually had some papers written by a couple of guys to back that up and boy did we ever catch a lot of heck from that but the good news was that John Sie started getting on that kick at that point in time and he was our publicist there at TCI. So he wrote a fairly thoughtful paper on this and actually I think today Malone still gives him the credit for this idea but it tracks well before that and it was something that boy I would go to the NCTA engineering committees and all of my peers would tell me “Not in our lifetime.” You’re a good futurist Tom but this one you’ve got wrong. Not in our lifetime.” So that was one of the technology leading areas that I was working hard on but another one that I worked on pretty hard during that period of time was fiber. Fiber had become something that you needed to do with all of the franchise stuff that we had promised with the momentum that we had built with satellite delivery and now had a number of different programmers coming to us with ideas that seemed like would actually work in the marketplace but we just didn’t have the capacity. We needed a new medium and as you know fiber is very low loss but not particularly flexible. It’s kind of hard to handle. Whereas coax is very high loss but very flexible. I mean almost anybody can put a connector on it. So they are a great complimentary medium and we needed to move. Fortunately Jim Chiddix and his team had pretty well proven by then that it would work at their lab here in Denver and they were good friends. Dave and I would go over and look at their progress from time to time but we needed to break the financial conundrum so I worked with JC Sparkman who I think probably should individually be given the credit for the guts to make this happen. To put together a process, I was on the road for quite a while trying to make this happen where we essentially broke it up into three parts. We said you know we’re probably going to have to – it looked to me like it was a $30 million nut and we’re probably going to have to take our $10 million share of this – somebody who sells it to us is probably going to have to take theirs and the guy who makes it is probably going to take his. So we got Antec to sign up for taking their chunk of the medicine and we got AT&T who was supplying the laser to Antec and also built their early transmitters and receivers, to take their chunk. That was a rather historic day when JC signed that big order that essentially we paid $10 million too much and those guys both took a $10 million bath but what we felt would happen is that it would drive down the price curve such that and of course the fiber itself came from AT&T, the glass in our case in those early days. Such we thought that the whole industry would essentially begin to deploy fiber rapidly. Fortunately they did and that was a great coup I think for the industry. I think if JC hadn’t have done that we wouldn’t have had as much as a 3 or 4 year lag from the time we actually started deploying fiber in a meaningful way which was in the 1988, 89 timeframe to when it would have actually happened. I hesitate to think, it kind of scares me to think that if we would have waited that additional 3 or 4 years, the whole story of this industry might have turned out to be a different story and it’s interesting to note that was a tough decision. John himself didn’t believe in fiber at that point of time, not a big fan of it and most of JC’s peers were saying “JC that’s too risky. You just don’t really want to be doing that.” Yet he got it. He understood it. I think he understood what I was trying to do from a technical perspective, the complimentary nature of the medium and we just desperately had to have something that was more practical than EML and other kinds of schemes. I mean we were headed to super trunking with FM super trunking that had 1 ½ to 2 inch cables. God know where we were headed. I actually had my guys worried about what would happen if you had to start putting 3 inch cables on the wire because of course, can you imagine the wind loading, the ice loading. We had to do something so we could cut those cascades down and get more bandwidth out there. While the hybrid guys had done magic work in pushing up capacity, essentially bandwidth on hybrids, the problem was just not practical to cascade those things because of course every time you went up in bandwidth and really were stuck in the 22 to 24 dBm numbers. I mean you could got feed forward and push that a little bit but since the square law of nature of cable every time you went up in bandwidth you shortened essentially the distance between amplifiers and drove your cascade numbers up! It was a runaway issue that had to be dealt with. It seemed to me having been around fiber a long as I talked about earlier in blowing up the bomb days that fiber was clearly the right way to go and fortunately they could see guys that had shown it could work and now it was a question of breaking that economic logjam to get it done and JC did that.
PORTER: Where’s the first place that you put it?
