Interview Date: December 1, 2002
Interviewer: Jim Keller
Abstract
In 1964, after serving on a taskforce to study the feasibility of General Electric’s entry into the cable business, Douglas Dittrick became director of the company’s new division, General Electric Cablevision. In 1968 he was recruited to become vice-president and treasurer of the newly-established American Television and Communications Corporation (ATC). His responsibilities encompassed the areas of operations, plants, franchising, acquisitions, mergers and finance. He left ATC in 1973 to become president of Viacom, and eleven years later, formed Douglas Communications Corporation. He discusses his time on the board and as chair of NCTA, pole attachment agreements, and the opposition from both telephone companies and broadcasters. He explores the issues around FCC regulation, and provides recollections of Ted Turner. Dittrick tracks the start and growth of Douglas Cable Communications. He concludes with reflections about Monty Rifkin, and other cable pioneers.
Interview Transcript
JIM KELLER: This is the oral history of Douglas H. Dittrick, currently Chairman and CEO of Douglas Communications, cable television entrepreneur extraordinaire, corporate executive for the last almost 40 years, Cable Pioneer, and one of the good guys of the cable television industry. We are currently in the Valley Health Systems offices in Ridgewood, New Jersey where Doug currently is serving as the chairman of the board of the Valley Health System. This interview is part of the Oral History Program of The National Cable Television Center and Museum and is brought to you by a grant from the Gustave Hauser Foundation for which we are very appreciative. Doug, to start out with tell us a little bit about your background before you got involved in cable television.
DOUG DITTRICK: All right. I was at General Electric Company, Jim. I’d been there in the traveling audit staff and some other functions. I had a stint in the Air Force after college and then GE, and GE formed a task force to look into the thing called CATV (5) as it was called back then in the mid ’60s.
KELLER: CATV. Mostly by the telephone companies.
DITTRICK: Probably. But the big General Electric Company in Schenectady, New York and we had a small broadcasting company with a station, WRGB in Schenectady, and somebody had applied for a franchise in Troy, or Albany, New York, which was one of the three cities in that tri-station market. So the company said they should do something to find out what this was and I was asked as a member of the audit staff to be the financial fellow on a small group to look at this thing called cable television. So we set out to do this – there were three of us, a person from the corporate planning office, myself and a fellow who had run the broadcasting station. We spent three months, we interviewed everybody from Irving Kahn at the Algonquin, and Al Stern and all these names which I would later find out had been very active, obviously, in the business and we decided that we ought to try to get into that business. So we formed a company, General Electric Cablevision. We applied for franchises in our market.
KELLER: Why did they decide to go into it? What were the findings of your task force?
DITTRICK: Well, we said it was an interesting business as an adjunct to our broadcasting business and we ought to do it to protect our markets. There were other far-fetched things like the General Electric Labs were there and they were in the electric metering business and they said well, here’s a wire into the home that perhaps we could do things with reading meters and other things, so we were early on looking at those kind of associated things.
KELLER: Did you look at the economics of the business at that point to see whether it would be a business or not?
DITTRICK: We tried to look at it. Certainly the economics of the cable business, that was back when you were paying $300 a subscriber and a $5 monthly rate appeared to be all right and we were small enough on the radar screen that we went ahead and did it. Things like the meter reading business and others were kind of far out and stayed far out.
KELLER: Still is today.
DITTRICK: It is. So we formed the company. I was able to meet a number of people, and in fact joined the National Cable Association board at that point.
KELLER: Right away you were on the board?
DITTRICK: Earlier than I should have. We got a call from Wally Briscoe one day when they heard that GE was getting in the business. I happened to take the call and when told that they’d like to have somebody from GE on the board I volunteered myself which was the first time I ever did anything like that and it was the best thing I ever did, obviously.
KELLER: You learned in a hurry.
DITTRICK: I did. So I was able to join the board and met all the people who were on the board in the late ’60s and it was obviously a great learning time for me, but a lot of fun. We bought some cable systems.
KELLER: Let me put it this way, why were you finally tapped then to become president of the General Electric Cablevision systems?
DITTRICK: I never got to really do that job. I ran the operations and I did it only because when we formed the company the general manager, a fellow by the name of Bob Hanna, and I were told we’d go out and start this venture. Bob retired from the General Electric Company about a year later, and so I was the activist fellow. Through that association then on the trade association board met Monty Rifkin among others and Monty then asked me to join him as they were starting a new company which was going to be called American Television.
KELLER: Here you went with a brand new operation and left a major, major company who could pour – deep pockets – they could pour almost as much money as they wanted to into it. Why did you do that?
DITTRICK: Well, big companies have big pockets but don’t necessarily spend it on small projects and I don’t think they ever planned to really do a lot in there. I had just begun to learn about leverage and entrepreneurship and so I was fairly easy for Monty, who came from a background with Bill Daniels who you know and was one of our real grandfathers…
KELLER: TelePrompTer before that.
DITTRICK: Yes. So I learned about leverage and things that you could do that you couldn’t do at a big General Electric Company. GE had 200,000 employees at the time, it was a huge company and it gave us a chance to do something different. Not that we totally knew what we were getting into but…
KELLER: Monty had an angel at that point in addition to Bill and that was Royal Little, is that correct?
DITTRICK: That’s right. I don’t know if he was an angel, but I think Daniels was running properties for Narragansett Capital, for Boston Capital, for ADT which was the investment trust of one of those, and Royal was kind of the fellow in the middle of all that – Providence, Boston circle – so that Royal who was very well known I think was the first living guy inducted into the Fortune business hall of fame with Andrew Carnegie and DuPont and Rockefeller, etc. And Royal was obviously a great figure, a great role model and added a great deal of credibility to what we did when we started American Television.
KELLER: He served as chairman of the board for some time, didn’t he?
DITTRICK: He did. He did. We came public – back then Bob Rosencrans was taking United, whatever he called himself, but they took that company public and I think maybe Gene Schneider and ATC all came public back in the late ’60s and we were able to do it because of Royal Little being our chairman.
KELLER: I think H&B American went about that same time, didn’t they? ’68, ’69, about that time?
DITTRICK: I think they might have, yes.
KELLER: Do you remember the other people on the board of ATC?
DITTRICK: Well, we had Harvey Sarrows – I run into his son who’s at the Fleet Bank – Gene Davalpin was a Boston Capital guy, Pete Conrad was an old buddy of Bill Daniels and was an astronaut at the time and he was on the board, and Monty. It was a relatively small board but ATC was formed really with the companies that Daniels had been running for those groups.
KELLER: And Daniels had been operating many companies before and finally he got these individual systems that he threw into and became ATC and gave them to Monty then.
DITTRICK: That’s correct. And one of them that I think Bill and Monty might have owned in Fort Dodge, Iowa.
KELLER: Fort Dodge, I remember.
DITTRICK: Our big contract there was with the prison.
KELLER: And you stayed with ATC then for?
DITTRICK: About five years.
KELLER: What do you remember most about your experience with ATC?
DITTRICK: I think it was the fun of seeing a total start-up business. Monty was pretty good to work with for me, and Monty left all the operations in my hands so that I was able to work with all the people in the field. So while I was kind of learning the business I worked with some great people who were the real salt of the earth of cable back in the late ’60s, early ’70s.
KELLER: Tom Leegan, Vern Ribal…
DITTRICK: I was just going to mention Vern in Emporia and Chanute and the big thing that he wanted was a Dodge Charger so I coined a term to myself anyway that there was a thing called psychic income. You didn’t have to pay these guys a lot of money but if I got him a Charger he was hot stuff in Chanute.
