Interview Date: June 14, 1990
Interviewer: E. Stratford Smith
Frank Cooper describes his first impressions of the cable industry, and his position in franchising at Jerrold as well as learning all aspects of the business. He discusses his move to Malarkey-Taylor, selling small systems to Alan Gerry, and talks about early experiments in pay TV. He points out the perception of cable as a small town phenomenon, and details the creation and operation of Gridtronics by Alfred Stern. He recalls how Stern, through TVC, convinced operators to carry pay programming soon after HBO had launched their service. He describes how he created a pool of 500,000 subscribers, the effect of Warner’s takeover of TVC, and HBO going to satellite distribution. Cooper recounts the story of a presentation to studio executives of movie programming, the creation of a “diversity service,” and negotiations with studios. Next, he tells anecdotes about Milt Shapp, his experience as an operator of small systems, his involvement in starting a successful system in Warsaw, Poland, as well as his interest in other international opportunities. He concludes by reflecting on the opposition of CTIC to the industry, the franchising challenges in Philadelphia, and his own pride in bringing feature films to American homes.
E. Stratford SMITH: This is Tape 1, Side A, of an oral history interview with Mr. Frank Cooper, a cable television pioneer whose career has spanned almost the entire history of CATV, or cable television, in a variety of capacities. This oral history is one of a series of interviews with pioneers and current leaders in the cable television industry being conducted by the National Cable Television Center and Museum at The Pennsylvania State University. We are in the Oral Histories Reading Room at the Center. It is June 14, 1990. The interviewer is E. Stratford Smith, Director of the Oral Histories Program and professor of cable communications.
Frank, we have known each other too long not to do this interview on a first name basis.
It is our practice to develop somewhat detailed background information on those we interview. Let’s start at the beginning. When and where were you born?
FRANK COOPER: I was born in Philadelphia in 1921. My mother was a native of Philadelphia. My father was born in Russia. I went all through the school system in Philadelphia. I went to the same elementary school, as a matter of fact, as my mother did. Then I went to West Philadelphia High School and after graduating from West Philly High, I went to Temple University. These are all Philadelphia institutions so I got into the cable television business many years later by virtue of my interest in Philadelphia and Philadelphia politics. Curiously enough–if I’m beginning to ramble here, don’t hesitate to stop me.
SMITH: No, I’m going to want that information, but I thought maybe we would follow up with your parental background a little bit first.
COOPER: Their background?
SMITH: What was your father’s occupation? You said he was born in Russia.
COOPER: That’s right. He came over to the United States as a young boy. He was a jeweler on Philadelphia’s famous Sansom Street. That’s where all the jewelers are, it’s called Jewelers’ Row. Hundreds of them. He was one of many Russian immigrants who opened a little store on Sansom Street and manufactured jewelry, made rings, pendants, things like that. My mother, whose family had also come from Russia, was one of five children. And even though my grandfather was an immigrant who came over here absolutely penniless and got his first job as a huckster, he managed to send every one of his children to college. We recently had a reunion and there is hardly anybody in that family, and there were over a hundred of us at the reunion, who did not have a college education. It’s sort of an interesting American story, at least to us.
SMITH: It’s remarkable. Did your father know your mother before he came over here?
COOPER: No, he was quite a few years older than my mother. He did not know her, but he met her socially somewhere in Philadelphia, in the West Philadelphia community where we lived. That’s where I grew up. It has always been a source of amusement to me that I had actually gone to the same school as my mother had; in fact, I had some of the same teachers, many years later.
SMITH: That is interesting.
COOPER: That’s not so unusual in rural or small towns, but in a big city like Philadelphia that was an unusual story. After I graduated from Temple University, I was at the teacher’s college there, but I got my first job in a textile plant. I became assistant to the president and then an executive vice-president; and I guess if I ever got solid business experience I got it there. Later, I took a job with an advertising agency because what I found most interesting about the textile business was the marketing. While I was in the agency, I got a call from a friend who asked if I wanted to do some specialized advertising and promotion for a political campaign.
A gentleman by the name of John Kennedy was running for president and the Kennedy people were creating all sorts of campaign centers in cities all across the country. The Kennedys were very, very aggressive and they weren’t waiting for the party to catch up. Among other things, they created a “Citizens for Kennedy” movement, which was kind of a parallel campaign staff to that of the Democratic organization. In Philadelphia the man in charge was Milton J. Shapp. That’s where I met Milton for the first time.
SMITH: Milton J. Shapp, the founder and president of Jerrold Electronics Corporation.
COOPER: Exactly. Milton and I were on the campaign trail several times together. Milton took an interest in me. When the Kennedy campaign had concluded I took a job with the City Democratic Committee and subsequently the State of Pennsylvania Democratic Committee for the next four or five years. By this time I was in my mid to late ’30s, I was actively involved in Democratic campaigns and in fact was state campaign manager during one of the primaries for a very well known jurist, Michael J. Musmano. He hoped to win the Pennsylvania Senate seat. He was well known in Pennsylvania, because as a young lawyer he represented Sacco and Venzetti in a very famous civil rights case having to do with whether or not those two Italian immigrants had been “railroaded” or whether they were guilty of the terrorism events of which they were charged.
Musmano, being an Italian, was very, very anxious to get involved. He did become their counsel. Subsequently, he wrote many books and articles about the case. He was well known in the state, but he, unfortunately, lost the primary.
SMITH: That was a civil anarchy case based on union activities, was it not?
COOPER: I’m not an expert on that case. I only know its reputation.
SMITH: Frank, you were talking about organizing a political campaign for the judge and I think this was about to lead up to your introduction to the cable television industry through some of the people in the industry.
COOPER: Well, yes. Two stories. First during this period, as luck would have it, I heard of cable TV, I guess, for the first time through Milton Shapp. Also a relative of my then wife was in the business, a man by the name of Fred Lieberman. Mr. Liebermann had also been born and raised in Philadelphia. He had left the city and had taken a job out on the west coast and the family lost track of him. When he turned up again, I remember meeting him and asking him what he was doing and he said he had taken a job with a firm called Jerrold in Philadelphia. A firm up to that point I had never heard of.
“What do they do, Fred?” He said, “Well they bring television to people by putting up a tower and antenna and bringing the wire down city streets into individual homes.” “Well, what holds up the wire?” I asked. He said, “We put the wire on telephone poles. That’s what holds up the wire.” I said, “You know, Fred, you better go out and get yourself a real job. How long do you think that thing’s going to last.”
That was my attitude and that was the public’s perception of cable TV at that time. It sounded, at best, like a flimsy industry. A business that would be dependent upon borrowing poles from a telephone company didn’t seem like a very sensible way to get television pictures, to me.
Later, when I got to know Milton Shapp, Milton made me a real devotee of the industry and got me very interested in the business because his attitude was positively contagious. At some point in 1964, he was putting together a campaign team because he thought he would like to run for public office. For one reason or another, his political office opened and closed, mostly because at that point, Milton was an absolute political unknown. When he took polls to determine his public identification, the results were generally very, very poor.
I had worked with him off and on, in building a campaign leading to his governor’s race. During one of the down-turns I referred to he said, “I’m going to shut the office for a while. I don’t know whether I’ll really make a run for it.” He offered to get jobs for his staff, and he got me a job at the Jerrold Corporation. He recommended me to the then General Manager, Bob Beisswenger, saying that Frank COOPER had a certain amount of political experience, that he was not uncomfortable with the political arena, and would be a good CATV franchise man.
Jerrold not only manufactured CATV components, but also had a systems operating division; and did indeed need a specialized franchise man. I became that guy.
At first, the Jerrold people weren’t especially enamored of me, nor I of them, because we had come from different disciplines. I was a “politician” and they were “cable guys/businessmen, etc.”
It turned out that over the course of the time that I was at Jerrold, I proved fairly effective at bringing in those franchises. I didn’t find it all that hard to do. (Incidentally it really wasn’t all that hard to do.) If you came into city hall and made an intelligent case to the city manager or to the mayor, the local pols didn’t have any particular objection to CATV. Franchises weren’t all that hard to get in those days.
SMITH: What was the time span?
COOPER: When did that occur?
COOPER: I started at Jerrold in 1964 and I stayed with Jerrold until 1968. By September ’68, I was at Malarkey‑Taylor Associates. I had decided to leave Jerrold. Milton Shapp was now completely out and Monty Shapiro of General Instruments had come in. Although Mr. Shapiro, over the years, subsequently became quite friendly, I found the new environment of a big public company like General Instruments inimical. I knew some of the people at Malarkey‑Taylor Associates, such as Jerry Looby and Martin Smith. We were talking at one of the cable regional shows and they introduced me to Martin Malarkey and he thought that I ought to come down to Washington and I did.
SMITH: Before we get too far into that, then your sole area of activity when you were with the Jerrold Corporation was in franchising. Is that correct?
COOPER: That’s not quite correct, because you may recall Elmer Metz. He was division manager and my immediate superior. Elmer, although very eccentric with an exotic personal manner, he was very well versed in the cable industry. He really understood it. If I learned anything about the cable TV business I did, in fact, learn it from Elmer.
He had very little tolerance for specialists. Elmer really insisted that the staff learn every phase of the business. Although I don’t have much of a technical background I had to learn how a cable system worked. I had to learn a certain amount of theory. I had to learn system operations. I had to learn cable finance, how to read the financial projections. Elmer insisted that we know the business. During Elmer’s term of management, it was sink or swim, because if you didn’t make it with Elmer you got fired.
So I learned the business.
SMITH: What was Elmer’s title at the time?
COOPER: When I worked for him, he was the manager of the Jerrold C.O.D. (Community Operations Division). So, I was at Jerrold until General Instrument took it over, and then left for Washington with great expectations. No sooner had I arrived at Malarkey‑Taylor Associates before the FCC issued its famous Microwave “freeze” and refused to allow cable systems to import distant signals. I’m sure that you can elaborate on the legalistics of the freeze far better than I can, but it created a terrible depression in the industry.