ELLIOTT: You know I think the first one we put in of any significance was in Medford, Oregon and we had this terrible cascade up there that we probably were lying some when we said it was 45 cascades when it was probably actually 60 or something. I mean it was just crazy and we went into that system and initially broke it done into something like 20 cascade or something of that nature which you know in those days was something quite manageable. Lots of systems had cascades much deeper than that and of course the folks up there went from having out on the end of the line pictures once in a while to having great pictures right away. So it was a fantastic success and we used it initially fiber for cascade reduction and AML replacement. That’s really what the industry did in the first few years of fiber and then we started developing these techniques that helped head towards where we are today and that’s time maybe a good segue into talking about my time at the Lab. We had been looking at some sort of industry consortium to help us solve the kind of problems that I think all of us were interested in. I’m speaking mainly about the technical community here but it’s hard to do in an operational world. It’s hard to do in the pressure of the day to day operational P and L world. I have a little bit more of a science or technical bend than some so I was really interested in this. Had worked a lot on it. Fortunately along the way had found a real friend on this idea in Dick Leghorn. Dick I think said without question to be given the credit essentially the George Washington or the Father of CableLabs. So Dick and I were working on this and had lots of other people helping us. Jim Chiddix wrote a pretty thoughtful letter I think to the NCTA Engineering Committee along this period of time and it was just hard sledding. We were all so busy and so forth and so on but Dick kept his teeth in it. He would come into town, I don’t know 2 or 3 times a year and we would refine our proposal and haul it into John and try to get John signed up. The good news is of course with his technical background he had some sympathy with plus he realized that there were things like the AT&T lab model that worked well over the years. So finally in the 1987 timeframe, we were able to get enough of a charter put together with enough of the right kind of a theme behind it which is really gathering technology, evaluating technology, and transferring technology that Dr. Malone was willing to sign up and he kind of begrudgingly agreed to be the chairman if you will of the operation for fundraising purposes. So we actually incorporated, 1987, March of 1987 I believe and went out to try to raise money. We got some great fundraising folks. Loftus and some of those folks signed up. They went around and twisted arms hard and within about a year we had actually gotten enough people signed up on some conditions. Usually the condition was we’ll do it if everyone else does sort of a condition. That we became serious in an executive search to get the doors open and that’s what led us to getting Dick Green and his team to join us. The probably the best single decision we made along the line was that. Dick is very unique guy that has the ability to understand in depth technology but also is able to herd cats. Had got great political skills and great ability to get along with people and really understand what the right way to solve all these different pressure points are from the different leaders in the industry. So that was a lot of fun and having been pretty heavily involved in it, Malone had agreed to be at the point of time continued to be the chairman. He strongly suggested that maybe it would be a good idea if I would go up there and help get the doors open. So I took a 2 year sabbatical from TCI and joined CableLabs and basically I was saying well gee, if I’m going to do that, I can play all the positions on the field, I’m going to hire talent. So we got Dick. Broadcaster. We got Craig Tanner, who was kind of a broadcaster consumer electronics guy and he maybe had a double strike against him. We had Tom Gillette, who was a Telco guy. All of our chief people there were all essentially one way or another most of my peers considered enemies and caught a lot of hell for that but you know, I think history has shown it was the right thing to do. I could basically kind of tutor these folks in the early days so they didn’t stick their foot in their mouth too bad. I had a simple agreement with all of them which was no presentation; no speech was made by any of them until I reviewed. Just to make sure that they didn’t touch too many sensitive things. We had a vendor’s symposium here in town that I asked the CEOs of all of the major vendors. I think we got 80 people or something in and talked to them very directly in kind of a closed session about their concerns. Maybe of them were very adamantly opposed to CableLabs and were quite concerned about it and I feel like the way to deal with that is to deal with it, I’m one of those kind of guys, I like the problems on top of the table, and I think we were able to convince them that first of all we were going to do it and secondly there was a real role for them to play. I mean there was no way the Lab’s going to be successful without their participation. It actually worked out well. John was our keynote speaker of course but it turned out his plane had gone down back in New York and fortunately I think Glenn Jones, I’m not sure but was there that day and he was able to catch a ride back with Glenn but it was a couple of hours late. So we kind of changed the agenda around but John came straight from the airport over and he was in his bomber’s jacket and just really relaxed and informal. It couldn’t have happened better as it turned out. He’s terrific at pulling things together, explaining the future, weaving the story with all these disparate facts in such a way that it makes sense to people but it worked even better when it was just kind of us guys having an informal discussion. I mean that’s the way it came across. It was a magic day and I think turned the industry, the vendor industry from thinking you know we’ve got to figure a way to kill us to thinking okay…
PORTER: It’s going to be good for us.
ELLIOTT: Okay, these guys are going to do this anyway; maybe we ought to figure how to work with them. You have those magic days in your life sometimes and that was I think that was one of them. So we moved ahead. I did a lot of things at the Lab that I just wanted to do. Kind of my deal with John was “Well, if I’m going to go up there, you know I need a few bucks just to spend on things that I’ve always been interested in.” So we did a lot of projects. I actually put some real science behind what was going on with the corrosion with our fittings. It always has driven me nuts that the pipeline guys, shipping people – all those people understand this corrosion stuff right down to the nth degree and here it is, I believe in the field our number one problem and we still had to really put some science behind it. So we did that and did some good work there. We continued the work with Ferrugia [sp] that I thought was an interim step to expand and improve NTSC until we got to an all-digital scheme which I thought was the right approach as compared to making a half step to analog and digital scheme, which wouldn’t have held anyway and then making the step, let’s just improved what we got. And Yves was probably the single best guy in the world in that and so his line doubling techniques and stuff and we used those. We did the NTSC impairment studies which I really enjoyed. You know none of this you can do on a real P & L type environment but where I got the GI guys to build the best single test bed I think that has ever been built in the cable industry that duplicates all these nasty impairments that you find in the field and sure enough just use the nasty field. We used amps to generate noise with them. We built the echo machines and all the other phase noise stuff and put it together and I had my buddies, I called them miserable eyeball group come in and look at the stuff and they all got their own thing. You know, Wendell Bailey is more sensitive to this and Dan Pike’s that and Walt Ciciora is this and Archer Taylor is that and so forth and so on. And when they say that that is really what it is then that probably really is what it is. So we did some really good science there. You know I had Dr. [?] Jones come and Dr. [?] Jones and make sure that we were doing this properly from a sequencing perspective so that we met the CCIR requirements. It really was ram and the test weren’t biased and all that. We got the NTSC stuff that had not been done since the Tasso days in terms of being published. Now fortunately Archer had had some access to some tests that had been done along the way so he could informally show us that the slope here was in fact constant.