KELLER: And Independence.
DITTRICK: Parsons and Independence, Kansas, and then Tom Leegan down in Kennet, Missouri, just a class guy and fun to work with and these guys really worked the trenches out there.
KELLER: Was George Meyers with us at the time up in Minnesota?
DITTRICK: Yes, he was up in Mankato. An old line cable guy who’d probably been in the business since the early ’50s, active in his town, loved Mankato and went with that whole Mankato group including Bresnan and a lot of the old names up there.
KELLER: These are names really from the past, but they really were operational guys at that time.
DITTRICK: They were. They were all the general managers of these systems or in the case of Vern and Tom had smaller systems and so they’d have six or eight or ten systems they worried about.
KELLER: It was great, and then as the company developed they became more and more important and they became regional managers and then a couple of us were over them…
DITTRICK: Jimmy Doolittle in North Carolina when we acquired that complex of systems. I met Jerry Marnell when we went down to Fayetteville to look at the systems, that was the first time I met Jerry who was with us but was living out in Kansas. Monty told me, “This guy’s a bright engineer but he doesn’t talk a lot.” So we met at a bar when we both arrived in Fayetteville and we sat there and I had to drink six or eight beers and I don’t think I got six words out of Jerry. He stayed a friend for 25 years.
KELLER: As the system developed, the early franchising efforts back in the early to mid ’70s was starting to develop now, especially in the medium sized markets around the country. Do you have any storied about your franchising efforts at that time?
DITTRICK: Probably some but I couldn’t tell them all. But we were there and in fact you were involved with us in doing that, and Bruce Lovitt who we’d hired who had been general counsel of the trade association and he came in to do that, and then we had our famous Jack Gault who was… Jack is Jack.
KELLER: Just Jack Gault, that’s all you can say.
DITTRICK: You can’t describe him any better than that. But we did a lot of that and before they came on board I was still doing a number of those systems and in those days oftentimes we would put together local groups to help us with the political infighting in towns, but everybody else was doing the same thing and we’d meet the same people on the road. I’d meet Les Read or Bob Hughes…
KELLER: Jerry Lindauer.
DITTRICK: Lindauer was there. I mean, we were all out doing the same thing and we’d meet each other and after the city council would meet we’d even have a beer together. It was a good process and as far as I know it was a pretty upfront and an honest process. It was an interesting time, and for us at ATC it was a good time to expand what we were doing, so we had some good luck. We got franchises, before I left anyway, in Shreveport and Jackson. I know when I left you were working up in Portland, Maine.
KELLER: Birmingham.
DITTRICK: Birmingham, Alabama. So we did a lot of places and as it turned out they’ve been good systems.
KELLER: They really have, except Monty really didn’t want Birmingham that badly at the time because – do you remember Birmingham? As you came in from the airport?
DITTRICK: Yes.
KELLER: Until you got to downtown there was nothing. It looked like a disaster area and that was his first impression of Birmingham.
DITTRICK: Well, we couldn’t do all. At the time we thought the best places were to get state capitols and/or good resorts and you ran out of those pretty quick. Columbus, Ohio was one of those.
KELLER: Tell us about the Orlando story.
DITTRICK: The Orlando story? Well, we got the franchise; we put together the local group, Orange County Cablevision. We had a very interesting group – an insurance guy, a beer distributor, these were people who had been active in Orlando politics. The franchise wasn’t that heavily contested, quite frankly.
KELLER: Well, no one wanted it really.
DITTRICK: We ended up bidding on a dual cable system because we didn’t have the capacity and amplifiers in those days to go beyond 12 channels, so we had all this fancy stuff with multiple channels. So we built and bid a dual cable plant. We continued getting all the franchises around there and did a pretty good job. The only person competing outside was Times Mirror, but it was a little sleepy western cow town called Kissimmee which literally had dirt streets when we were there.
KELLER: And it did until Disney went in there.
DITTRICK: Obviously if I’d known it I could have bought 100 acres of ground down there and sold it to Disney and made a fortune. But we built a dual cable plant, tried to do all kinds of things with it.
KELLER: It was a real drain on the company, wasn’t it?
DITTRICK: It was a lot of work.
KELLER: It was the first really two-way cable system or services that the industry had done.
DITTRICK: And if you ever had a chance to go down there and look at the cable plant you could see why it was a problem. Poles would sag from the weight of the plant that we put up there, but it got us started and we sold the Vision – I remember doing one sample where we showed an ambulance out on a freeway videotaping back to a hospital because of the two-way capability the injuries that had happened in a car accident, not a real life thing, but trying to demo what we could do with two-way cable. So it was always an experimental thing and fortunately the market took off in Orlando, Winter Park and the entire Orange County area, obviously after Disney came, just blossomed. But for a long time that dual-cable plant was there and it was a drain and a young man was hired to be an assistant to our manager – we’d hired a manager who’d been a lawyer at the FCC who was struggling with this whole involvement – but we hired a bright young MBA who one of our directors, Collier Crumb, recommended to us, so Joe Collins arrived in Orlando, Florida.
KELLER: He’s the only one that survived it, too.
DITTRICK: He probably was. Shorty Coryell came down from the Berks.
KELLER: But that just ate up managers down there trying to make that thing go, as I recall.
DITTRICK: It probably would’ve eaten up me if I’d stayed but I left and Joe was in good shape.
KELLER: Tommy Alexander was down there at the time, and who else? I think Gault was down there, wasn’t he, for awhile?
DITTRICK: He might have been. Jack would go in and come out.
KELLER: It was a real disaster as I remember it then.
DITTRICK: It was a tough job because of the capital that we’d invested in that dual-cable.
KELLER: Somebody told me that the reason that Monty wanted Orlando worse than anything else was – did his mother move down there or somebody…?
DITTRICK: Might be. I didn’t hear that story.
KELLER: Because no one really knew why Monty ever wanted Orlando.
DITTRICK: I thought we did it because we had a good shot at it and it was a growing market. I never heard the other story.
KELLER: That’s fair enough then. When did you leave ATC and how did you leave, under what conditions and where did you go?
DITTRICK: Pete Conrad had been one of our directors and Monty was going to hire Pete to come in to be president of the company which was fine, and Monty and I just had some differences as to what role I might be playing going forward. So I’d been approached by some people to talk to Viacom (Vee-a-com), Viacome (Vi-a-com), whatever it was, at the time I think it was Viacom (Vee-a-com), and they were looking for a president for their operation and so after Monty had made that decision I went ahead and told a headhunter that I would talk to them and a couple months later I became president of Viacom’s cable group and worked for Ralph Baruch in New York. I moved from Denver to New York, in fact moved here to Ridgewood, New Jersey where we’ve lived for 30 years.
KELLER: And how long did you stay with Viacom?
DITTRICK: I was there about five years. I went through two years as chair of the trade association.
KELLER: Before that – I do want to get into that in detail – but I’m more interested in Viacom acquiring CBS properties and how you got involved with that with the Goddards and things like that.
DITTRICK: Viacom was spun-off from CBS and they spun out their cable properties and their syndicated products business. Ralph Baruch became chairman of that spin-off; all these people were CBS people. I came in as the cable person to run that cable group. They had a group in California run by John Goddard who was one of the more capable guys I’ve ever known.
KELLER: Yes, and Scotty Bergren, was he there at the time?