I had been taken on at Malarkey‑Taylor Associates to head up a newly opened brokerage division. I knew enough about the business to represent to buyers and sellers how to acquire or divest cable TV systems. But now, with the freeze it was very tough. Business was literally drying up. Shivers and tremors went through the industry at that time. Martin Malarkey, who headed-up the firm practically said to the staff that if you see a better opportunity, don’t hesitate to take it.
Lo and behold, as luck would have it, this very freeze was creating a most interesting opportunity for me. There was an opening at an operating company headquartered in New York City. This was TVC in New York, headed by Alfred Stern, and his chief operations officer, Gordon Fuqua.
SMITH: Before you go into that, Frank, let me just ask you, during the Malarkey‑Taylor period, which was apparently relatively brief, did you actually handle any system brokerage?
COOPER: Yes, I sold one small package of systems to a friend of many years in the industry. An appliance dealer by the name of Alan Gerry. Mr. Gerry was someone I had known since my earliest day in the industry.
SMITH: Did you start Mr. Gerry in the cable business? Were those his first systems?
COOPER: He was already operating a few small systems and we got friendly. We used to exchange, as we still do to this day, visits at each other’s homes and we always talk cable. I certainly would say that in exchanging information I encouraged Alan to go after more franchises. He was concentrating on his appliance store at that time which was typical. Robert Tarlton, who practically with Milton Shapp, invented this business was also an appliance dealer. Gerry had been selling TV sets and radios since about 1951. He lived in the Catskills where signal was a problem. That’s how he got into the cable television business, making certain that the people that bought his TV sets would get a picture. I encouraged him to go out and get more franchises. I used to tell him, “Don’t worry so much about the banjo business, go out and get the cable TV franchises!”
If I can, just for a moment, go aside, Mr. Gerry in those days was not the nation’s fourteenth largest MSO. In those days he was a very small independent. I met him at a cable convention where I was active on the floor. This particular convention, was I think the 1966 NCTA convention.
SMITH: This is while you were still with Jerrold.
COOPER: I was still with Jerrold, yes. One year at the convention I met him on the floor and asked him had he voted for the NCTA president yet because I was heading Jerrold’s campaign to elect Bob Beisswenger. Gerry said he hadn’t voted and wasn’t paying much attention to the election and didn’t think he would vote. I said, “I need your vote very badly. Go get your ballot from the NCTA and try to have it up here in less than ten minutes. The vote is about to begin and I need every last vote.”
About nine minutes later I was looking around the room, buttonholing people for ballots and I see Gerry’s right there, but he hasn’t handed me his ballot. I walked over and said, “Did you get me the ballot?”
He said, “They wouldn’t give it to me.”
“Why wouldn’t they give it to you?”
“I didn’t pay my dues.”
“Well, go back. Pay your dues and bring me the ballot.”
He said, “Well, not today.” And that tells you all about Mr. Gerry’s financial situation in the late 1960s.
SMITH: As you say, now he’s probably the fourteenth largest operator in the country.
COOPER: And probably the largest independent. He’s bigger than Rigas. Rigas is one of the largest independents.
SMITH: With assets so large we shouldn’t even speculate about it.
COOPER: I would hate to do it.
SMITH: It’s a neat story because it shows some of the rags to riches careers that characterize the cable television industry. Frank, go on. You had advanced from Malarkey‑Taylor‑‑perhaps advanced is not the right word. You had moved from Malarkey‑Taylor to this organization in New York headed by Al Stern. Do you want to pick up with your story there?
COOPER: I was attending a regional convention for Malarkey‑Taylor in the early months of 1969. I met Gordon Fuqua at a reception and he asked, “Would you be interested in discussing some things in New York with Alfred Stern and myself? We’re working on a project that may be of interest.”
I knew the situation at Malarkey-Taylor wasn’t looking too good, so I went to New York and met with Fuqua and Stern. I had dinner with them and they were very candid in revealing that if the cable operators such as themselves didn’t develop new streams of revenue, if they didn’t start doing innovative things, if they didn’t start expanding their base, there was going to be no future. The Commission was just crippling the industry.
SMITH: By the Commission you mean?
COOPER: The FCC. TVC was already beginning to feel the pinch. TVC had started a large system, one of the largest urban systems in the United States in Akron, Ohio.
SMITH: What do the initials TVC stand for?
COOPER: It was Television Communications Corporation.
They had started major construction in Akron, Ohio. I think at that time there was not a larger urban system anywhere. That’s my memory of it. Millions of dollars were going into this system. TVC was becoming very alarmed at the thrust of the rules and their diminishing ability to attract investment.
You might say, “Shouldn’t they have had their investment in place already in Akron?”
Well, a lot of it was in place, but there were vast technical problems in Akron. There had been a big changeover in the amplifier industry relating to increased signal capacity, so cost overruns were staring TVC in the face.
Gordon Fuqua was a kind of a universalist in his attitude towards cable. In other words, he thought in terms of the Industry. He didn’t feel that Akron, in and of itself, would break the company, but he thought that it wouldn’t be good for the industry if the Akron problem and the FCC problems curtailed operations, thereby throwing the industry into a significant downturn. He thought the industry had a future. He believed in things like local origination; multi‑purpose usage of the cable system, e.g. surveillance systems which at that time seemed to make sense. He had even talked Alfred Stern into creating a division known as Televigil which was a security-surveillance idea.
He had another idea which was positive blasphemy. He said, “Alfred and I believe that the way to save this industry is to bring in the money you need to solve technical problems such as we’re having in Akron, by going into a situation where‑‑follow this now‑‑we open up three or four new channels exclusively for cable TV. For example, a medical channel for doctors offices, and an instructional channel, and among those channels, he said, we’ll have a movie channel.”
We all sat quietly there for a moment. I asked, “A movie channel? What do you mean by a movie channel?” He said, “We’ll get new movies and we’ll pipe them from the headend into the subscriber’s home and charge the subscriber for it.”
I said, “That’s pay TV.”
Now, in 1990, the words pay TV aren’t unusual, but pay TV in 1969??
The movie people and the broadcasters had been hammering away in print and media for years that one of the things that might happen with cable was that operators were going to introduce the idea of pay TV…”charging people for what they once got free.” Of course, cable already was charging people for what they “could get free,” but now here was an additional charge coming…for the movies. This was really “worse” than pay TV. This was subscription television–which had already been tried in a couple of referendums. This had been the subject of all sorts of media opposition for years, and the public was trained to believe that pay TV was kind of a dirty word (or at least a dirty phrase).
SMITH: When you say it had been tried in a couple of referendums, Frank, specifically what are you alluding to?
COOPER: Well, I’m alluding to the fact that subscription TV was on a referendum in California under the leadership of Sylvester Weaver. He had formerly been president of NBC. It bombed. (Incidentally that’s Sigourney Weaver’s father. You knew that.)
SMITH: No, I didn’t know that.
COOPER: Weaver lost a fortune in this concept as did all of his investors and it lost because the public just wouldn’t accept the idea of pay TV. The newspapers and the broadcasters, all the media, said that Weaver was trying to charge people for television. Although the cable guys in effect had been charging for television since the ’50s, the public attitude towards cable TV was “small town.” Cable was something that happened in the backwoods so it didn’t concern New York, Philadelphia, Washington, Chicago, Los Angeles. The majority of people didn’t pay all that much attention to it. But when Weaver threatened to bring pay TV to the big cities, that bothered people. The connotation of pay TV resonated poorly.
(The interview was interrupted briefly.)
SMITH: Frank, while we were off the record for a moment, I had inquired whether you had been with the Jerrold corporation at the time of the Bartlesville pay TV experiment and you said no, but you had mentioned another one in Canada that you had done some research on. Could you tell us about that one?
COOPER: Yes, let me take you back to 1969. When I went up to meet Fuqua and Stern to discuss their idea they introduced it to me by saying we’re going to create a medical channel, an educational channel, a cultural channel and a movie channel. We’re going to introduce a CATV diversity concept. Being fairly ring wise I knew where the money was and I knew what cable needed was money. The money was going to come, not from their medical channel, and not from cultural channels. It was going to plainly come from the movies, pay TV.
I thought to myself, on the one hand down in Washington, Malarkey‑Taylor is practically inviting the staff to look for jobs, and on the other hand, these guys are offering me a job in pay TV. Why pay TV is almost as popular in the United States right now as murder. I’m between a rock and a hard place here. I didn’t want to turn down a new job, but people don’t like pay TV.
Mr. Fuqua and Mr. Stern were very persuasive. They convinced me that pay TV was a practicality. They convinced me that their concept was sound because it had tremendous ramifications, cultural as well as financial…and that I ought to have a shot at it…so I came to New York and my first job was to seriously research pay TV. As a result I found out to my own astonishment that there had been start-ups in pay TV. One in Bartlesville, Oklahoma and another in Etobicoke, Canada.
In Bartlesville a local cable entrepreneur who I believe also owned or had an investment in a movie theater obtained the rights from his distributor to run film from his theater to his headend which in turn passed the movie into subscriber homes. He was able to do this for four or five days. The picture that he opened with I discovered, was “Pajama Game.”
SMITH: Now you’re talking about what?
COOPER: “The Bartlesville experiment.” I’m talking about a period long before I met with Stern and Fuqua. I’m talking about somewhere in the late 1950s. Unfortunately, the Hollywood distributors shut him off real, real fast.
SMITH: Actually, Frank, he built an entire system solely for the pay TV experiment. It wasn’t his cable system. No, he built the entire system for the specific purpose of the pay TV experiment, and I think that he had one or two years that he was allowed to test it under this contract and then they shut him down.
COOPER: Well, it’s a long since I did the research, more than twenty years ago. I certainly won’t dispute the kind of system that he ran it on, but my memory is that he wasn’t on long because Hollywood shut him off very fast. You’re saying two years. My hunch is he didn’t go that long.
SMITH: Well, Henry Griffing, who was the man we are talking about, owned a chain of theaters throughout the southwest, Video Independent Theaters. He was a client of mine which is the reason I’m interposing. I thought it might refresh your recollection. He got several motion picture producers to make pictures available to him for at least a year, but he built a complete system from ground up for this one purpose.