ELLIOTT: Through that entire period of time and people in fact their eyeballs were getting more sensitive to impairments at about 3D per decade and sure enough and they still are. Eventually they will get good enough that that won’t be the case but that was really important work. It helped the industry make some of these decisions. It helped us quite fighting this pressure we were getting from the cities to get our signal noise and our internode up because we could see no reason to fight with those, customers are going to insist on it anyway. So we did that and of course so with my theme of being really interested in digital television, we used the platform there at CableLabs just to drive that process. All be it, every single one the guys at Labs gave me the same quote that everyone else did which is not in our lifetime. They’ve all conveniently forgot that now of course. But it was a good platform. These guys were scientists. They were interested; they just didn’t think it was going to happen as quickly as I did. But I put together a consortium with CableLabs under the National Cooperative Research Act of Scientific Atlanta and Jerrold and CableLabs to investigate and promote and deploy NTSC light – standard definition television. We did that to stay out of the political ramifications of fiddling around in HDTV area. That would have been politically…
PORTER: You didn’t want to get into the Quad vs. ….
ELLIOTT: No that was okay. I didn’t mind taking that one on but I didn’t want to get into the work that ATSC at that point in time was doing.
ELLIOTT: Well, just politically they were very jealous of that space so we stayed out of that space. We went straight out in what was more practical for us anyway and we went after the space of that. I felt pretty strongly that this was going to work and I thought that we had to get our two principle vendors involved. Of course, with GI that was not too hard since they had largely done most of this work clear back in their VideoCipher days. VideoCipher 1 was largely and all digital scheme that was basically kind of a new scheme from a transmission perspective and so they had done a lot of work. The guys at Scientific Atlanta had begun to get interested in this largely from pressure from me and were working with the Utah State, Utah University people. Not Utah State but Utah University there in Salt Lake on this record quantification thing that you probably remember that they pushed for a while. So if I could get the three together and actually get them to sign and of course CableLabs I could do, then John agreed that he would essentially support this process and his theory was “Look Tom, this is impossible. You can’t get those two guys to ever agree on anything but if you do….” I finally got that done on one really cold night up in Aspen on a terrible situation with Bill Johnson and his team. He was the last one to come in. And that’s where really digital television started to make some progress even though still most people thought we were nuts. Subsequent to that, I guess about 3 months later, through some business dealings we had with AT&T and GI, I was able to twist their arm and get them to come into MPEG 2. And that actually made MPEG 2 real because minus those two guys intellectual property, MPEG 2 was not going to go anyplace and so Leonardo Chiariglione, I always say his last name wrong I think, but the gentleman that drove MPEG 2 was just ecstatic obviously when I was able to get those guys. Came over and visited us, outlined some of the things he was willing to do for us if we could get in fact these two guys with all this intellectual property under his auspices. At least get them come and participating in the process. So we were able to strike some deals and it was very interesting in how the process sorts out. Sometimes things just happen by good fortune. By then Telewest was operating in the UK so the next MPEG meeting was in --- the SLI called my buddies over there and said “Gee I’d like to have a hotel suite with you know Apples and IBMs and so forth set up for word processing purposes so anybody in the world could come in and use those but I really want is a couple of high speed copiers there” because in those kind of forums in those days, now you do it electronically but you had to…if you wanted to introduce something in a plenary, you had to copy everybody intended and typically there would be 300 different companies attending that. Well of course, you worked 24 hours a day in those kind of environments and you usually get that done about 1 or 2 o’clock in the morning and you had to have it copied and ready to go for the plenary. Well it turned out that I had the only copy machine. So I said well sure you can come use mine but here’s kind of how I want it to read. (Laughter). So it turned out you could literally take over the process with a copy machine, if you just did it right and I knew that having been in these things many, many times. So we put together the process and introduced the whole concept of profiles into the MPEG 2 and of course largely wrote the name main level name profile so that it worked for cable. The profile concept is still there today but that was the single biggest contribution that we made. Made sure of that this thing didn’t go off in a ditch someplace and wouldn’t work for cable. And of course they moved ahead and eventually endorsed the whole scheme as part of our digital lot at TCI.