DITTRICK: Scott was not. He came out of the Bergren-Goddard group that had been bought by CBS back in the early ’60s, and so John was running that. We’d acquired a company in Cleveland they’d acquired before I got there and a company in Long Island which was…
KELLER: Was that Lakewood in Cleveland?
DITTRICK: Yes.
KELLER: Was that where Smiley… what’s his name? Liptak, Greg Liptak was there, wasn’t he at that time?
DITTRICK: No, not when I was there, but they’d acquired four fellows, one of them who was at the broadcasting company, a fellow by the name of Miller who was a football player from Notre Dame and a lawyer, Creighton Miller and they had sold it to Viacom. These were all done before I arrived, and the big one of course was on Long Island where we had 65,000-70,000 subscribers based out of Iceland. So I ended up there working out of New York, traveling a lot. For a fellow from Ohio who had just spent five years in Denver with blue skies and a ten minute commute, working in New York City was a difficult transition.
KELLER: And also your systems were in a major market at that time and that was at the very difficult days of the industry.
DITTRICK: Yes. San Francisco obviously was one of the markets and it had been up and down and the problems of construction, maintenance, and everything else in major cities was not easy.
KELLER: And the expenditure that no one ever really anticipated. As I recall, because I was involved in San Francisco, they were basing their financial projections on the history of the industry from small communities and it just didn’t work.
DITTRICK: Yes. It was a big change so we were all going through that.
KELLER: And how long did you operate these systems in Viacom?
DITTRICK: I had a five year life cycle in all my jobs. I must have upset my boss whoever it was and after five years they’d move me on somewhere else. But after five years and I’d finished the trade association job, I was approached by a friend, John Saeman, who was also at Daniels and John knew of some venture capital people who wanted to get in the cable business and he thought maybe I would be interested in doing it with them. So I left Viacom to form Douglas…
KELLER: I want to com back to the Douglas Communications, but I want to go into your trade association experience. You said you went on the board early on when you became associated with GE Cable, you went onto the board, do you remember who the chairman of the board was at that time?
DITTRICK: Probably Al Stern, maybe before that, I don’t know, it was the late ’60s, early ’70s. I don’t have my history too well.
KELLER: What year was this?
DITTRICK: I’m guessing ’68, ’69.
KELLER: Crosby and then Stern was ’66, ’67.
DITTRICK: Al was, so I must have gone on in ’67.
KELLER: Then Jack Crosby and then Bob Beisswenger.
DITTRICK: My interesting thing was there I was living in Denver – excuse me, I went on just before I moved out to Denver – but when I got to Denver I was on the board and I don’t think Monty was, and then in those days you could only have one person from each company so I stayed on the board, but I would go to NCTA board meetings and we’d fly out publicly out of Denver’s airport and I’d go with a fellow by the name of Bob Magness. So it was a chance to, for me anyway, to meet some of the real legends of the cable business and meet a guy like Magness and travel with him, if you will, and here I would find great stories if you could get Bob to talk which was sometimes a little bit of an effort but you’d certainly see him go chewing through those cigars. Bob Magness, as you remember, I don’t think I ever saw him with a lighted cigar but he would go through four cigars a day and he’d just chew them down to nothing.
KELLER: And wouldn’t even spit them out. I don’t know where it went.
DITTRICK: But he was a wonderful guy. Some of those people who were here in those early days just were good people.
KELLER: Bob Magness was the founder and chairman of Television Communications, Inc., TCI, and brought John Malone into the business. I remember the opening statement that Bob made introducing John Malone. He said, “Smartest son-of-a-bitch I ever met in my life and so I hired him.”
DITTRICK: And he was.
KELLER: And he still is. It was a shame when we lost Bob; he was great. When did you become chairman?
DITTRICK: I think ’79, maybe two years, ’79-’81.
KELLER: It was an interesting time in the development of cable in those times. The FCC had released a study called the Second Report and Order which followed the First Report and Order which had primarily to do with microwave served systems. The Second Report and Order said that the FCC probably should take cable television under its arm and regulate it in some way, it didn’t know how, and then during the time that you were chairman they started to formulate their own opinions of how cable should be regulated. Do you remember anything about that?
DITTRICK: You’re testing me now, but yes, some of it. I think a lot was shaped by our people in Washington and the attorneys who have always been very active. We’ve always had a cadre of attorneys who were very close to us who helped and obviously were retained by various independent firms, but there were five or six of those fellows who helped us read the tea leaves, if you will, as to what was going on there. The other thing was our trade association president – Bob Schmidt had been there and then we hired Tom Wheeler, and Tom was a pretty good politically attuned guy and knew what was happening in the leadership of the Congress and what they wanted to do, and the FCC, and so I think had us pretty well geared at the association level that this was coming, it was inevitable, we were getting much larger, much bigger, we no longer could claim to be the little guy on the street and that we were going to have regulation of some kind. So it was a lot of discussion in the industry because a lot of people didn’t want any, thought we should stay unfettered by any rules and regulations by anybody other than the franchise that we would have with the municipality.
KELLER: Was this controversy evident on the board?
DITTRICK: Yeah, yeah, we had a lot of differing views. You’ve got to remember that the board had a couple… maybe half the people were what I would call corporate people and the other half were pure entrepreneurs, people you and I looked up to in those days and hadn’t had any corporate life. I’d had ten years at GE so I had a little corporate discipline, if you will, but I was coming in new and finding my peers who were true entrepreneurs, God bless’em, and didn’t want to be held back by anybody. So there were a lot who said we can’t do this, we can’t give up any of these rights, we shouldn’t be subjected to any rules or regulations. The staff was saying that’s not realistic, you’re going to get regulated and you need to try to negotiate now as to how those regulations will appear. There was a famous debate in the early ’60s where the association had dealt with Senator Pastore who was the Democratic chairman of the telecommunications committee, and we had gone back on an agreement with Senator Pastore that we would help and support a bill of some type. I don’t remember, quite frankly, what it was.
KELLER: And it was just that controversy, even then, and that was in 1960, even then that got the industry to renege on Pastore and we made a real enemy at that time.
DITTRICK: And we did and he was still there and very powerful, and had made our life very miserable as an industry. That was one of the things sitting there – you can’t go back on your word when you deal with the leaders in the Congress. So it ended up that most of us felt we should work out some accommodation so that at least if we were going to be regulated we participated in setting how those regulations might be, and I think we were able to do that.
KELLER: I think so. Remember, at that time also – and please, correct me if I’m wrong – at that time we had two very powerful lobbies opposed to us. One was the telephone company lobby, primarily AT&T at the time, and also then the broadcasters and the National Association of Broadcasters. Later on, the movie industry was opposed also, but primarily at that time, as I recall, the broadcasters and the telephone companies, both of whom were regulated by the FCC so those guys were really walking a tightrope at that time.
DITTRICK: They wanted us to get under the same umbrella they were and they were much larger and much more powerful than we were. We were obviously gaining in size and import in the telecommunications field but you’ve got to remember our comparative size with, as you said, the telephone industry as led by AT&T before the breakup – and we saw that when we were doing our pole negotiations with them. I still remember my first pole contract as an example of the size and power of those companies. I was with General Electric Company, I thought a fair-size company, we got a franchise in the Schenectady market, and I went to the New York Telephone, a subsidiary of the AT&T office in Albany and at least met with the vice-president of the operation. I’m a 33-year-old youngster, maybe wet behind my ears to them, and met with this senior guy and talked about General Electric wanting to sign a pole attachment agreement and that the document that had been given to me by the representative was not fair, didn’t make any sense, and General Electric…
KELLER: Was it a leaseback arrangement that they offered you at that time?