COOPER: Well let me reverse field and ask one question. Am I right that it was the late ’50s?
SMITH: Yes, you’re right on the time. I interrupted you because I thought you might be confusing it with the Canadian operation that you were about to talk about.
COOPER: The Canadian operation did not work out of a movie theater. My memory of Etobicoke is that it operated over the air, and it was in Cooperation with the Zenith Corporation.
SMITH: It could have been.
COOPER: I do know that it failed, but why it failed I don’t know. Zenith, I think, subsequently moved the experiment into a relatively small town in Connecticut. There were, in fact three experiments: Bartlesville, Etobicoke, and one in Connecticut. But none of them worked. What worked was what Mr. Fuqua and Mr. Stern and I put together…that worked and that changed the history of American entertainment. We called it the Gridtronics Plan.
SMITH: Your Gridtronics. Let’s go back to that. I did interrupt you and I should have let you continue.
COOPER: Essentially, when they presented the idea to me they were going to try to convince the industry to adopt pay TV which eventually was called pay cable, I was very apprehensive. I knew that because of the experiments and the failed referendum in California, that the public perception of pay TV was very unfavorable. It had a positively murderous image. For example, you could picture somebody putting a gun at your back and making you pay for something that you thought was free. This was what had been “sold” to the public by the broadcast industry, and by the motion picture exhibitors, and by a certain amount of print media that never did like cable television.
As I pointed out, although cable and pay cable were of course, closely related, cable TV had been tolerated because it was “small town.” It had not yet reached the big cities. What brought cable to the big cities was, in my opinion, two developments: first‑‑pay cable, and second–the use of satellite to distribute the pay cable pictures.
When I agreed to take the job with Fuqua and Stern for TVC, (Television Communications Corporation) we developed a modus operandi that consisted of calling on the cable operators in person, any system operator, MSO or independent provided he had at least five thousand to six thousand subscribers. Our idea was to get operators to form a cable pool by signing up for our so‑called plan, we called it the Gridtronics Plan, or Gridtronics Diversity Concept. At the same time, Mr. Stern and I, would call on the motion picture producers: MGM, United Artists, Paramount Pictures, Warner Brothers and so forth. We would call on them and say, “Look, we’ve got a half million people that will watch your films every day if you’ll provide them for a separate channel on the cable.”
Well, this was very revolutionary. When we called on the operators a lot of them asked a simple question, “How can I deliver another picture? I’ve got ten or eleven channels and that’s as many as I can really expediently utilize. Other channels that would appear to be available aren’t, due to various co‑channel and adjacent channel reasons, so that I don’t have any space to deliver another picture.”
The whole darn thing didn’t make much sense to many of these operators.
SMITH: Frank, I am going to have to interrupt you again. The red light is flashing to tell us we have to turn the tape over.
End of Tape 1, Side A
SMITH: This is Tape 1, Side B of the oral history interview with Frank Cooper. The date is June 14, 1990. The interview is taking place in the oral histories room at the National Cable Television Center and Museum at Penn State. Frank, you were telling us about some operator reactions to the Gridtronics proposal, and specifically, the question of whether they would have a channel space available to carry the Gridtronics signal. Would you continue?
COOPER: Well, we had a separate engineering department for this problem. It was headed up by an engineer named Austin “Shorty” Coryell. His job was to perfect a headend adapter that would make it possible for the average cable operator to utilize his midband‑‑his unused midband frequencies–so as to distribute our special signal. Then to be compatible with what occurred at the headend, he devised a special converter that would deliver that signal to the subscriber’s receiver in such a way that the subscriber, with a simple click of his TV dial, was able to tune in a new picture, provided he had paid for this additional service. Now even though we were meeting resistance in the early stages of the game, we were beginning to talk to movie people, “opening the door” to this idea through certain people in the movie industry that Alfred Stern knew. Now, I’m going to do an aside and discuss how Alfred Stern came up with the Gridtronics idea; that is, the background he had, that I am aware of, that created the whole concept for TVC.
SMITH: Please do.
COOPER: Alfred had worked at NBC and he was an executive in the film department. As you know, the networks always used movies. They needed someone experienced in film buying. Alfred had developed relationships with the studios and became a significant cog in the film acquisition wheel at NBC. As a matter of fact, if I’m not mistaken, Alfred knew David Sarnoff personally and that’s how he wound up working at NBC.
When he left NBC and began his own business, mainly the Television Communications Corporation, (TVC) he hadn’t forgotten the skills he had honed there. With his knowledge of the film industry he thought he could use his buying skills to obtain films for the cable industry.
The cable TV people did not come from the entertainment business. The backbone of the cable business in the early ’50s and throughout most of the ’60s, were people who related to television sets; i.e., appliance dealers, repair people.
As a case in point, John Walson, a leading independent, who frequently claims that he built the first commercial system, used to sell refrigerators and connected TV sets to a cable that he put up in his spare time.
So along comes Alfred Stern to present this idea: “Hello, cable operator, I’m a fellow operator. I have an idea that will bring us additional revenue. I’ve got a guy on my staff who is going to travel around and meet with you and other operators. He’s going to form this great big subscriber pool and when we have a pool of a half million subscribers, we’re going to sit down with the movie guys and say, “Give us enough films so that a half million homes will pay nine or ten bucks a month–and we’ll split the take.”
When Stern and Fuqua brought me on in March of 1969, they knew that less than a few months away was the National Cable Convention in San Francisco. Heading to that show were all of the industry’s movers and shakers. TVC wanted to do a major presentation that would convince the decision makers that pay TV was the next wave.
All of TVC’s immediate effort was now directed towards doing an impactful presentation (and a very costly one) at the NCTA show in San Francisco. I remember that my budget of $50,000 which in 1990 doesn’t sound like all that much money, but it was a huge sum for a “one night stand” at that time.
With $50,000 we put on a whale of a show. It was a multi‑media event. We hired people who were specialists in industrial presentations using nineteen or twenty projectors going off at once. It was a dazzling performance. We even convinced the major movie studios to lend us trailers so that we could show the cable operators the kinds of films we would be using. We carefully crafted a script for this kick‑off of pay cable presentation. We assembled a mailing list of every significant cable operator. We produced a gala evening and we packed the house. At the Fairmount, there wasn’t an empty seat. Everybody who was anybody in the cable business was there, including the FCC commissioners.
Strat, do you remember, when was Alfred Stern the NCTA chairman?
SMITH: Stern was the national chairman in 1966‑1967. If that helps.
COOPER: It does help because it accounts for the fact that we were able to get such a tremendous turnout– because Alfred was not just some guy with a “hustler’s” idea. Alfred was a man taken seriously by the industry. They had elected him their chairman. He had very good pedigree and he was quite a magnet when it came to attracting people to this event. We broke the idea of pay cable as a reality at that show.
Following the show, our technique was to be sure that the operators “signed on the dotted line.” We had prepared a form that invited them to participate in the Gridtronics plan. It was our intention to take those forms to the various movie studios.
Peppering my diary for 1969 there are notes about our many meetings with the various heads of the studios. We met with Lou Wasserman of MCA, we met Irwin Ezzies at UA; we met Silverman of Paramount. In fact, we met every leading executive in the movie industry. We tried to convince them that the time had come to release movies to the cable industry in return for a stream of revenue that we would share and at the same time would expand our mutual audiences.
SMITH: How successful were you with these people?
COOPER: Well, I may be foreshortening the story, but I’ll tell you how successful we were. Today, I gave Pamela Czapla, at the Cable Museum a commemorative clock that Alfred Stern presented to me on the date that Gridtronics actually inaugurated new motion pictures from the cable headend into the subscribers’ homes. It took four full years, until February 1973.
SMITH: This was after you had been successful in getting the programming available.
SMITH: How did you deliver the programming to the individual systems that were participating?
COOPER: It was a tremendous work-out, a gnashing of teeth to secure the film; and still keep the operators in line. Even at that we were scooped. In other words we were not the first to activate a pay cable signal, although we in fact, were the first to do a multi‑system pay cable performance. We activated ten systems on the day that Alfred Stern gave me that clock…but I’m getting ahead of myself.
Curiously enough, prior to our activation, by three full months, Home Box Office, a division of Time‑Life, scooped us. Somewhere in the middle of the four year span, Jerry Levin head of Home Box Office came to see me and told me very frankly that Home Box Office was tracking the Gridtronics experiment. HBO was watching our progress, was aware of the fact that we were beginning to make inroads, and now HBO wanted the same rights to the films. They were going into competition with us and they did not expect us to sign the kinds of contracts with the producers that would prevent them from getting the same films. The overtones were that HBO would treat “exclusives” as restraint of trade. Here we had broken the back of the problem by ourselves through hard work; but by activating first, HBO got the credit. Even though I reached my goal of a 500,000 Gridtronics “pool,” our efforts at reaching agreement with the studios just wouldn’t jell until in 1972. A firm by the name of Warner Brothers came along and decided they wanted to get into the cable business. Warner bought out TVC.
That is when the floodgates opened. It became obvious when Warner bought out TVC, it had, in effect, become a cable operator and would in fact, provide film for “pay” purposes. That was indeed something to motivate the other movie studios. The majors then fell into line. They decided they better share the pie rather than allow Warner to get this tremendous hold on the cable industry all by themselves. They weren’t about to let that happen.
In 1969, right after the NCTA convention, Alfred Stern asked me how long did I think it would take me to create the pool of 500,000 subscribers. This sounded like a big number then. I had been out in the field, I saw that we had “sold” some of the operators at the convention. They were beginning to think that pay cable was a possibility, and I was becoming optimistic. I told Alfred, by December 31, 1969, I’ll have a half million homes in the pool. On the day before Thanksgiving, because I remember Thanksgiving dinner in 1969, I had signed up 500,000 homes. I have my notes right here in my diary and I got them in an interesting way.
I had to get operator’s signature on a form of some kind. The form had to look contractual, “engraved in stone”. The movie guys had to be convinced. Their question would be, “Who is this operator? Did he sign on for our product? Will he live up to the agreement? Will he really use the product and promote it? Will he pay his bills? Is he honest?”