PORTER: So that was two years at CableLabs.
PORTER: After two years your sabbatical was over?
PORTER: Did you come back to TCI?
ELLIOTT: Yes, of course things had moved on. I mean one timeframe when I was coming back to TCI, we were also consummating the merger with United Artists process which of course was United Artists, United and Daniels as a company at that time was the third biggest MSO out there on their own. So obviously that was a big step for the company and as we did that, I was asked to move back into the operation side of things with a little bit more, with a lot more things to do as well as continue to drive the digital part of the process. So I was happy to do that. I really like operations. So the engineering team, the technical operations team, the purchasing teams, the project management teams, the capital management team which I didn’t necessarily think made sense but anyway reported to me. I then started trying to see well how do you build a world class team to deal with this huge behemoth that we were now putting together to do what I thought was the right sort of things in that space and really enjoyed that. In that point of time I had transitioned enough I think in my personal growth over the years where I’m an extremely curious guy and the single most important word in the English language to me is “Why?” So I want to know why on everything and people use that essentially as leverage against me also. So I would be making all these great debates with principally by then younger folks and they would use that same thing to say “Well, you know Tom, you’re ideas are probably good but there are a lot of ways to do this stuff.” So I become a great believer by then of you don’t have to do it by yourself. It’s probably best if you can but you don’t have to. In fact what you need to do is find the best possible people and then find a way that works for you and works for them to support them. So I had some pretty simple management theories and a lot of them worked well for them. One of the theories I had for my guys in the later years certainly was you know it’s an inverted pyramid. My job was really to work for them almost all of the time. The occasional case for some reason they can’t agree or we got something, well then sure I need to step in, make the decision and move on and I’m not a bit bashful about that give environment I grew up in obviously. But most of the time it shouldn’t work like that. Most of the time it should be just like a family where you step into the house and you can’t tell who’d running what. This person takes care of that, this person takes care of this and you know, I believe strongly in an inverted pyramid thing and I have a real simple rule that I use to have people work for me which is kind of a ten by ten by ten rule, in other words for everything that you want me to make a decision on you have to bring ten things to me that you just want my advice on. And then I actually work for you as a senior adviser and I’ll give you my advice but you still make the decision and you’re still responsible for and for every ten of those things you want my advice on, I want you to be bringing ten things to me that are just simply information. And I do want to know what’s going on. I want to know what’s going on in everything. You never know, I might get a call from Magness or Malone or somebody and I better know what’s going on but I don’t want to be involved in that stuff. That’s what I’ve got you there for. I just want a heads up. It can be very fast. It doesn’t even have to have any commentary to it. In other words I don’t have to interact. The real advantage, one of the many advantages at working at TCI was there wasn’t a lot of things that we had to do the TCI way, so to speak. We had this very clear growth oriented entrepreneurial TCI way but each one of us as individuals was allowed to largely manage and operate our particular part of the pie the way we thought made sense. So that was lot of fun and the same time, clear back to the CableLab days, I had conned, coined the name HITS, the headend in the sky. So it became apparent we needed leverage to do that. One of the stories I don’t think we did tell was back in the mid-1980s when we put in place the National TCI addressable center and the huge success it became and that was a huge story in of itself. But playing on that theme, we were scale economic guys remember? We thought the way to introduce digital to the industry; no different than the way we thought we needed to introduce essentially addressability at least in our company was a national scheme. We didn’t see any other way to do. The encoders were 100s of thousands of dollars apiece at that point in time. So we started down the road to put HITS and that was also under my preview where we built the two facilities here in town. The one that’s over here on Colorado Blvd. and the one that’s out on Santa Fe there. That was a lot of fun. A tremendous amount of work there and like anything where you’re the pioneer, it doesn’t work quite the way you thought. I mean those pioneers didn’t you know die of thirst or starve to death as they were going across the country because they were stupid but it’s because they didn’t have a map. (Laughter) and I didn’t have a map. I knew where I wanted to go. I knew where I thought the industry had to go. I thought I understood pretty well the competitive aspects of it. As an example they enabled essentially satellite DBS. It enables to a degree the broadcasters to compete with them in some ways but I felt like it was going to happen plus or minus and the best way to do it was to lead it and consequently have some control over the process. So we worked on that. There were a lot of other things going on at the time that was a lot of fun. We did I think some unusual project management schemes that I think a lot of the other companies have now adopted. Our capital management process I think was second to none at that point in time and they had a guy, Bill Meyers that headed that up for me. We did some things like basically this waster of dropped cable. Stopped this nonsense of kind of adjusting your quarterlies by how many converters you capitalized versus expense. You know we got the companies numbers real I think. We were doing some pretty magic things but unfortunately the company got too heavily involved in some future stuff that didn’t pan out too well. Too much playing on gosh spending hundreds of millions of dollars with consultants figuring out how to redo the culture in the company which I don’t think was doable anyways to be honest with you. Push the telephone world a little too hard, etc. etc., etc. That caused the process to begin to look a little threadbare at the seams which of course is where Leo [Hindery] joined us to get the company in a position we could sell it and subsequently essentially did that. And that was really the time for me to look at something else. We had tried to sell the company – I don’t know how many of these stories have been told but a couple of times prior to that, AT&T and in this case we were successfully able to do that. It’s pretty clear that I don’t fit real well in a big bureaucratic organization.