DITTRICK: No, it was straight pole attachment. It made no sense and my attorneys told me it was a one-way agreement and it would be very difficult for General Electric to sign that. This fellow who was a senior guy said, “Son, let me tell you how it is.”
KELLER: That’s just how they approached it.
DITTRICK: So he leaned forward and said, “Here’s what you can do. You can dot the “i” in your name or you can cross the “t” in your name and you have total flexibility as to what you want to do in dotting the i’s and crossing the t’s and that’s all, and if you want that attachment agreement you will sign that and that’s it.”
KELLER: Do you remember some of the provisions? Some of the onerous ones at that time?
DITTRICK: The onerous things were they had total right to throw us off at any point in time, we could not recover any of the costs involved, they could move our lines at any time and charge us unilaterally whatever they wanted, we had no rights at all.
KELLER: How about rearrangements?
DITTRICK: We would pay for all rearrangements.
KELLER: That could rebuild their plant.
DITTRICK: There was a whole list of things, and yes, if they had to change out a pole we’d pay the entire cost of the change out, forgetting if they were going from a 24-foot to a 40-footer we’d pay the entire cost of it. It wasn’t “fair”.
KELLER: Did you sign it?
DITTRICK: We did. Went back, told our lawyers, and the practical thing was that was the contract. You literally didn’t change a single word, and that taught me something about the size and power of the telecommunications company, in that case AT&T.
KELLER: Do you remember what the rearrangement costs were in San Francisco per 100 miles basis?
DITTRICK: No, but they would be extensive because as you remember that San Francisco plant was something to see and very small space. Even back in 1968 dollars or ’72 dollars, they would have been horrendous.
KELLER: It was. $10,000 a mile in some areas of San Francisco. You probably remember that, too.
DITTRICK: Which in those days we were talking $5,000 a mile built plant, everything.
KELLER: Especially if we had to go underground. After that you became, or maybe before you were chairman you became chairman of the utilities relations committee, and that was involved primarily with the telephone companies trying to change some of those onerous regulations that they had. Do you remember any of those situations?
DITTRICK: No, it was a learning process for me. Ben Conroy was our chair and Bud Hostetter, who I think is one of the brightest guys around, was on the committee, and myself and Jay Ricks was our outside counsel retain. I apologize to whomever if there was another member of the committee, but I remember dealing with them and just watching Ben and Bud and Jay work was fascinating. Even though we were treated somewhat with disdain, we were having these discussions because the FCC told them to have them with us, but the AT&T people really wanted nothing to do with it and I never felt we were making a great deal of progress. This is before we had a bill which…we finally got the Congress to pass a bill which said we have rights to get on those poles if we’d pay a fair price.
KELLER: But they would set the price.
DITTRICK: Yes. And we had a range of prices. Back then the normal price might have been $2.00 or $2.50 a pole.
KELLER: And they were asking $5.00, $6.00 and up to as high as $20.
DITTRICK: A couple of maybe even AT&T companies might have been $6.00 which we thought was terrible and we bled all over for that. Some independent phone companies were charging $10 and $12. If you remember, this is back in the early ’70s and you obviously at that point didn’t have a lot of choice although some independent entrepreneurs would end up going out and put up 20-foot sticks of their own, but not many did that and it got very difficult. So you would try to work with telephone and power although often telephone was given the lead to negotiate for the power company. Both firms owned poles and they switched back and forth. But the negotiations were long and a lot of intellectual arguments and we had a dialogue going, I think. But it was Ben and Bud who were really good at that and I always said boy, I’d like to chair this committee. This is powerful. It was interesting to see it work. I never felt we made a lot of headway and they didn’t feel they had to give up much.
KELLER: Do you remember when they decided they were not going to let us on the pole at all and they were only going to leaseback the system to us?
DITTRICK: That came out for awhile and some of the companies, I think, operated independently in that area because some of the subsidiaries really pushed the leasebacks. I remember Ohio was one of them. Ohio Bell really pushed to offer leasebacks and would put up what I would call straw companies to do this in place of the bona fide cable companies.
KELLER: They were disasters. Those that did sign those agreements were just disasters and finally eventually did buy them back from the cable after the telephone company was forced out.
DITTRICK: The telephone company when they were doing those leasebacks would provide all the maintenance and everything else and they didn’t have people who were trained in video and you obviously were working far down their priority list so you didn’t get very good treatment. What it did do was permitted non-capitalized companies who were doing what I call political ploys into the business gave them instant start-up, but the phone companies provided all the credit and none of the what I call mainstream cable companies did it.
KELLER: Did you ever sign a leaseback agreement with them?
DITTRICK: No.
KELLER: Do you remember any of the companies that did?
DITTRICK: No. Not with favor, they weren’t my close friends.
KELLER: You were chairman, then, of the NCTA sometime later in ’69 and ’70…
DITTRICK: I think ’79 and ’80.
KELLER: ’79 and ’80, okay. By that time most of those problems were pretty well ironed out because of the federal regulation of the two of them.
DITTRICK: Yes.
KELLER: As the 1982 Cable Act developed were you pleased with the way it came out?
DITTRICK: I really think that cable had grown to a certain point where we were going to be subject to some regulation and therefore I thought it was important that somehow we try to work with whatever we had. If we didn’t we just weren’t going to get very far ahead and I felt that that wouldn’t be to our benefit. I think anytime you subject yourself to somebody else’s rules and regulations you’re not going to be happy, so there was frustration but at the time I thought it made sense. I think we were still fighting, if you remember in those days, all the copyright questions which probably the original Pastore break-up was over copyright. So we always had that coming in and going out and nagging at us as to whether we had some liability to copyright, whether we had rights to the product and whether our retransmission argument was valid or not.
KELLER: Not retransmission, we were just an antenna service.
DITTRICK: The antenna service, and whether we bastardized that, if you will, when we started adding signals and we started doing more, we weren’t different than anyone else. We took a little step here and if you didn’t get slapped then you’d take a little more. So through the ’70s and ’80s we were constantly testing things and moving forward, taking a little more of the bite of the apple, and as we got larger and larger we were able to take bigger bites. Pretty soon the original arguments that we had with the AT&T companies that we were the flea on the nap on the elephant… whatever, and if the elephant, AT&T, rolled over we were dead. Pretty soon, not pretty soon but it took a long time, we got much larger and the same with the other group you talked about, the broadcasters. All of the sudden the broadcasters picture was being delivered to 75% of their market through a cable and they didn’t control the cable, and we were sitting there as the editor and publisher, if you will, of that.
KELLER: But we never admit that.
DITTRICK: No, we didn’t admit that publicly, but we were. When we were at ATC, when you and I were there, if you remember, our original talk about cable franchises and the reason we wanted to get those was that we would ultimately be the toll road that went into every home and that if we were the “toll road” with the implied fact that there are toll stations along the way, we would have some source of income as product flowed down that toll road. The toll road being the coaxial cable.
KELLER: That argument developed later on with the advent of the converter because we always insisted – at least the industry did and everything I was associated with – that we own that converter rather than have it sold through RadioShack or someplace else because we wanted ownership of that.
DITTRICK: And that’s been argued about lately where they don’t. While I’ve been away for awhile, I don’t think many of the companies insist on that.
KELLER: I understand that they don’t.