I became a missionary. I hired a small plane. I crisscrossed the country, stopping wherever there was a cable system. I had a TV Fact Book marked up so that I could stop in every city. I called on every operator who I thought could be brought into the fold. Getting a 500,000 subscriber “pool” doesn’t sound like a lot today, but 500,000 subscribers in 1969 was a very big number.
SMITH: Can you remember, Frank, or estimate at least, the number of stops you made in that plane? The number of cable systems that you talked to in building up that 500,000?
COOPER: How many different stops?
SMITH: We won’t count the ones where you just went down for fuel.
COOPER: Well, I didn’t take the plane cross country. I would go cross country commercially and then hire planes on each coast. I would go north‑south in a small plane. I would crisscross with commercial flights and where I could find a suitable system in between I changed planes. I would estimate somewhere between fifty and one hundred stops. I would periodically come back to my office and publish a monthly journal on the Gridtronics plan. The “journal” was really a friendly, folksy letter with a little graph and it said, “Operators you remember last month we had 16,000 potential subscribers? Would you believe that Monty Rifkin (for example) has signed up now and we have 43,000 subscribers in the plan? Every month I would draw a new bar graph.
Some of my memories of the campaign, people who were helpful, and people who weren’t, amused me still. Alan Gerry who wasn’t able to help me with the ballots in the early ’60s because he said, “Not today”, signed up early for the Gridtronics plan. He was very helpful.
I remember another operator on the West Coast who was also in the real estate business. They used to build housing projects. I called and I said, “This is Frank COOPER. I’m going to be out in your area next week and I wonder if I could interest you in the Gridtronics plan?”
“What is this Gridtronics plan?”
I said, “Well, it’s the one you probably read about where we obtain the films for you and you sell them to your subscriber.”
The operator said, “Listen, I don’t sign no plans.”
But we got our 500,000 anyway, and we got them by Thanksgiving. From there on it was a long, tough, wrestling match with the movie studios.
I should add a footnote here. When Home Box Office scooped us and got on the air, I should say cable cast, their first pay cable picture in November of 1972, they did it via microwave, but they quickly realized this was not very efficient. John Walson’s system was their inaugural outlet. A great many of the systems in Pennsylvania were not reachable by microwave. There simply was not a complete microwave network in place. HBO realized that to reach subscribers in big numbers, they needed the audacity to think in terms of satellite.
Satellite technology in 1972 was something the government utilized. When you talked satellite, you were talking about NASA, you were talking high-tech. It was not yet something we really understood. In cable we hadn’t yet accepted the idea of satellite delivery.
It sounded tremendously expensive. In fact it was tremendously expensive. Somebody had to lease transponder time. Then each operating system would have to have a dish with which to obtain the signal. So it looked like a big capital investment. The dish didn’t bother Home Box Office. With Time Life’s money they could afford to be daring. That’s how they took the play away from Warner/TVC. Home Box Office is still in first place in pay cable because they shot craps when it really counted. It was a very courageous move. Then they went one step further, they told the operators, “Listen, if you can’t afford a dish to get our signal, we’ll help you buy one.”
They probably didn’t realize that in making that promise they were opening the door to the cheap proliferation of satellite dishes. In doing that they really changed the business. TVC/Warner pioneered the concept…but HBO came up with the commercial practicality.
Of course, in turn, that made it possible for Ted Turner to succeed. He was able to make a small Atlanta TV station a national outlet because there was going to be enough dishes out there to make TBS viable. The idea of using the satellite and earth stations soon penetrated the industry’s consciousness. The satellite welcomed multiplicity of signal, and thereby changed the economics of the cable business, and made cable a force to reckon with.
I remember talking to people in the broadcast industry prior to the advent of satellite technology. I remember having a conversation with one of the operating vice-presidents of CBS. He was very contemptuous of the cable industry. To him, cable people were positive nobodies. But boy, did the satellite change all that.
SMITH: Well, most everybody credits the development of satellite transmission for revolutionizing the industry. It certainly did. Let’s follow up with a couple of questions on the Gridtronics story. When was it decided not to go forward with Gridtronics? Apparently in the face of the HBO developments.
COOPER: No, we did go forward. I guess I haven’t explained that well. We went forward in February of 1973. We opened with ten systems; one of them very close to here, in Clearfield, Pennsylvania. We cablecast new movies right from our headends with the Coryell type equipment that I described to you. We used so-called “stand alone equipment” and we would get our films in by “bicycle,” send the can..
SMITH: You mean you shipped it in, for the people unfamiliar with the terminology.
COOPER: Yes, shipped in, and we would obtain enough copies to cycle these through the various headends in our ten system chain. We would cablecast the film from our headend to subscriber homes and the subscriber required a special converter to receive this picture. We invented our own converter. We called it the “Plus Two.” So, as you see, Gridtronics didn’t disappear. We opened with a new name. We decided that the name Gridtronics was unwieldy for advertising purposes. People didn’t understand it. We renamed ourselves “Star Channel.”
We offered a different movie everyday for somewhere around $5 or $6 a month. Eventually the Warner people who had taken control of the business decided they didn’t even like the name Star Channel. They didn’t think that was sufficiently descriptive. Warner changed the name to TMC ‑ The Movie Channel. So it’s still in business and it hasn’t disappeared at all. What has changed is the price and the method of delivery.
SMITH: I must say, I was not aware that the antecedents of The Movie Channel were in Gridtronics.
COOPER: Gridtronics is The Movie Channel.
SMITH: Something new to learn everyday.
COOPER: Let me tell you a funny aside to getting the thing perfected. In 1972, at Home Box Office, a block and a half away from our offices in New York, they are determining that they are going to go up on the bird and deliver the picture that way. Meanwhile, at Warner (TVC, Gridtronics, etc.) We haven’t quite come to grips with the satellite idea. We’re trying to originate signal from the headend. And on our side of the aisle, scientifically was Dr. Peter Goldmark, who as you recall invented the LP record.
SMITH: He did. He was the vice-president in charge of research for CBS.
COOPER: CBS Labs, right. Well, Warner brought in Goldmark and charged him with the responsibility of dissemination of the picture out of the headend. In the meantime, Home Box Office had already solved the delivery problem when they decided to go satellite.
SMITH: Peter Goldmark invented the color television system that CBS proposed to the FCC and got the FCC to adopt at one time. The one that used the rotating mirrors.
COOPER: The color wheel.
SMITH: Yes, and that was presented in competition with RCA’s electronic systems. In the initial stages the CBS system was so superior in picture quality that the FCC adopted it. However, it was never actually put into nationwide operation. Enough for Peter Goldmark; he was a genius.
COOPER: Yes, he was and I remember sitting in a Gridtronics meeting with him and he was very patiently explaining efficient headend techniques. But, I will say this, Goldmark did not know what was going on at Home Box Office; they weren’t telling us and we didn’t know. But Goldmark said, “Well, maybe we ought to be on the satellite.”
Well that went around the room you know like, sure, let’s take on the national debt. That’s why we’re here right now. But Goldmark understood that the cost efficient way to disseminate that signal would be satellite; but we hadn’t digested the idea yet.
SMITH: You have to give Jerry Levin the credit at HBO.
COOPER: I will say this. From time to time, because they are a big company, it’s easy to take a shot at HBO. But even more than Jerry Levin that idea had to get approval at the top because the investment was First Magnitude and you were talking about big money.
SMITH: J. Richard Munro, the chief executive officer, took it before the board. I interviewed Mr. Munro last week, but he bends over backwards to give credit to Levin for the idea. Well the original idea was Chuck Dolan’s, but Jerry Levin apparently shepherded the thing through the developmental stages and Munro presented it to the board. So you’re right, it took commitment and a massive monetary tab.
COOPER: You brought up a very interesting point. It frequently gets forgotten, Chuck Dolan was a big player in all of this. Because he’s done so many things since, it’s forgotten that he used to pump pictures into hotels before any of this. He didn’t do film for cable TV, but he did do films for the hotels.
SMITH: Just for your information and it won’t hurt to have it on the tape for researchers who want to look other places for information, not only will we have the oral history of Munro, but Gerald Levin is scheduled to tell his side of the story and we’re looking forward to that. Then in due course, we’ll nail Chuck Dolan down and get back to the very beginning.
COOPER: When you talk to Jerry Levin, don’t hesitate to tell him that Frank Cooper said he and I met for lunch at the ice skating rink at Rockefeller Center to discuss the fact that HBO wanted the films. I’d like to see how he responds to that.
SMITH: Ok, I’ll not fail to bring it up.
COOPER: You could even play this tape for him so he could hear it.
SMITH: Did you stay with the TVC when it was purchased by Warner?
COOPER: Yes, I stayed because by the time we activated, Warner was now already fully in control of TVC. TVC had already expanded operations in conjunction with Warner. We bought out the Cypress system, which I believe was a Burt Harris operation. I think Burt owned or was a major participant in Cypress. We also bought some Continental telephone systems. We were getting to be a very big company.
I did stay but you can imagine the kind of layers of management that now were beginning to pour into the company. Whereas at TVC, there was Gordon Fuqua, Don Anderson, myself, Joel Smith, just a handful of us. Now at Warner there was a vice president on every floor and in nearly every office. It was becoming a giant corporation. I left in January of ’74. Just about a year after we kicked off the so-called Star Channel.
SMITH: Did your duties remain essentially what they had been when the company was owned by Al Stern?
COOPER: For the most part, yes. In other words, when we were a smaller operation and during the course of those four years, we waited patiently to perfect the Gridtronics experiment, I was occasionally able to wear some other hats. For example, I would sometimes go out and get new franchises. Also, I did some evaluations of existing cable systems in Europe. We all used to double in brass at TVC because it was a much smaller outfit.
Now at Warner, with a tremendous number of management executives in place, the only responsibility I had was Gridtronics or the Star Channel as we were now calling it.