PORTER: Me either. I understand the feeling.
ELLIOTT: Yeah, it’s just not my style. I think – we had a simple rule at TCI, if you talk about things 3 times, then go do it and vice versa I mean if – and nobody told you to do it. It was we discussed this thing 3 times, it’s time to do it and so if you ran into John or Bob or JC or some other guys later and you hadn’t done it, they’d say – I mean they didn’t actually say these words but the words were more or less “Do I have to tell you to do this?” I mean, you know we’ve talked about it, let’s get it done. Whereas of course in the whole world where you have to drive consensus on everything to the last nth degree, you know I would come back into one of those kind of environments after having done it and everybody would be mad because I did it and I would be equally upset with them because we had already talked about it a least 6 or 8 times and they hadn’t done it. I’m just out of sync with that particular management style. I’m not saying it’s right or wrong. I’m just saying it’s not…
PORTER: I understand where you’re….
ELLIOTT: It’s not where I want to spend my time.
PORTER: Let me ask you one question when you talk about projects. Looking back over the years, is there any one project that always bothered you? I know I’ve got one or two things in my life that…in business that I wish I would have done. Not to get rich. I mean that’s nice to get rich, but just because from a technological standpoint, it would have been the right thing to do. Either I didn’t get it completed or somebody else didn’t get it completed. Is there any one project?
ELLIOTT: Well, got several. (Laughter) One that frustrated me, when the VCR really started to take off, which you could just pick 1978 as the date for that, I was frustrated that the industry didn’t really started pushing essentially pay-per-view we thought of in those days, hard because I thought we could stop the video stores or at least the video stores would never have gotten the huge momentum that they got.
PORTER: The rental stores?
ELLIOTT: Yeah and see that’s our problem in this space, the video retail stores spend to Hollywood than we spend, send to Hollywood by a big factor by the way. Historically way more than a 10 to 1 factor. It’s about 10 to 1 right now. I mean that’s just crazy and I really feel that we could have done better at that. I think that PrimeStar, which started out as cable partners and evolved into PrimeStar, is a black eye for the industry in general. I think we created essentially a government structure that wouldn’t work. The super majority voting nonsense which we did so we felt like the other guy wouldn’t get ahead of us which was silly. We would have been better off to have anybody manage it. Time Warner, TCI, Comcast, anybody. Just blew it. Sure might not have done it our way but we should have done that one. And Express, which was TCI’s – was a joint venture in the early days between TCI and Clint Ober and that team but and I was involved in that on the side with Clint before we brought it into TCI but that one should have been essentially developed into AOL. We were way early. We had a great service. We had the problem that we didn’t, we couldn’t energize the industry. We go in at the system level and the guys said “Gee, I run a promo for HBO on the weekend and I’ll make more money than I will fiddling around with you guys for the next year.” And actually that was true but we were trying to push the concept of “Guys, this is coming. These PCs are not going to go away. They are going to continue to follow Moore’s Law. They are going to find themselves in all your customers’ homes. We need to be the people that world looks at that supplies that information. No differently than they look at us to supply essentially their entertainment.” We felt very strongly that the one of the things that’s extremely important to most parents is educating their children and this is a great vehicle to help the kids and today of course the kids don’t use encyclopedias, you know. So while we didn’t see the internet coming I don’t think quite like it developed. I don’t think anybody actually saw the search engine coming. I mean I’d been involved in our intranet way back in the early days of the internet. I watched the doubling of size every year that went on forever. One to twos not much. Two to fours not much but when you start talking about 4,000, 8,000, 8 to 16, that’s kind of where it was right then and it still was all pretty much in the academic community but it was making big progress. You know, so we thought that was really important. We had the UPI databases exclusive use for cable. We had powerful tools there. We just somehow were not able to convince the industry as a whole and ever really very effectively in TCI that this matters. That this is strategic. That this is positioning yourself for the next wave. So probably if I had to rate those, I suppose it’s kind of hard to rate. I guess maybe the Express one is my most frustrating. I think PrimeStar is almost as close to frustrating but we probably would have lost that at the government level anyway sooner or later I suppose. And of course the video store thing, I think we would’ve been so much better off if we had a little more leverage on the creative side by sending them more money than anyone else does. There’s lots of others but if you pick the big ones, those are probably the ones that…
PORTER: What do you see out in the future from a technological standpoint and otherwise?