DITTRICK: You can buy a converter somewhere else. It might be difficult for you to use, but you’re right. That was one thing we always insisted on because we wanted to control that conduit to it.
KELLER: And the same way with the telephone company. They wanted to control that entrance into the house. In fact, as I recall in their program with the leaseback, they could own everything up to the input into the house, to wherever that cable went into the house. After that you were on your own.
DITTRICK: I believe that’s correct.
KELLER: They wanted that input of the cable into the house.
DITTRICK: You remember in those days we always talked about the two cable thing into the home and what was the purpose of two communications cable and one power cable, and you could always rationalize that one power cable probably made sense but you had trouble saying two communication cables. So the ultimate marriage of the video that we’ve always sold in the telecommunications and the telephony system have tried to merge. They’re still in that process and it doesn’t quite work but it continues.
KELLER: That Armstrong is finding out at AT&T Cable.
DITTRICK: And as I think our cable companies are finding out as they try to get into telephony.
KELLER: That wasn’t until the ’92 Act that permitted… we had in early ’72 the First Report and Order, the ’84 which finally first regulated the entire industry, the ’92 which deregulated the industry, and the ’96 was re-regged again.
DITTRICK: You’ve got a good grasp of these rules and orders. I should call you.
KELLER: I can’t go into detail on a lot of them but I do look occasionally when these things did happen and I remember particularly about the ’92 because that was right after the ’91 recession when the industry was really in bad shape at that time and everybody was really concerned about what was going to happen with the ’92 Act. Turned out it didn’t hurt at all and in fact it helped. I think John Malone recognized that more than anyone else and was buying out all the limited partnerships and everything else he could at some small amount on the dollar, and got into a lot of lawsuits involved with that too. As chairman, what did you think were your major contributions to the industry, as chairman of the NCTA?
DITTRICK: Surviving maybe. You’re going back 20 years and I don’t remember everything. I remember some of the fun things. We had – and I forget why I even served the second year but it was unique because normally you had one term and I think Marty Malarkey who served in the early ’50s had two terms and I did, and that was it.
KELLER: Jerry Lindauer, I think, had a number of terms.
DITTRICK: Did he? All right. We were there when Ted Turner came into the business and Ted in Ted’s own way…
KELLER: Tell us about your recollections of Ted and his entrance into the business.
DITTRICK: Ted’s a character. I’ve always respected Ted because what he did was with his own money and many of us who were corporate officers, ran companies, we were shareholders, we might have had large stakes but in the public companies you’re a trustee, if you will, of other’s monies. Ted did all his stuff with his own money so I always respected him for that. He wasn’t flying around in his big airplane that the shareholders paid for but he would do it in his own. Ted was unique. All the stories you’ve heard about Ted are probably toned down and they’re even more so than he is. He came to the board and addressed the board in ’80 or ’81; he was wanting to get into the business and he was talking about putting up his WTBS on the satellite which was relatively new. We had been doing some work in the industry in those days with a cable satellite access consortium. He was telling us about what that was and why we were all going to carry his product and I remember telling him in front of the board that he’d better get his ads… he was then running television ads telling the people reading these ads should call their cable company to put WTBS on, and I remember telling him in front of the board, that’s a no-no. You don’t want to blackjack us into doing this.
KELLER: What’d he say?
DITTRICK: He said okay.
KELLER: He did?
DITTRICK: I think so. He was very nice in those days. I remember another one from those days, a cocktail party when he asked me if he should pay somebody a million dollars, which hadn’t been done, for a pitcher. He had just bought the Atlanta Braves and he was at an NCTA meeting or something and we had a cocktail party and he’s asking me – and I don’t think he knew what a third baseman did – but he’s asking if he should pay a million dollars to so-and-so in order to be a pitcher.
KELLER: Was it Maddox?
DITTRICK: It might have been. Whoever he bought in 1980 was the first million dollar pitcher. There’s lots of stories. One of the vendors had a private hunting party down in Stuttgart, Arkansas, and I’m not a hunter but Henry Harris and I went down and Ted went down, and there were a number of other people, non-cable people, and we spent four days in this quiet, sleepy area of Arkansas hunting birds which meant you got up every morning at 4:30 to go out in the blinds. Both Henry and Ted were good marksmen. I’d just go out because you’d have a glass of brandy or something. You’d be sipping brandy out there and you were out in the blind from 4:30 to 6:30 and then you’d come in and they’d feed you and you’d tell stories all day or watch videos. Ted was a character and we did this when Ted went through his 40th birthday. So for Ted to be out with a group of 20 guys on his birthday was not really what Ted liked to do. Ted liked more of a mixed company to be with.
KELLER: Understatement of the year.
DITTRICK: He could hardly wait to get out of Stuttgart, Arkansas and get back to Atlanta. But Ted was a unique guy and a lot of fun, and obviously he’s done very well which he should have.
KELLER: He finally sold his interests in AOL Time Warner and came out pretty well in that whole thing.
DITTRICK: Yes, Ted’s done well and I guess is the largest single landowner in the west probably, with his ranches… God bless him.
KELLER: New Mexico and Montana.
DITTRICK: I’d hate to see his alimony bills though. He’s probably got great alimony bills.
KELLER: Probably the only one who had more was Bill Daniels. (LAUGHTER)
DITTRICK: He might have. Bill probably had more but Ted had a unique collection of pilots and limo drivers and…
KELLER: And race boats.
DITTRICK: And race boats and marketing representatives. He was unique. I remember another story which I probably shouldn’t tell but while I was chairman of the association we went to the West Virginia Association which was, as you know, it and Oregon alternately claimed to be the source of where we began, or Pennsylvania, but many of the old pioneers were there and I went down as chairman of the NCTA with my wife and Jay Ricks who was representing us on the pole thing at that point and was going to talk to the group about what we were doing in pole line negotiations and I was reporting on the industry. They brought Ted in to do the after dinner speech and Ted was vintage Ted. He was up telling the group of 200 of our salt of the earth, if you will, operators about Leave It to Beaver and the American institution and apple pie and Chevrolets and all those things which we hold near and dear and the family values and… well, Jay and his wife and I and my wife and his public relations director were sitting at the back table, his public relations director being 28, voluptuous, extremely attractive. But Ted was railing on about family values and all as only Ted could and you just chuckled and said, “That’s Ted.”
KELLER: That’s Ted. And as Ted developed in the business he formed… first of all, he put WTBS on, it was the first station on the satellite. That was after HBO had gone onto the satellite.
DITTRICK: Yes.
KELLER: Were you at ATC when they put the satellite and HBO on in Jackson, Mississippi?
DITTRICK: I had left. I think we had a cable satellite access entity that we all participated in, including Home Box Office, if you remember that. I want to say Catherine Creech was from NCTA or something I think headed that group. But all the major companies put up money, we funded a study to find out about satellite distribution of cable signals.
KELLER: That had to be what? ’73, ’74?
DITTRICK: Probably. I’m not sure of the time. I probably left Denver in ’73, so I must have been there at Viacom. But it was Time Inc. that picked up that thing and said we’re going to go do this, and they put HBO up and as you said it was Jackson, Mississippi for ATC and Bob Rosencrans’ system in Vero Beach, I think were the first two systems that got a satellite feed. Then HBO just went ahead and full blown developed the satellite feeds and the microwave company from Oklahoma, Roy Bliss and Ed… I can’t think of his…
KELLER: Drake?