That only lasted about a year because there were tremendous conflicts with so many players involved. The internecine rivalry, the currying for position with the new owners, became quite abhorrent. So that became the end of my corporate life. I left to become an independent cable consultant and sometimes operator.
SMITH: I want to go into that too, but let’s backtrack again back to your days when TVC was owned essentially by Al Stern. Can you remember any specific incidents in some of the negotiating experiences you had with Al with the motion pictures industry that might be worthwhile to put on the record to show the kind of problems you were faced with, and who first broke the ice. Could you give us a little more background in that area?
COOPER: Well, ok, let me try to put together one of our first fiascos in negotiating with the film guys. Alfred very properly decided that if we were going to break the ice with them, they had to see Gridtronics as a commercial practicality. The studios were aware of the cable television business. Although cable wasn’t yet in the big cities, there was enough cable out there for the movie people to be well aware of its existence. When our chief engineer, Coryell, had perfected our headend devices and a converter to play a picture, we decided to do a test in Winter Haven, Florida. We invited key executives of the movie industry responsible for distribution to the television industry to fly to Winter Haven at our expense. We put on a brief seminar at the headend and we put the executives into cars and took them to individual homes where they could see the pictures.
As you know, Winter Haven in Florida, is beautiful country in the winter, warm and pleasant. The movie people were delighted to jump into planes provided by Mr. Stern and fly from less salubrious locations. So the group arrives in Winter Haven, on a beautiful day, hosted by Alfred Stern, himself.
SMITH: How many guests were there?
COOPER: Well, you figure your two from each studio and we had maybe seven studios in those days represented and then a few press types, we must have had a show for twenty-five or thirty people. We had six or seven cars lined up to take them from the headend into subscriber homes and we had alerted certain subscribers that they might get a visit. We reminded the subscribers to let us in so that our guests can see that you are really getting an experimental movie, in this case, absolutely free. It was a demo. The movie people had lent us the film.
Unfortunately, the night before our guests arrived the temperature changed from an afternoon high of around 90 down to 35.
SMITH: Pretty low for Winter Haven.
COOPER: A tremendous swing and nothing was working the next morning because in the early ’60s a temperature fluctuation of this magnitude would knock out the system. The amplifiers were set to play at a given level and the cold weather changed the decibel balance and the pictures were not playing. When the guests arrived we were forced to stall and kept stalling them because we knew one thing. We had a weather report and knew that the temperature would heat up in another hour or two and if we just hold them at the seminar for another hour, it would get warm enough to get good pictures. And we did. We held them. They couldn’t understand why we were stalling. We had everybody talking to them. Droning on and on explaining heterodynes and every other damn thing. Our stomachs were flipping because it was very important to make a good impression on these guys. Fortunately the pictures were playing beautifully when we finally got them into the homes.
SMITH: What kind of reactions did you get from them in terms of their evaluation of the whole show?
COOPER: Well, these were sophisticated businessmen. They were able to see through a lot of our machinations. They knew they had been stalled, and they saw a headend that looked to them like a file cabinet. They weren’t terribly impressed with the technology. These people know good technology when they see it. They have good technicians themselves.
In brief, even though they weren’t terribly impressed with the cable business they took this position: “Let’s assume that you, Mr. Stern, can really deliver our pictures in an efficient manner. What do you get and what do we get?”
That now became the question.
SMITH: Frank, we’re getting a red light again so we’ll have to put in another tape.
End of Tape 1, Side B
SMITH: This is Tape 2, Side A of the oral history interview with Frank Cooper. Frank, at the end of the last tape you had been telling us about the special show that Mr. Stern and his company had put on in Winter Haven, Florida for the motion picture producers and distributors. Do you recall any other experiences that you had with Stern and in your negotiations with the motion picture industry that bear on the problems of getting a pay television service started?
COOPER: Well, let me go back to 1969. I came to New York to take a job that in effect made me the first director of affiliate relations in the cable industry. My main concern was the fact that I could be tarred with a nasty brush because essentially we were talking about pay TV. I was concerned that Gridtronics could prove so politically unpalatable and so commercially non‑viable that I could quite possibly say good‑bye to the cable business. But on the other hand, Stern and Fuqua convinced me that there was not another viable idea around to compare with it and that this was really a path breaking opportunity.
I took the job and it became my responsibility to act as the key figure in a new business. Having engaged me, Stern went back to being chairman and Gordon Fuqua went back to operation of the TV systems. Cooper was the Gridtronics president and now headed up every phase of it. I had to be sure the engineers were perfecting the headend devices. I had the public relations aspect to handle, the press relations aspect to handle and I’m looking at a note here in my diary dated, Wednesday, May 7. I called a gentleman in Washington by the name of Al Warren who, of course, you and I know very well.
SMITH: May 7, 1969?
COOPER: Yes, and I wanted to acquaint him with the fact that TVC had in place a whole new idea for cable television, a “CATV Diversity Project, or plan.” We didn’t want to call this pay cable or pay TV, or pay anything. We simply wanted to call it a program diversity project, and I have in my diary that I pointed out to him that we’re going to unveil this plan at the NCTA convention in June (1969). I wanted him to be well aware of it because the TV Fact Book was in those days, and I think still is, a journal of record.
SMITH: You’re talking about the Television Fact Book.
COOPER: Yes, TV Fact Book, and TV Digest. The weekly was a kind of industry Bible. Every executive read it, and if it appeared there it bore watching.
Al Warren asked me, “Well, what does this thing do if, in fact, you perfect it?”
I replied, “It’s a move whereby cable revenue will be going up. We will change the business from a $5 (monthly) business to a $15 business.”
Al did publish our intentions in TV Digest, the weekly. He said, “TVC will unveil a CATV diversity plan, a CATV diversity plan at the forthcoming convention in San Francisco.” I think the article went on to say the proponents claim that the plan will change industry revenue figures.
SMITH: Well, you are emphasizing your desire at that time not to call it pay TV or subscription TV or, pay anything. But how much diversity were you actually going to be producing when you unveiled this and did you include the medical programs?
COOPER: At the ’69 convention when we introduced it we did indeed feature a medical channel, an educational channel, sports and movies. When we activated, four years later, it is true the only channel we delivered was the movies. But the promise had been fulfilled. When you turn on your TV set tonight, on the cable you will, in fact, get medical information, an educational channel, sports channels, and a movies channel. It has all happened. We didn’t have either the wherewithal or the technology to perfect it all in 1969. So what did we do? We delivered movies which assured a new source of cable revenue. That much we were able to accomplish first. But right behind on our heels, all the other channels did, in fact, materialize.
SMITH: Yes, the vision has been borne out by history. No question about it.
COOPER: You know what Irving Kahn used to say about things like that. He once came up with a great line. He said, “You know our wildest exaggerations have all become perfect truths.”
SMITH: The only reason I raised the point with you was the fact that you wanted to promote it as a diversity service rather than as a pay movie service at a time when the only thing that was feasible for you to do was the movie service.
COOPER: Yes, but politically we couldn’t present the concept as a movie channel or a pay channel. Even though the public had demonstrated over the years that they liked cable. Our enemies knew how to stampede the public. And that’s what we were afraid of. Subscribers like multiplicity of channels, they like plentitude. They love the cable. It’s been demonstrated. Sixty percent of the homes cable passes, take the cable. And it hasn’t been a terribly hard sell. (We’ve been accused of being too soft on marketing.) The public likes the produce and the service. We always knew that they would devour the movies but, in the hands of our enemies, we could be hung by the specter of pay TV. That’s why we introduced Gridtronics in this round about fashion.
SMITH: Does your glancing through your diary suggest any other items that we ought to get into the record about those early pay television days?
COOPER: You remember I said just before Thanksgiving ’69 I knew that I had reached my quota. I had to get 500,000 homes into the pool for Stern and Fuqua and I had 525,000.
I think I went over the top with help from TCI. They agreed to come into the plan reluctantly. They weren’t as aggressive in those days as they are now. Mr. Magness was much more conservative than TCI is under Dr. Malone. They didn’t cotton up to the idea right away. I just can’t swear to it and I don’t have the records at my disposal, but I think it was TCI coming in that brought us over the top. They didn’t have nearly the number of subscribers they now have.
In my notes I’d have a good day when I’d sign a few systems, and I had days where it became very worrisome. I was afraid people were losing interest in Gridtronics because they had other fish to fry. The operators weren’t concentrating on the Gridtronics plan.
I remember at one point I had 300,000 subscribers and I went to Fuqua and I said, “I think we have enough. Let’s see if you and I and Mr. Stern can start calling on the movie people.” Fuqua said, “No way. 500,000 is our number.” Back I went.
SMITH: Well, you got it. Which of the motion pictures producers was the first to decide to go along with you on this experimental operation?
COOPER: Well, here I’m going to conjecture based partly on what I am aware of, and partly on what I think happened.
One of the executives that never took a negative view of the Gridtronics plan was Spencer Harrison at Warner Brothers.
SMITH: Could you keep your voice up just a little, Frank?
COOPER: Yes. Spencer Harrison at Warner Bros. was never skeptical. I believe that because the idea made economic sense to him that he persuaded Steve Ross to go along.
SMITH: I didn’t realize Ross was in Warner that early.
COOPER: Yes, his company, Kinney, took control of Warner during our negotiation period. I think Spencer told Ross that we had an interesting idea here and Warner ought to take it and run with it. The TVC people were a relatively small organization. Here was an opportunity for Warner Brothers to obtain a strong position for the future. That I don’t know for a fact. That has always been my suspicion. I thought that everything that Warner did as regards our concept was positive, whereas our negotiations with the other movie producers were very, very negative. They wanted to quibble. Columbia was exceptionally tough.
SMITH: Who was the Columbia negotiator?
COOPER: I think his name was Cohen.
SMITH: Sounds like Ben Cohen, I think.
COOPER: I remember at a meeting with Columbia where Cohen said, “Certainly you like our ice cream sodas, but can you afford them?” They were very hard people to negotiate with.