ELLIOTT: Well, you know I’ve actually been a good futurist I think my whole career. I probably have caught more hell for being front almost my whole life actually even going back to being a youngster than I did for ever being behind too far. It’s safest in the pack and I’m one of those characters who spend my time, most of my life on the extremes of the bell curve. You know you find lots of people who are really good at the middle. That’s just the human nature and you find some people are really good at really down and dirty and nasty stuff where you’ve got to understand the atomic chart and really got to --- and you find a few people who are really good over here at this really futuristic, put it all together and make it happen. So I kind of peaked like this, where most people tend to peak in the middle and of course at TCI we had a great one-two punch because they had Dave Willis, who covers that middle better than any other man alive ever. I mean he is spectacular at that and so I could have fun working with Dave there because he took care of that so well and he had fun kind of listening to my nonsense on either extreme and moderating that to some extent. I think we were a spectacular team and I had a great deal of regard for Dave and I think he does for me and it was just fun. So I have some themes that I’ve developed over the years and these aren’t accidental. I mean I feel like if I go over here there are only 3 other guys playing. I can really get some leverage. I get in the middle, everybody’s playing. Millions are playing and I get over here and there’s only 3.
PORTER: That’s too safe for you, huh?
ELLIOTT: Spend your time on not – I’m a risk taker and I like this. I like controversy not for the sake of controversy but for the sake of getting some blood going, some thinking happening, some neurons firing up here and so I also then tried to develop some context to deal with these issues. Even on a personal basis. It’s become pretty clear to me that if you study technology over the history of man and I kind of have you know, four timeframes that I look at things. I was very fortunate in my life, my uncle who I was very close to, was a world renowned geologist. So he thought of things in terms of geological time. Two billion years and that gives you a very different perspective if you look and yours and mine interview today against that. It probably doesn’t matter much against that. Whereas if you look against the timeframe of man being around about 4 million years, that’s another timeframe and things look a certain way. If you look at things essentially a lifetime, which I would look at as kind of essentially my grandfather to my grandkids and look at that, things look different. If you look at things against a generation, essentially twenty years timeframe, things will once again look different. So I try to use all of these different ways to slide ides against and see, how to they kind of stick, where do they fit, what do they matter, how do they do that? If you look at technology on essentially the mankind timeframe, what you see is is that the actual formula is about the same. Mankind has been progressing at the about same kind of rate since the beginning of time but it’s the same old doubling rule again, exponential rule, not quite the doubling rule in this case but if you make a .001 to a .002 change, I mean you can’t hardly tell it. The slopes the same but what’s happened is during all during the history of man until about now, technology was always developed to keep the kind in charge. Really always developed for military purposes and it doesn’t matter if you go clear back to the bows and arrows days or what technology you pick, and the king always tried to keep it just for him. Nobody else could have it and so what we’re in now is a place where the curve is actually like any exponential curve is going asymptote. So we have an asymptote here that is the kind in charge asymptote but now we’re transitioning to an asymptote that the consumer’s in charge. This is a huge change for the human animal and it will take of course a few thousand years to get around and if I kind of said “Where do you think you are today?, I think were in the middle of that curve. In other words I think we’re the furthest away from being close to either asintope. Which you could also argue is the single most dangerous piece of time if the human animal makes it through this and we can write history say 15-20,000 years from now we’ll say “Well, this was really an extraordinary dangerous period of time. Right here when it turns out you and I happen to be alive.” Where people have to figure out how to deal with this stuff themselves. It used to be it didn’t matter if they wanted to figure out how to deal for themselves, they didn’t get to vote. (Laughter) The king made those decisions. Whoever the king was. The king in later years might have been a national government or whoever it might have been. Now of course we’re headed to a point where you actually see video game technology being uploaded into the military. You know. The typical kid at home has more exotic software in the stuff that he’s doing, largely gaming, than the airliners do. I mean because of course they go replace this thing at home every 6 months. While the airliners got to fly that thing to get his money back. I mean it’s just a big reversal and consequently we’re going to see all kinds of things happen in the world over the next few years that are just going to be striking and I would say that technology is now well ahead of application and I would actually pick just for the sake of picking it, 1969 was the day. And the reason is is that was the year we went to the moon and I don’t know how anybody can sit here and argue anymore that you can’t do it from a technology perspective. You could argue that you can’t because it cost too much, which is by the way the major argument when I get my buddies and hammer them back in the digital days. I said “Well you can’t tell me that I can’t do this.” So when you speak as a technologist and say I can’t do this, it really is misleading to the people. But I think you’re saying is that you don’t believe that it’s economically feasible and that actually would be true, but what they would say just not in our lifetime, it’s just not feasible. I would ask them to humor me and say they don’t think it was feasible from an economic perspective because that’s really where we disagree. I thought it was. I thought we were going to get below two microns in this timeframe. They didn’t and so today the arguments come down on that side of things. We as engineers can no longer say we can’t technologically do things and I just pick the moon launch as a date. You can pick whatever you wanted to.