DITTRICK: Not Drake, but Drake was out there. Ed (editor’s note, Ed Taylor) – I can’t think of his name now – put together the microwave company that put up TBS. Obviously Ted helped fund that company.
KELLER: But that was distribution by microwave. Wasn’t it before…?
DITTRICK: It was before but then they put up the satellite which took TBS and so that’s how he got TBS up after HBO had done there’s. It was the major change, I think, as far as signal distribution.
KELLER: The industry changed.
DITTRICK: Yes. Before we had moved by microwave, either common carrier or local microwave, those distant signals around that were nearest and most proximate so that you could see New York, LA, Chicago, all the signal just went around the nearest areas whatever the independent stations were. Well, all of the sudden, TBS from Atlanta was seen in Seattle, was seen in Santa Cruz, was seen in Sitka, Alaska, so it really made our arguments about broadcast television and cable not being there and not having an obligation for these signals when that broadcaster was taking that product which was in that case syndicated product, showing it in a market where another station had allegedly bought exclusivity to that product, our argument started getting a little more difficult to hold.
KELLER: That’s when the FCC stepped in and said what signals you could import and those that you could not.
DITTRICK: Yes.
KELLER: And the satellite distribution of so-called super stations like WGN in Chicago and Ted Turner in Atlanta were very tenuous at that point. We didn’t know whether we were going to have them or not. Do you remember? You were with Viacom at the time.
DITTRICK: Yes.
KELLER: Were they in broadcasting at that time also?
DITTRICK: No.
KELLER: That was before they got into it?
DITTRICK: Yeah. At the end of my time with them they acquired a broadcasting property but before that it had just been in… and of course they were then very interested because they were selling syndicated product so they were very much involved in that syndicated market and worried about how they were telling the station in Portland, Oregon buying their product of Gomer Pyle or something why all of the sudden Gomer Pyle was coming in on the cable system in Portland, Oregon over WTBS. They had some upset clients.
KELLER: Were you ever involved in negotiations with the movie business, Jack Valenti specifically?
DITTRICK: No. Jack Valenti is probably the most articulate 5 ft. 5 guy you’ll ever meet. I’ve heard him speak on a number of occasions. He was an adversary you just didn’t need. The reason he got that job then was, I believe, his relationship with Lyndon Johnson and of course we had some ties to Lyndon Johnson. But Jack Valenti had done some work…
KELLER: Through a guy by the name of George Morrell. Do you remember George?
DITTRICK: Sure, I remember George. George would show up at the cable shows and would be the mysterious figure in the background. The limo would bring him into the back of the room, he’d steal a look at some things, and he’d be gone before you even knew that the famous George Morrell was there.
KELLER: And would not fly.
DITTRICK: He was very hidden.
KELLER: Mid-west Video.
DITTRICK: Jack Valenti was the most articulate, is today, the most articulate guy and you’ll have the best cause and be the most responsible person and when he’s done with you, you wonder why you’re there.
KELLER: Exactly. I’ve heard him speak a number of times.
DITTRICK: He is very gifted with the use of the word.
KELLER: I hate to have negotiated with him.
DITTRICK: Very tough.
KELLER: But he finally recognized, it took him a long time, but he finally recognized though that the industry was going to be a great boon to the movie business.
DITTRICK: Yes.
KELLER: And that when they had all this product what were they going to do with it, and he finally came around. He became a friend and just turned around completely as I think you realize. What happened when you formed Douglas Communications and why did you form Douglas Communications? You went through the process twice.
DITTRICK: Yes, I did. I’d been at Viacom, I served as trade association president, Ralph and I had some differences of opinion about what we should do in cable and it became apparent that I ought to move on.
KELLER: Do you know what those differences were? Do you remember those? If you can talk about them. They weren’t personal, I don’t think, were they?
DITTRICK: I probably remember them.
KELLER: If they were personal we don’t have to bring them up.
DITTRICK: They’re not personal, but I was a very strong believer in cable and Ralph, who came out of the syndication business, I don’t think was quite as strong in the belief. We had some specific differences about a franchise we acquired in Salem, Oregon which I thought would be excellent. He wasn’t sure about that and I might have said something rash like “I’ll leave and take the franchise as my payment. You can forget all the options.”
KELLER: And you did?
DITTRICK: No, but I said that in front of the board, I think, which probably wasn’t appropriate. Ralph and I probably talked a month later and I decided it was time for me to move on. But I think at that point John Saeman again introduced me to some people.
KELLER: John was a broker at that time?
DITTRICK: John was running the Daniels efforts, I think, and been a friend of mine through the years and introduced me to some venture people from Bank of America. Some of these banks obviously are no longer what they were, but Bank of America, First National Bank of Chicago, and Citicorp, and they had very active venture groups in those days and three of them happened to feel they wanted to get in the cable business and so John said to them he knew somebody who might be interested. So that was the start of Douglas Cable Communications. I left Viacom and we bought some systems. The first systems we bought, if you remember Jerry Green, he was called in a plane crash up at Westchester and so the systems he had up in the Glens Falls systems were for sale, and Burt Harris was representing Jerry’s estate and I think Leonard Tow was interested in acquiring those systems and I was for this company.
KELLER: Which didn’t have any operations at all at that time?
DITTRICK: My company had no operations, right. Just my venture guys behind me and myself.
KELLER: And out looking for opportunities.
DITTRICK: Yes, and through the help, if you will, of Burt Harris and Leonard Tow I was able to buy those systems. Burt thought it would be appropriate and Leonard agreed that Douglas (myself) was trying to get started in the business and here were some classic systems – in fact, Jerry had called them Classic Cable – and they were a classic cable system. Leonard had already gotten his Century thing started and was quite large and he said, “You’re right. Let Doug take those.”
KELLER: Nobody wanted them.
DITTRICK: Probably, and Burt said it would be totally appropriate for you to do that and so that was the first systems we acquired in Douglas.
KELLER: And where were they?
DITTRICK: Up in the Glens Falls area.
KELLER: They weren’t the ones out in Kansas?
DITTRICK: No. So that was the start of Douglas and we build that up, bought some systems in Tennessee. Jerry Marnell also came with me. We had a small office. I went from the big Rosewood office in New York City with a large salary to doing my own entrepreneurial thing wondering who pays the checks. It’s amazing when you leave a big company and go out on your own and things like where’s that paycheck that comes every two weeks or every month or whatever, and you’ve got to write it and you can’t write it if you don’t put money in an account, and all of the sudden it all tied together from the corporate life.
KELLER: You said before that you offered to leave Viacom with the Salem system and forgo all your options, but did you bring your options with you at that time?
DITTRICK: No, Ralph decided that they wanted to build Salem and he decided that probably I didn’t need to stay at Viacom for him to do that.
KELLER: But did you take your options with you at that time?
DITTRICK: Ralph was very generous with me and fair and settled out everything.
KELLER: So at least you had some kind of a basis.
DITTRICK: I had some cash and was able to invest with the banking group. But no, my departure from there, Ralph was very much a gentleman. Not that I enjoyed leaving my nice posh setting.
KELLER: Well, no one ever likes to do that, but…
DITTRICK: It was appropriate; it was timely.
KELLER: And of course it made the big difference for you.
DITTRICK: Yes, it did.
KELLER: How large did Douglas get at the time?
DITTRICK: We got up to about 45,000-50,000 subscribers in about 2 ½ years. We got to the point where if you remember the prime rate was 19% or 20%…
KELLER: In ’81.