But Warner never quibbled. Warner’s attitude was, Can you do it? Can you really deliver these pictures? Will people buy them? Can you demonstrate that there is a public out there for this?” Warner said, “Give us something in the nature of proof. Show us a poll, show us a market survey. Give us a demonstration.” Warner’s attitude was really more scientific. “Prove it!” was the attitude of Warner.
SMITH: Well, when Warner took over TVC, Gridtronics was in operation with a number of systems.
COOPER: No, not quite. Warner took over at the end of ’72. We had become a Warner operation when we activated in February ’73.
SMITH: And the service though, then, got apparently adequate support from Steve Ross to keep it going.
COOPER: Oh yes, because he had been in negotiations with TVC for, about a year. Internally we knew that we were becoming a Warner company; and Warner insisted that the Gridtronics plan was important.
SMITH: And the Ross you are talking about is Steve Ross who is now Chairman of the Board of Time‑Warner after their recent merger.
SMITH: Are there any other happenings of interest during that period that you might recall that we could get into the record here?
COOPER: Why don’t we take a break a minute and let me think.
SMITH: We’re back on the tape. Off the record, we were talking about some personalities in the industry and I mentioned Wally Briscoe.
COOPER: Strat, you remember that I had been invited to come to New York in late February, early March, 1969 to discuss this pay cable idea, the Gridtronics plan. It was decided at the end of my first meeting with Fuqua and Stern that I ought to visit the laboratory that TVC had opened in Winter Haven, Florida. They had hired Shorty Coryell as engineer and were able to do a small in-house demonstration for key executives. Lo and behold who did they invite along with me, and we flew down together, but Wally Briscoe of the NCTA who was executive director at that time. TVC had already decided that they wanted industry input and that they thought that Wally could be a key figure. So Wally and I were standing together in a laboratory watching the first of the many Gridtronics demonstrations. Wally was very encouraging. Wally liked the idea.
SMITH: I might mention to you that this oral history program of the Center has memorialized Wally. We have a program where we are trying to raise money to conduct the program. It’s known as the Wally Briscoe Memorial Fund.
SMITH: This is the morning of June 15th, 1990 and we are resuming the oral history interview with Frank Cooper. Before we started the tape, you mentioned an operation called Cable Philadelphia that you were involved in with Milt Shapp. Could you tell us something about that?
COOPER: Yes, long after the Gridtronics experience and long after I had left Warner Communications I started a consulting firm. I also became an investor in cable systems so that over the years I have operated quite a few of them.
In the period that I am now talking about, Milton Shapp, the former governor of Pennsylvania was no longer “incumbent.” He located an office in the suburbs of Philadelphia not too far from his home and got in touch with me. We met for lunch on a half dozen different occasions discussing the fact that in Philadelphia the cable systems had still not been built. A corner of the city had been wired by Fred Liebermann‑‑many, many years before, sometime in the late ’60s. The old Liebermann franchise had technically expired. His cable system was serving only 12‑14,000 homes in this huge city. City officials were continually holding cable hearings to see if some operators would undertake a state-of-the art system(s) for the entire city.
SMITH: What year, roughly, was this Frank? Could you approximate it?
COOPER: I believe, 1983. And Governor Shapp, the ex‑governor, in one of our lunches said, “Can you believe that I was in the forefront of getting a cable television franchise issued in Philadelphia. After I left Jerrold no one had any intention to build a cable system in Philadelphia. This is, after all, my adopted hometown. I still want to put cable TV in Philadelphia.
I said, “Well, how could you possibly do this now? You’ve never applied under the new franchise ordinance that the city is considering. You’re not an applicant of record, and I think the date for applications has expired.” He said, “Oh, I don’t need a franchise.”
Milt enjoyed being a “cable lawyer.” He said, “Who invented the fact that an independent businessman needs a cable TV franchise to be in the cable TV business. I’m a qualified operator. I’m going to the telephone company and tell them to give me the joint use agreements and I’m going to put up a system. Would you like to be in on that?”
I said, “Well, Governor, I don’t know of a case where you have ever lost. Your track record in cable has always been impeccable and if you’d like to have a shot at it I’ll put a few bucks in with you and let’s start a little company and we’ll call it Cable Philadelphia. Let’s see if in fact, we can get on those poles because if we can, a formal city franchise notwithstanding, it certainly would be an interesting adventure.”
He said, “Well, I’ll see my lawyer.”
There was lawyer in Philadelphia by the name of Harold Kohn who had a tremendous reputation in all of the legal and legislative aspects that would have been the underpinnings for the non-franchise idea. Milton and I went in to see him and he was kind of intrigued. After all Shapp had been the Governor and so even though Kohn was a busy man, he offered to research the idea.
About two weeks later we went back to his office. He said, “Now, I’ll tell you the good news and the bad news. The good news, as I see it, is you probably do indeed have a right to go on those poles. And you probably don’t need a franchise. It would all have to be tested of course.” He said, “But as a practical matter I will tell you it will be a helluva long time before you actually get on them.” This discouraged Milton and that was the end of Cable Philadelphia.
SMITH: One thing I remember about Milt that was so typical of him, and this is an example of it. Milt loved nothing better than to make statements that took positions that were inconsistent with what anybody else might be thinking.
COOPER: He always opposed the conventional wisdom.
SMITH: He really enjoyed doing that. You may recall, Frank, perhaps you weren’t with Jerrold at the time, because it was very, very early in the industry, when there was a lot of talk about pay TV. Zenith had a phone vision plan for pay TV and Skiatron had another plan. There were several that were talking about it, very, very early in the game. Milt became very interested in the subject and Don Kirk…
COOPER: You remember I referred to Don Kirk?
SMITH: Yes, you did. He put Don Kirk on the problem of scrambling and unscrambling.
COOPER: That was Don’s specialty.
SMITH: Encoding. So one day at a convention in New York, one of the early ones, Milt called a press conference and said that Jerrold was going to go into the pay TV business, but that it couldn’t be done the way Zenith wanted to do it, or the others, and that his engineers assured him that Jerrold could sell an undo‑it‑yourself kit to decode the programs. This was another of the examples when I think of Milt and his shock technique. We’ll have an undo‑it‑yourself kit. He liked the turn of the phrase.
COOPER: I think that what you’re reminding me of is, if you had to take a guess, would you agree that was probably early ’60s?
SMITH: Yes, it would have been the early ’60s.
COOPER: That was just before I came to Jerrold. I still remember that from the newspaper talk. Don Kirk whose name you just mentioned was indeed, the leading figure at that time in scrambling and descrambling techniques. When Gridtronics was perfecting the so-called Plus Two Converter, we went to Don Kirk, who was in business in Tampa, Florida called Digital Communications. Don made our first model converters. In fact, he applied for a patent under the Gridtronics name. Gridtronics had its own converter and we paid Kirk to perfect it.
SMITH: And the patent was issued, was it?
COOPER: The patent was issued.
SMITH: That’s interesting.
Frank, you mentioned in connection with the Cable Philadelphia story that you had been a sometimes operator over the years. Would you identify some of the systems that you were in and perhaps the people you were partners with while you were?
COOPER: Sure, let me see if I can remember them all. I think the first cable system in which I had an investment was in Stuttgart, Arkansas. My partners in that system were Gordon Fuqua and Si Pomerantz. Si Pomerantz had been treasurer of the Jerrold Corporation for many, many years. We were in that system together. He died at a very early age.
COOPER: Then, I applied for a franchise in Greer, South Carolina along with my first partner in the consulting business, Joel Smith. We couldn’t afford a lawyer so we brought in a third partner who provided us with legal services a certain, Stanton Dubin, who I might add is my personal attorney to this day.
The three of us obtained the franchise but we ran out of money and had to create a limited partnership through a specialist in New York. The limited wound up with the lion’s share of the investment. The general partner for that situation, was a fellow in New York by the name of Stuart Spitz. He became enamored of cable operations, he liked the cash flow aspects of it, and although he knew very little about cable he knew a lot about venture capital. He asked us to help him acquire a few more systems in which Smith, Dubin and I became participants.
They were in Chincoteague, Virginia. It’s famous for its oysters. Also, Crisfield, Maryland. These are systems on the eastern shore. There was a third system in that group there. It was a very small appendage. It won’t come to me for the moment. I’ll come back to it.
SMITH: Was it near Ocean City? Would that help any?
COOPER: It escapes me. I just seem to be drawing a blank on it. Joel Smith and I were becoming more solvent. The cable television business was looking better by the mid‑’70s. Once satellite dishes began to proliferate, cable began to look like a good investment. The whole industry was in an acquisition mode wherever a small system may have been for sale or the franchise had not yet been let.
We bought a small system in Salem, Indiana and after that I owned systems in partnership with a minority group in Newark, New Jersey. I was also a partner is a system built for a series of resort communities in the Pocono Mountains. We also tied together a few small towns in the Thousand Islands area of New York state and then sold them to Newhouse (New Channels).
Now we’re coming to the ’80s, modern times. An old friend of mine from my days at Warner Communications was visiting Poland. While talking with local authorities in Warsaw, he mentioned cable TV.
SMITH: Would you mind identifying him?
COOPER: Sure. The man is William Sinkunas. He so fascinated the locals that they entered into an agreement with him to bring cable television to Warsaw. The municipality was, at this point, a year or two away from its break away from the communist system. They took a rather open minded view, even then, of a device that could disseminate so much information. They were willing to issue a franchise provided they had government access channels which, of course, Sinkunas assured them they could have. Then Sinkunas returned to the states to put together a cable company that would meet the requirements for financial stability, technical expertise and so forth.
Bill took his franchise which at this point, had not been fully confirmed, to various MSOs and several of the large brokerage houses to obtain financing. He couldn’t get it because the American attitude towards the Polish economy was abysmal. No one appeared willing to take the risk on building a cable TV system in Warsaw, Poland.
Sinkunas called me and said he had the Warsaw franchise and the rights to wire at least another four communities. It sounded fascinating to me, and I offered to assist him in return for equity if we were successful in attracting investors.