PORTER: With the MSOs becoming less and less in number and bigger and bigger, do you foresee any problems in that area as far as local government concerned?
ELLIOTT: Well, I don’t know, Rex. One of the issues is that everybody has to deal with is you do need scaled economics to create change. You can usually incubate change outside of that environment. I mean if you look at electronics -- ham’s usually have incubated most of the change we have had in the history of electronics but they can’t drive it into place. You know, it’s just not enough scale economics. So somebody’s got to find whatever that is. General LeMay got to fly around the world with Art Collins or something and decide that this really makes sense and all of a sudden starts using, the costs come down and now all of a sudden Ham’s can buy their 6146’s cheaper or whatever. I mean that’s just the nature of the beast. So the cities that get it, no, they’re going to be in there negotiating for how do these big companies that have scale economics help if you will in their environment? By the way, I’m not overly optimistic that government gets it at any level. So I’m not a big fan of government but you know, there’s some really bright people that think that their call to be public servants and hopefully there will be some leadership that shows up here in the government environment at all levels that says “you know against the curve I’m talking about, that’s why I use these different scales. If we’re going to help mankind here, while we’ve now transitioned where the advice used to be from the grandfather to grandson almost perfect. You know keep your nose down, keep it clean, work hard, learn a trade and get better at the rest of your life. I mean not that many years ago, in the great cathedrals in Europe a person spent their entire life putting a terrazzo floor in that building, okay. They knew what they were going to do for their life. That’s not that many years ago. Three or 400 years ago. I mean today, a youngster has to think about how does he manage himself in terms of him or her, in terms of how do they think about continuing to get educated while they are also working. I mean they used in their mind think about education and work as two very separate things. There’s no way you can consider that today. You got to continue learning and you’ve got to continue training yourself in ways that are pretty fundamental. I mean remember the statistic up until about now is that people spend 2 hours thinking for the rest of their lives after they get out of their other academic part, their goals. I mean there’s no way. So the cities that are on point here and it’s not just the cities but the parents, everybody that’s on point here, should be thinking about “Gee, this is uncharted territory. This is an absolute difference in the history of man.” Change is collapsed well inside of one person’s lifetime to the point that it’s collapsed well inside just your career as part of one lifetime. Consequently how do I advise people that matter to me – my sons and daughters, my grandkids, anybody else that really matters to me? To think about how do they deal with these kinds of issues?
PORTER: Let me ask you something else then. You’ve a lot of change. You’ve seen…
ELLIOTT: I’ve created a lot of change.
PORTER: To transistor, to chip, to microwave, to satellite and basically a person in cable communications today would say well we’ve got digital television; we’re going from analog to digital or mixing them. So digital television is a big thing right now and we’ve got the internet, high speed internet – that’s a big thing right now and we’ve got cable telephony. That’s a big thing right now. So we’ve got three superior services that are really make the late 1990s and the early 2000s, what’s the next big thing that you see, Tom.
ELLIOTT: Well, the next big thing is that you won’t think of it that way. You know, from a technician’s perspective a bit is a bit and when you get into kind of the pipe world, you don’t really care what those bits are in there. You sort them out in the end and give them back to the people for application reasons but they are just bits. Now if you take a little poetic license with this, they are just information. Okay? So if you are transitioning now from the old world where the premiums was on strength. Not that many years ago, you and I got paid more based on our strength versus anything else. Generally speaking if we were stronger than our compatriots we got paid more. That’s the premium.
ELLIOTT: Today of course, your strength needs to be in intellectual capacity. That’s what you get paid and compensated for. That’s another huge change in the history of man. It’s just happening, you know, in the fairly recent future. If you watch the youngsters today and that’s really where you want to learn, is go watch people that aren’t conditioned. I happened to grow up in an environment where people my age largely grew up with television in most the country. I didn’t. There was not television in my home until after I rebuilt one. I bought it at auction down here and sent it home to my parents. Okay? But most people of my generation think of things against a television background because they always had television in major cities and that’s where everybody lived so certainly long since, youngsters have grown up with television. They don’t think about the world minus television. Youngsters today are growing up with PCs and essentially the internet and they just don’t think about things minus the internet. It’s just obvious to them -- it’s always been there…
PORTER: It’s always been there.
ELLIOTT: That’s the way they do things. So you watch what they do. They go into their home. They use call forwarding -- they’re not supposed to do it, the telephone company doesn’t like it,, but to take their buddies on the line, so I call this guy and this guy calls this guy and this guy calls this guy and pretty soon they’ve got 15 or 20 of them on the line all at the same time. In the meantime they are all sitting there with their PCs typically in a chat room with those same folks but also some people, right? And they’re all watching television. So the services you just, you know, they don’t’ see them as separate services. They just integrate them. Now they integrate them themselves admittedly but they don’t’ see it as watching television. They’re watching television while they’re talking on the phone while they’re using high speed. That’s just the way they do things. They multitask.