DITTRICK: So my debt was paying 20+ per cent interest, and I got very nervous. The venture guys said don’t worry, we can get through that, but we had an opportunity to sell those because again along comes John Saeman and another one of his clients, the Tribune Company wanted to get bigger in cable. They’d bought a couple defensive systems – they’re based in Chicago, as you know – and they’d bought some systems in California and bought some systems in northern Michigan.
KELLER: When you said defensive what did you mean by that?
DITTRICK: Ward Quall who was president of Tribune had his summer camp in Haughton, Michigan and wanted the cable system up there. That wasn’t very defensive. Why they acquired in Lancaster, Palmdale I don’t know other than somebody sold it to them and it was a very small thing on their horizon.
KELLER: They got to be big systems though.
DITTRICK: They did.
KELLER: Edwards Air Force Base out there, and they did very well.
DITTRICK: That’s correct. But they decided that they were going to make cable something real and so they went to Saeman who’d been their broker and again John says well, I know this guy, and maybe it’s time for him to merge his thing. So we merged Douglas into Tribune Cable, I kept an ownership position and became a Tribune Company person – again, the normal five year cycle.
KELLER: You stayed with them five years?
DITTRICK: Five years. I must have some problem that people don’t like me after five years.
KELLER: Then you sold some of those systems?
DITTRICK: Then what happened was we got active in the franchises in those days again. We came back to that thing of franchises and we won Montgomery County and we built it.
KELLER: Where? Maryland?
DITTRICK: Maryland. And the county around Detroit.
KELLER: Wayne?
DITTRICK: Not Wayne, but they’re an affluent county. I had told Tribune that we could win one out of three of these major franchises we were in and those were the three – the one in Maryland, the one in Michigan, and Sacramento, the famous Sacramento franchise in California.
KELLER: You were involved in that?
DITTRICK: Yes.
KELLER: I want to go into some detail on that too.
DITTRICK: Not too much, please!
KELLER: You didn’t promise the trees, though, did you?
DITTRICK: I’m the tree guy.
KELLER: You’re the tree guy!
DITTRICK: 20,000 trees. Amos castigated me for that but he was giving away fire stations and I like trees. I thought because Tribune was new and I was the only “cable” person, and while Tribune had a large wallet we needed more of a cable presence so I got Tribune to align themselves with United Cable and Gene Schneider. Gene was – I don’t know how many subscribers he had, but had been around the cable business for a long time.
KELLER: Was this when he had GenCo? It was General Oil company or after that?
DITTRICK: No, no, this is United Cable.
KELLER: United Cable, okay.
DITTRICK: He was based in Denver and we went ahead and came up with a 50/50 partnership arrangement and lo and behold we won all three franchises.
KELLER: Did you do the actual franchising?
DITTRICK: I did a lot of it. Mike Pole had joined me and Mike was a bright guy and he did a lot. A fellow by the name of Barry Elson was doing it for Gene, and we did these three franchises and they were falling at different time but toward the end when we won all these franchises it was determined that we had a billion dollar build and Tribune said that they weren’t into… Tribune had just spent 505 million dollars to acquire WTLA, or XLA, or whatever the LA independent was that they acquired. So they’d just spent a large sum of money for that LA system. There were questions about would we have to divest of some of those Antelope Valley systems we talked about, and that capital amount going then made them nervous about cable which was still a smaller arm but all of the sudden talking a major dollar amount. This was going on while Sacramento was being determined so we split up and Tribune took the Montgomery County and United Cable took the Michigan property and we went our separate ways and built those.
KELLER: And you stayed with Sacrament?
DITTRICK: Yes. In the meantime, we had the continuing joint venture.
KELLER: Now this was you, personally?
DITTRICK: No, this is Tribune – I’m sorry – Tribune and United stayed there because we had made the filing and we were going to see that through, and we did commit as part of our thing we were going to plant 20,000 trees. I believe it was 20,000 trees. Obviously this is one Mike Pole from our company and Barry Elson from United had been working on, and we had a local group and some consultants and all. But we did pledge to put in 20,000 trees in various areas around Sacramento. I received some criticism for that but…
KELLER: I would say more than your share.
DITTRICK: My friend Hostetter was pledging two or three fire stations so I didn’t know that my trees were worse than his fire stations. So that didn’t bother me.
KELLER: Bud Hostetter being the chairman of Continental at that time, Continental Cablevision.
DITTRICK: That’s right, and one of the better cable companies, but sometimes Bud might be a little holier than thou and he didn’t need to be. But that proceeded and they came down with a franchise that on ultimate review we found unacceptable to sign. So that was the conclusion of our franchising effort and we did not accept the franchise in Sacramento that was offered.
KELLER: And then, as I recall, and tell me again if I’m wrong, Sacramento was split up between two or more companies, wasn’t it?
DITTRICK: I think so, and it took another couple of years to determine what they were…
KELLER: One was the McClatchy’s, wasn’t it?
DITTRICK: It might have been. They were based out there. I really don’t remember. Once Tribune decided they didn’t want to do that I had to determine whether I was going to stick around or not, and Tribune in essence said maybe we shouldn’t be in the cable business so we ought to sell Tribune Cable. I was a minority owner and Tribune had also been very fair to me and very good to me. So the first thing we tried to do we had about 300,000 subscribers and I tried to see if there wasn’t some way we could do a leveraged buyout and have the management buy the company and have support from some other people who I could have. Tribune ultimately decided they did not want to do that. They didn’t think it was appropriate for me to do that. So I was kind of divorced from the operations for about six months and a good associate, Jim Cavanaugh, really kind of ran the company while I had to sit on the sidelines since I’d committed myself.
KELLER: Now they separated the sale of the properties, didn’t they?
DITTRICK: They did. We sold to different people.
KELLER: Jones bought the Michigan properties in northern Michigan.
DITTRICK: Yes. Gus Hauser bought the Maryland property. I forget who bought Cleveland.
KELLER: Cox did, didn’t they?
DITTRICK: Yes, yes. Yes, different people bought the different systems and so we just moved on and I left Tribune and formed Douglas Communications II.
KELLER: Reformed.
DITTRICK: Reformed, and it was just easy. I could use the same stationary and just stamp Roman Numeral II. And what we did was Jim Cavanaugh stayed with me as did Jerry Marnell and we ended up buying some systems, a lot of very small systems in the Midwest from Bob Weary and Bud Weir, about 28,000 subscribers and we worked those for…
KELLER: Spread out all over?
DITTRICK: Spread all over, very small, 50 to if we had 400 subscribers we thought we were in high cotton. But it covered a lot of ground through four or five states in the Midwest and we bought some other systems to go with it, but again, staying in the small system venue.
KELLER: What was your rationale for that? They were classic markets, you didn’t have to do much?
DITTRICK: Classic markets, didn’t do much, the selling price was still in the 1,000-1,100 dollar range and the big cities were going to 2,000, 2,500, 2,800 dollars a subscriber and I had limited capital. Again, I had some venture money with me helping do this but I just thought those little systems could be done, put together and the composite would be true. As I look back I’m probably wrong. The price has stayed relatively low where the major complexes became these major cities and urban area complexes, but we worked it for four or five years and then broke that up, sold that to numerous…
KELLER: Did Reves run those systems for you out there?
DITTRICK: Reves did a lot out in the Midwest, yes.
KELLER: I remember him from Lakewood, California when he was down there. We bought that one. Who did you sell the systems in Kansas to?