Bill Sinkunas and I soon got lessons in Polish jokes. You can’t tell me a Polish joke that I didn’t hear from our prospects. The jokes were the responses that we were getting. And yet, we eventually made a breakthrough. I found some “seed money” for Bill. He was able to return to Poland with assurances that he had start-up money.
Now he had to obtain final government approval so he could raise the much larger sums necessary to fully meet construction commitments.
Finally a joint venture was created whereby the Polish authorities held 30% of the cable TV system and the American side, 70%.
SMITH: Frank, would it be proper to identify the group that came up with the seed money?
COOPER: Well, Strat, to me it’s a very interesting story how we got this thing financed. Keep in mind that Poland was still essentially a communist country and the Lech Walesa “revolution” had not yet taken place. In fact, this is about two years prior to the changeover. When Bill first came back with his franchise, he told me that he had talked to most of the significant brokers in the industry. No one was willing to finance him and he actually had a chance for a national franchise.
He said, “What do you think Frank? Could you find some money to get me financed, at least start up money? Get an expression of interest so that I can report that my cash flow projections etc. are adequate and the construction money is somewhere down the pipeline but will come from traditional cable TV sources. Could you do any of that?” I offered to take it on.
It was an interesting challenge. This is how an example of the independents in the industry, we survive. We survive by our wits. I began to think of who would be interested in this rather exotic franchise behind the “Iron Curtain.” It occurred to me that if a breakthrough was made, how valuable it would be for one of the component manufacturers. I had cut my teeth in this industry at Jerrold and so I went to the Jerrold people first, and I said, “Do you want to get into a deal with a Polish cable TV franchise?” They couldn’t have been less interested. They paid no attention whatsoever. In fact, there was no follow up after my original contacts.
I then remembered that I knew Sidney Topol going back to when I bought equipment from Scientific Atlanta, for the headend in Greer, South Carolina. I got a hold of Sidney who said, “Yes, Scientific Atlanta was indeed interested.” He would put some of his best people on it. And he did.
But his best people soon lost interest. Sidney has since told me, to his chagrin, that he is very annoyed that Scientific Atlanta did not get into this situation.
Finally, I met an old friend, formerly with Jerrold, now at Magnavox, a guy by the name of Chuck Anderson. I told him what I was doing, and I asked, “Is this something that Magnavox ought to take an interest in?”
He said, “Hell, yes. I’ll talk to Dennis Horowitz, the President of Magnavox, and I’ll see if I can get you some help.” The Magnavox people didn’t waste any time. They took a very aggressive attitude. They advanced us some start up money. We were able to send Sinkunas back to Poland.
In time, we ran out of the start up money. I had to put some of my own cash into the deal. But we kept the franchise alive and finally an associate of mine, Ed Rutter, came into the deal. He, in turn, brought with him a guy from the old TelePrompTer corporation, a fellow by the name of Norval Reece.
SMITH: I remember Norval Reece.
COOPER: Well, Norval came in and put a considerable sum into the next phase. We were alive and well at this point.
Now we all had to go out and negotiate for bank money because there were various trigger dates when we had to have significant sums on deposit in Poland in U.S. hard currency. We are talking about money in excess of $1 million.
SMITH: This was all pre‑revolution dates?
COOPER: This period is only about a year ago, 1990. So the “revolution” had by now occurred. Nonetheless we had to have real money on the line. Reece found through his contacts a certain David Chase of Chase Enterprises in Connecticut. But Chase came in with very strong financial commitments.
SMITH: Not part of the Chase banking group?
COOPER: No, not that Chase. This is a certain David Chase who is a survivor of the Auschwitz prison camps. The idea of investing in his native land, in this new revolutionary environment, was tremendously emotionally, appealing to him. He’s a man of great wealth. All of itself earned…climbing up by his own bootstraps, as a sixteen year old, a penniless refugee from Auschwitz, here in the United States. He came here with absolutely nothing and very recently was in “Forbes 400” as one of the richest men in the United States.
SMITH: Frank, this might be a good time to turn the tape over because we have the red light flashing.
End of Tape 2, Side A
SMITH: This is Tape 2, Side B of the oral history interview with Frank Cooper. Frank, you were talking about the financing problems involved in getting money for a cable system in Warsaw, Poland. Could you continue with your comments?
COOPER: Yes, in getting the money for what was then considered a very exotic idea, (cable in a communist country) was among the hardest things I’ve ever had to do. I take pride in the creative thought processes by which I said, “I don’t want to hear any more Polish jokes from the American investment community. If I hear one more, I’ll get sick. What I want to figure out is, “Who would like to see this work.”
That was my best idea. I finally reasoned that a manufacturer of components would like to see it succeed, because there is a tremendous amount of untapped opportunity in eastern Europe if you can break the back of the problem. Magnavox recognized that. Then step by step by step, we brought in more players and more players.
Today, my share through dilution and by virtue of the fact that my own cash investment is very small, in turn my investment percentage wise in the Polish franchise is small. But nonetheless, the old saying is that it is better to have a small piece of pie than no pie at all.
Today, circa 1991, if you go into Europe today, behind the so-called Iron Curtain, you will fall over CATV franchise men. Americans that you and I know. They are all over there now. They want Russian, Rumanian, Hungarian, Czechoslovakian, cable TV franchises.
One of my associates is there at this very moment and told me, on the phone, that all he sees over there are U.S. franchise men.
We, in a way, were on the cutting edge of a really remarkable achievement. We know that television, and the proliferation of signals and the distribution of television signal is changing the face of the world. It’s very plain to me that in not being able to keep out TV signals, the Russians themselves were overcome by the capitalist or the consumer revolution. Once “Western” pictures started getting behind the Iron Curtain, once the Soviet masses saw how the rest of the world was living–once their intellectuals saw freedom of expression, once their kids saw blue jeans and MTV…the word was out. They saw something they liked. They suddenly realized none of this originated behind the Iron Curtain.
“Comrade, where are all these wonderful things that were supposed to happen as a result of Marxism? We’ve got nothing. The capitalists have everything. Maybe it’s time to change direction.”
SMITH: I was going to ask you Frank, what your feelings were about the future of cable/satellite international programming in terms of international relationships? Do you think it’s going to have any significant impact on international affairs?
COOPER: Indeed, I do. I think the franchise process is going to throw both the western and eastern European community into a real shock. We Americans built a franchising and regulatory process that is understood by all interested parties. The Europeans now have to come to grips with it.
In addition, because cable TV got to Europe late, competing delivery methods have proliferated there. Direct broadcast satellite we started there. Cable TV is there now. Multi‑point distribution services are already there. Most of the European countries govern their television systems through their postal and telegraph departments. Just how the voluminous legal issues will finally be resolved I have no idea. There’s going to be an interesting decade ahead in the communications industries.
In my experience in dealing with the international community…as a case in point, I was in Israel a few years ago using some Philadelphia connections. I called on the postal telegraph department to discuss my interest in getting into the cable television business in Israel.
The bureaucrats there were very possessive about who could build, own, and operate cable TV systems. The only thing they really showed me was the door.
Even though the Poland experience made it a little easier for us, I feel that a tremendous number of legal problems must be resolved, not to mention operating experience, before money is going to be made by American investors in international telecommunications.
In telling my little experience in Israel about seven years ago, what I’m alluding to is the fact that we Americans are not alone in recognizing the impact of cable television. It’s recognized by the investment community and by the bureaucrats all over the world.
What I’m alluding to is they were very jealous of their preserves in Israel. They did not want some American coming over there and “helping” them create something called CATV service. Their attitude is that can do it themselves. At this point in time they have issued their franchises. The franchise conditions are fairly stringent. As you know, Strat, Gene Schneider, an old CATV pioneer has made an investment in “United International” in Israel.
SMITH: I think that’s the name.
COOPER: He’s in there. I think that in the international arena, we Americans are the founders of cable TV, are going to find it’s not going to be a piece of cake getting your profits out. Dealing with foreign governments and the thicket of both political and legal issues resolved is going to take a while to learn.
As I was saying, the American franchise applicants are now all over the world. Just as they were once all over the United States. Well, rightly so. I’m not disinterested, myself. In fact I was an applicant who lost a cable bid just a few weeks ago in Malta. I still think it’s going to be a difficult decade before anybody sees profit.
SMITH: Are you thinking of any other potential franchise applications in Europe or in any other country?
COOPER: Yes, very much so. Spain, for example, does not have any significant cable TV. Nor does a market we consider tremendously valuable which is East Germany. I have been trying to make contacts there.
Incidentally also looming on the franchise horizon is Latin America. I am beginning to make franchise applications in Latin America. They want cable TV as much as the Europeans do. They are dying for it. They know about Home Box Office, ESPN. The problem is that the government in most Latin American countries right now is unstable, perhaps more so than the Eastern Bloc countries.
SMITH: It means, of course, that you’re not going to get the money.
COOPER: It’s going to be hard to get the financing. But in a couple of, hopefully, stable situations, we are making applications there in Latin America. I’m not mentioning some because someone will be behind me saying, “Cooper’s down there, I’m going to go down there.”
SMITH: Well, I won’t have you put any business secrets on the record. When you mentioned Malta, the question just occurred to me, “I wonder if he’s doing any others?”
COOPER: In a word, “Yes.”
SMITH: Frank, if I’ve got the sequences correct, after you left Warner, was that when you set up your own consulting business?
COOPER: Yes, I started a consulting firm with Joel Smith. Both of us having been at Warner and we called the firm Smith‑Cooper Associates. Joel was with me from ’74, when we both left Warner, to 1978. Joel was offered a very good job with part of Capital Cities. When Cap Cities went into the cable television business, somebody there liked him and brought him over for start-up
I was an independent consultant on my own for a few more years, and I had assembled a fairly good sized staff. I realized that I was starting to get older. Cable TV consulting business is very demanding and very hard work. So one day, I sold the business out to the young men that were working in it. It’s had several exchanges in name, much like a law firm changes its name when the partners leave. So it went from Cooper Associates after Smith left, to Cooper‑Rutter Associates. It’s now Rutter‑Dunn Communications. A lot of the apparatus and old records are still in place, but I am no longer a member of the firm, but I have an office there.