PORTER: Let me ask you about something else then. If you’ve seen fiber, we accept fiber.
PORTER: We’ve even seen lase applications and there have been people, of course we know can carry information over a laser beam. I mean we can modulate that.
ELLIOTT: Right, right. Sure.
PORTER: Other words you couldn’t have fiber anyhow but there are physicists who are talking about actually being able to bend the direction of a laser beam, you think there’s any application for the future of cable telecommunications where you might use that applications and take away the cable all together?
ELLIOTT: You know my personal view is that if you looked at generally what happens with these kinds of things, they become an overlay as compared to replacement. So you look at copper pair, it’s still out there.
PORTER: Or something additional like sort of wireless to wire.
ELLIOTT: Right, very rarely does existing infrastructure disappear. It actually gets augmented by a new infrastructure. So I don’t think there’s much question at all these different transmissions schemes are going to go into play. I’m not sure exactly what they’ll be used for. I mean at one point in time I spent quite a bit of time looking a meteor burst technology and I thought “Well, gee maybe that’s something we can use.” As you know, I can’t quite get those meteors reliably come by at the right point in time. But it was fun and I learned something I think. I’m still a fan of essentially the automated flying processes where you put basically a platform in space, not in space, about 70,000 feet up and you just use that as a low earth orbit satellite kind of a thing. I believe that technology is going to go places.
PORTER: Low orbit right?
ELLIOTT: Yeah, I mean the problem today is that we haven’t been able to get the cost down quite enough on you know the field to sustain those things but they’ve got it so you can typically keep that plane up about three days now and of course you know you need a fleet of 4 or 5 of them to make it work right and there is still a few weather problems and some other things. But the military’s been doing this forever, tethered balloon schemes, etc., etc. I think that’s going to happen. So you know, the reason that light is going to be dealt with is that you need to get into these processes where you have these really short wavelengths. Such that you can now manipulate them much more effectively than you can with these huge wavelengths that we do with the UHF and VHF level. So you know the whole concept of building essentially optical computers and optical switching and optical etc., etc. All of which is based like you say on someway of permulating the electric magnetic spectrum at the light region, no different than we’ve long since permulate the electric magnetic spectrum at the essentially RF reason. It’s the same really general techniques. The same techniques. Are going to happen. I’m convinced of that. Of course as you can begin to think about how you would build essentially circuitry to be able to manage that sort of stuff. It becomes apparent that you don’t mirrors, big old filters. You don’t need big old cavities and stuff to deal with things that have been done at those kind of wavelengths as compared to the things that you and I probably spent most our career doing. You know, what I see happening is as we turn this curve here, technology speeds up and it gets way out in front of our ability to apply it, then essentially the ideas are now the limiting factor not can you do it. You know the limiting factors. I think amazing things are going to happen here. It’s very hard for any of us to predict today. I think a better way may be to try to think about what’s likely to happen is – how do people what to live their lives, you know. How do you want to educate your youngsters? How do you want to interact on a day to day basis with – in an environment where knowledge is really your thing that you get compensated for? Optimizing knowledge, trading knowledge, building knowledge, you know, sorting knowledge, etc. etc. As compared to brute force going over to lift so many bricks into place or whatever. So the world really changes and my view is that the limiting factor on how these things go into place is really built on people’s ability to assimilate and so where you had – I think Toffler pointed out in Future Shock, 300 hundred years from the time the sewing machine was invented until it was in common use. So you had all kinds of time to make lots of mistakes and you didn’t have a problem with a generational issue. It was going to go into place so slowly that the generations were going to turn over anyway, so you weren’t going to have the old people saying “No, no we always did it the other way. Get the needle out.” That was just; it took care of itself because it happened so slow. Today, I think what happens is the limiting factor probably is people’s ability to assimilate what we’re talking about and change the social structure as such that it makes some sense. I mean if we just built this great big new government building or whatever it might be, schoolhouse or whatever and the next say “I guess that was a bad idea. What we ought to do is do it this way.” That doesn’t work too good, I don’t think. So I predict that you’re going to see a huge essentially I don’t want to call it a democratic because while I’m a big fan of democracy – democracy in of itself always turns into anarchy, what you really want is a republic form of government like what we have, a representative form of government. I think that there’s some big changes that have to happen here as they get essentially our social structure lined up so that we can allow youngsters as an example to say “Okay, the way that my life is going to look is…” and the point is they won’t look at education and essentially vocation as two separate things. Be one and the same. They won’t look at the way they do their essentially their leisure time and that sort of stuff and I’m not talking about probably the non-physical part, in other words skiing and that sort of stuff.
PORTER: I understand it’s quality versus…
ELLIOTT: Well, it’s using tools.
PORTER: We’ve got to bring this to a close. It’s been quite an experience listening to you and learning about Tom. The only thing I hate is that you haven’t given me any great ideas toward making money in the future.
ELLIOTT: We’ll talk about those offline.