SMITH: Would you mind identifying some of the franchise applications that you were active in? This would have been during the period of franchising frenzies in major markets, wouldn’t it?
COOPER: Okay, let me tell you some of the things that were happening while I was in the consulting business and why it was necessary to maintain a good sized staff. In the mid-’70s and for about ten years, there was a feeding frenzy in franchising. My firm would get two types of business calls: A) cities would call for consulting advice, saying, “We are about to let a franchise, but we want final input on how the franchise should read, how it should best serve the public interest, and how to determine who is the qualified or the most qualified of the many applicants.”
So we had to put together a consulting staff that consisted of a lawyer for franchising language, an engineer who was able to set the technical specs, a marketing specialist who was able to determine the quality of the sales plan, a financial specialist who could interpret the financial schedules.
Then, “B”, we would get some of the major MSOs who because of the feeding frenzy were running out of staff to prepare these many applications. They asked us to help put together their proposal books. We were accused of working both sides of the street. Our fiercest enemy at that time was the Cable Television Information Center in Washington, D.C. Boy did we ever go hammer and tongue with them. We thought of them as anti‑cable, especially anti-operator. The CTIC created unreasonable demands on the franchises. They stretched the bounds of good sense. They were insistent on all sorts of local access conditions. They demanded an exorbitant number of channels. The Cable Television Information Center had no sense of commercial viability. When we worked for operators we frequently had to contend with the CTIC serving the municipality.
If, in an all together different city, we were acting as the city’s consultant the Cable Television Information Center, would come in and claim to represent the public interest. The CTIC had no experience in system operations, and no interest in “P&L.” The fact is that circa 1990 is they’re apparently out of business. I’m still in it.
SMITH: Yes, they are out of business. And Frank, your emotional response to the CTIC, I have found, is shared throughout the cable television industry. Are you aware of how they got started?
COOPER: Was it the John and Mary Markle Foundation that gave them all that money? Somebody gave them a hell of a lot of money.
SMITH: Now that raises a question. I thought it was the Ford Foundation. But we’ll have to find out. (Ford is correct.)
COOPER: I know they were funded by a foundation and I thought it was the John and Mary Markle Foundation, I may be wrong.
SMITH: And it probably was. We probably have some in the file here.
COOPER: If I could find my old files I would be able to give you the name. I used to send away for their publications. Incidentally I was the City of Philadelphia’s cable consultant for three or four years, during the evaluation process.
SMITH: I did not know that.
COOPER: Oh yeah, I was a long term consultant to the city of Philadelphia. There were several turn-overs of mayors and finally a mayor came in that really didn’t like me and I was out, but I was with the city for a long time. I was there during the tenure of famous Frank Rizzo. You’ve heard of Frank Rizzo.
SMITH: Everybody’s heard of Frank Rizzo.
COOPER: Well, during his tenure I was the city’s cable consultant.
SMITH: Well, having gotten on that subject tell us something about the inner-workings of that period in the city of Philadelphia. That would be interesting to hear about.
COOPER: Well, if you could turn that off so I could gather my thoughts.
SMITH: Frank, we went off the record for a moment right after you mentioned that you were for several years a cable television consultant for the city of Philadelphia. It would be helpful if you would review for this record your experiences during that period of time, relative to the franchising process in Philadelphia.
COOPER: Well, extensive evaluation hearings were held in the late 1970s. The city, with our assistance, issued an RFP.
SMITH: Request for proposal?
COOPER: Yes. A franchise was passed and the hearings were held. The Philadelphia Department of Public Property (with Cooper Associates sitting in as advisors) conducted the hearings during which each of the applicants presented four volume proposals, some the size of a telephone directory. It should be noted that it was the influence of the Cable Television Information Center created the demand for these unduly costly proposals. One applicant was said to have spent a million dollars on its application.
SMITH: You’re talking about the influence of the CTIC.
COOPER: Right. The CTIC would send a public interest advocate who would say this is a sloppy process here. So Philadelphia officials were “under the gun.” It became necessary to hold a very elaborate hearing process. The proposals came in volumes. All of the major MSOs were applicants. You needed derricks to get the books hauled into the basement of the Department of Public Property.
Just picture it…this huge number of directory-size books being suddenly brought into city hall. No one knew what the hell to do with so many of them and they’re probably still there. It is not logical to suppose that the politicians would read them–but of course our staff was required to read every word. Suffice to say, we earned our fee.
William Green became the next mayor. Rizzo, as his last act, said he could not approve of the franchise.
There were all sorts of rumors that the city councilmen had taken undue interest in the franchise procedure, and Rizzo who was being now replaced by Green, wanted to make certain that his skirts were clean on the cable TV issue. He refused to preside over the disposition of the cable television issue. It fell to the William Green administration.
Green finally did, in fact, hold hearings and made the franchise awards. It took him another year or two. For about a year I continued to be the city’s cable consultant but the Green administration and I were not as compatible as the Rizzo administration had been. So that consultancy was terminated. But finally the franchise awards were made-‑ Comcast won one. Greater Media won one. Wade Communications, a black minority company, won one. I think Comcast now has two of those franchises because there was another franchise, Rollins, went out of the cable business and the franchise went to Comcast.
Wade had a lot of trouble raising the necessary money. I knew this from my experience with the situation. The local authorities were concerned that he might fail.
I was instrumental in getting Alan Gerry interested in taking a position with so that sufficient funding could be brought in for Wade.
SMITH: Could you give us a complete name for Wade?
COOPER: James Wade. But he called himself Wade Communications. He was the franchise broker.
SMITH: He was a black man.
COOPER: Yes. He was not precluded from bringing in white investors and he did. And Alan Gerry, of Cablevision Industries, was deeply involved in getting that franchise built. It’s operating now and they’ve got a considerable number of subscribers. Each one of the Philadelphia franchises…I was part of the deliberations by which the size and boundaries of those franchises were finally determined; each of them had approximately 155,000 homes.
This city manager carved out sensible franchise boundaries. Each franchise has about 155,000 homes to serve. They each have similar demographics. The operators are overcoming many big city problems in completing the construction because the city is replete with difficult construction conditions. There are some parts of Philadelphia that require many miles of underground construction.
In 1979 when I was the city consultant a city block of underground construction was $65,000. Today, I would think that doesn’t touch the cost of doing a city block. Philadelphia is a very old city and its downtown area has been rehabbed and gentrified. You don’t have such a thing as telephone poles around Independence Hall or Center City. So construction conditions are very difficult. In “Center City,” or downtown Philadelphia, there’s a lot of conduit construction or bracket construction required.
SMITH: That must have been a real problem.
COOPER: The problems have been intense. There were also sides of the street where there were transformers with high voltage lines. This also precludes cable TV. The companies encountered every difficult condition for construction that could transpire. But of course, that’s also true in places like Chicago, Washington, and other big cities. And it’s among the reasons (not the only reason) that cable TV came to the cities late. Of course, as I was discussing earlier I personally opposed building CATV anywhere near Philadelphia in the 1970s.
Well, this is a case, among others, where I’ve been proved wrong. Once the cheap satellite dish came in, once HBO went on the air, with the satellite signal and Ted Turner went on with TBS, the ball game changed. For example, the Cherry Hill, New Jersey franchise became a valuable piece of paper when Irving Kahn decided he was going to acquire it. Irving went out and raised the money and built a tremendous complex in Cherry Hill, for all practical purposes, “eastern Philadelphia.” He subsequently built there one of the biggest systems in the country and then sold it to the New York Times. The New York Times very recently sold it to Comcast.
SMITH: Frank, you mentioned earlier off the record, some of the better known names in the early and mid‑years cable industry that had early franchises in Philadelphia and decided not to go forward with them. Would you put that on the record for us?
COOPER: Oh, sure. Fred Liebermann was one of the first round franchises and now I’m talking about the mid‑’60s in Philadelphia. Franchises were also awarded to the Bulletin Company and to the Philadelphia Inquirer which was Triangle Publications. One was issued to Milton Shapp, of the Jerrold Corporation. Only Liebermann had the courage to build at that time and he only served 12,000 subscribers. Things stayed that way for many, many years because of signal.
The Bulletin folded. Walter Annenberg divested himself of Triangle. Jerrold sold out to Sammons. Sammons acquired all of the Jerrold operating systems. Sammons turned back the cable TV franchise. For a period of about fifteen years, there was simply no cable, to speak of, in Philadelphia.
To the extent that the original franchise that Liebermann built under the small pocket of about 12,000 subscribers. That’s all that was in Philadelphia for 15 years and the franchises expired. What this illustrates is there was no hope under the then existing signal conditions to build systems in most of the large cities.
SMITH: Then to go back to a point that you’ve made in other connections in this interview it was the advent of the relatively inexpensive satellite dish that made Philadelphia and cities like it attractive prospects for cable.
COOPER: Yes, but we should keep in mind that indeed, cable came alive once you could bring something that the public was interested in, namely the movies. Going back to what we were talking about all day yesterday, the Gridtronics CATV diversity plan, the idea of giving the subscriber something other than broadcast channels was responsible for creating demand for the dish. Home Box was desperately seeking a way to distribute that signal because it became very evident to them that there weren’t sufficient microwave lengths to make a national network for pay cable. Some other method had to be found. Satellite transmission was thought of as a very exotic military device. Who would use the satellite other than the Army and the Navy? It wasn’t considered a commercial practicality when it was first discussed. In my opinion the Gridtronics plan, and HBO’s daring, changed television forever.
When I look back at the revolutionary impact of the events in which I was privileged to participate, it is a source of pride and pleasure.
Pride, in that, however small or large my role may have been, along with my associates in Gridtronics, we made a historic breakthrough. We actually delivered films, new, uninterrupted, feature films into millions of American homes. No one can discount the success of that commercial venture. The development of pay cable, I believe, was responsible for the penetration figures that the cable industry enjoys today and in turn it makes possible the employment of thousands of creative people in the film and television industries.
The pleasure I find in the achievement is that, like millions of others, I am a viewer, too.
End of Tape 2, Side B