DITTRICK: We sold them to various rural co-ops. We sold them to Ken Anderson, he bought a number of them through telephone co-ops, we sold them to the fellows down in Missouri who I’m drawing a blank on now and I shouldn’t, who bought some of the systems.
KELLER: From Warrensburg?
DITTRICK: They had Warrensburg and they had a Kingaire that they flew.
KELLER: I can’t remember their name either. I should know it though.
DITTRICK: I’ll think of it probably and I’m embarrassed that if he sees this tape he’ll throw something at me. We sold them to different buyers and took maybe six months to break them up.
KELLER: Did Saeman sell these again?
DITTRICK: Yeah, different people, and John has been a friend, continues to be a friend. We have a group of us – that’s another story – but a group of us who have stayed together through 25-30 years.
KELLER: Give us the names – that’s an interesting group. I know your primary passion is golf.
DITTRICK: Well, we enjoy golf, all of us do, but it includes Jack Crosby who you mentioned earlier, Bob Hughes, Jay O’Neill who’s living out in Crested Butte who worked back in those early days with Walter Jenkins and some other names, Allan Harmon was with our group and as you know Allan died about three or four years ago and we miss him, but he was with our group. Jim Fitzgerald from Jamesville, Wisconsin who had some systems up there and also owned the Milwaukee Bucks, then he owned the Golden State Warriors who he sold to another group. Let’s see, Jay Ricks, an attorney out of Washington D.C.
KELLER: I want to go into your association with Jay, if you will, but let’s stay with this for now.
DITTRICK: So who’ve we got? Is that eight of us and myself? I think so. We’ve been together for 25 years and we play golf a lot together. We’ll do four or five trips a year. We used to do this on weekends when we were all poor and working. Now we do it in the middle of the week and most of the group have their own aircraft so we all fly into wherever we’re playing. We were just able to play down at Augusta National at the Honors Course.
KELLER: Who got you down there?
DITTRICK: Cliff Curtland was one of our sponsors from Cox days, if you remember Cliff. So we’ve been together for a long time. I started playing with Jack and Bob when they had their cable company out of Del Rio, Texas and they had what they called the Austin-Del Rio tournament and I got invited to it. I’m not sure why because it was mostly their guys and all the people that worked with them, and it just gradually grew. 20 years ago we were up to 16 and it included all the people in the cable business we just talked about – Bobby Rosencrans, Gene Schneider, Bob Schmidt. We never got Jack Gault into it, but we had an awful lot of people come and go. Jack Frazee. Henry Harris. So we had…
KELLER: Who wins all the money with that group?
DITTRICK: We try to move it around although John Saeman and Jay O’Neill are probably our best two players, and in Allan’s absence we’ve got a country western singer, Larry Gatlin has now joined us. So Larry’s the young guy, Jack and Jim are now 75 and they’re our senior citizens and Larry’s our youngest, probably our best player.
KELLER: He’s got to be 50 or 60 now, isn’t he?
DITTRICK: 52. But Saeman and Bob Hughes is good. They’re all fun and we have a lot of fun together. We’ve been through everything between weddings and births and grandchildren and unfortunately the death of a good friend.
KELLER: Do you still keep in touch with Allan’s family, Allan Harmon?
DITTRICK: Yes.
KELLER: Allan was with us when I first joined Daniels years ago so I knew him very well and I miss him also. He was quite a guy.
DITTRICK: Yep, he was, and he was a spin-off of Bill Daniels. I know all four of his wives and we stay close to Judy who was his wife at his death and Maggie, Sydney.
KELLER: I knew Sydney better than any of them.
DITTRICK: They were good times. That was the days when Denver was everything in cable and we were all out there.
KELLER: Now you had a long-term relationship with Ricks, with Jack Ricks. He was your attorney to start with, wasn’t he?
DITTRICK: I met him and worked with him as he was representing the pole committee and then he was the outside counsel I think for TelePrompTer for a lot of their work and Jack Kent Cooke and others. But each of those people – Jack Cole was one who was well-known, Jack Matthews, there was a whole string of them.
KELLER: All Washington attorneys.
DITTRICK: Yes, and Washington attorneys who represented the various cable enterprises, represented broadcasters and did a lot to pull us all around, Jack Cole being one of the pure cable lawyers, if you will.
KELLER: He formed his firm on that business.
DITTRICK: That’s right, and probably Strat Smith and that group.
KELLER: Smith and Pepper at that time.
DITTRICK: Yes, and I think that’s where Jack started but I’m not sure. So anyway, I got to be good friends with Jay and he is probably my best friend today and we did not use him at ATC because Monty had separate counsel. But when I formed my other deals I always asked Jay to represent me which he did and through the various negotiations with people and my partners in the various Douglas enterprises and of course then Hogan and Hartson represented us. In fact, my daughter went through law school and communications law and she worked at Hogan for a couple of years. But Jay ends up as my partner in business, Douglas II which is still in existence. Jay owns a piece of that and so that keeps he and I busy. He’s now retired from the practice of law, living primarily in Florida but has a home in Virginia also and so we see a great deal of each other and are working together.
KELLER: Now Douglas Communications today is not in the operating business. You are currently, as I believe I heard, in the consulting business, marketing consulting for cable systems.
DITTRICK: That’s correct, and I would be happy to work for you if you’ve got a job. For $100 you can hold my interest for a long period of time. We’re actively looking.
KELLER: And you’re building golf courses.
DITTRICK: And we’re trying to do whatever. As we were in Douglas II and we were doing our operations, Mike Pole was with me and Mike’s a very entrepreneurial fellow and he got us a relationship established with General Telephone who was trying to get established in cable and wanting to do some things in Ventura County in California and in the St. Petersburg area down in the Tampa/St. Pete market, and so Mike arranged that we would consult with them as they developed their cable operation and this is six or seven years ago. It’s been a long time. In that process, one of the things they want to do is have some direct marketing effort, and so we formed a direct marketing company and a fellow by the name of Rusty Cox, who had worked with a number of us as we did a telephone business in Las Vegas, that crew I mentioned earlier of Saeman and Hughes and Fitz and all…
KELLER: You weren’t involved with the… was it Greenstein, Greenburg?
DITTRICK: No, that was Hughes who did that, but we were involved in buying a telephone operation that provided telephone service and long distance service to the hotels in Las Vegas and we ended up selling that and that went through a couple gyrations but became WorldCom so now WorldCom bought that. But one of the fellows who was running that doing the actual day-to-day sales was a fellow by the name of Rusty Cox. So we got Rusty to come and work for us and we formed Douglas Marketing, or Douglas II, it depends on what we need to do, and Rusty is very adept at that, has a number of people. He’s been doing this for 20 years and so he knows people all over the country. So we for the last five years have been actively selling, putting together direct sales teams to work for whoever. We are doing some work for Adelphia now. We have worked for Qwest and US West and of course GTE, Verizon. Have gun, will travel.
KELLER: There’s one major question that’s on my mind and you don’t have to answer it if you don’t want to because I don’t know what the answer is, but when we were both at ATC, and I was with them longer than you were, but I always had the feeling that Monty never really believed that cable was a business. Now I could be wrong. Every opportunity he had to either merge or sell he jumped at. You were already gone by the time the Cox merger was proposed and then with the Time Inc. merger he jumped at. What is your reaction to that?
DITTRICK: I was there when we did Cox because I was in the group doing it. Monty was to me a brilliant guy, difficult to know but brilliant, probably very hard to get close to. I always had a good relationship with Monty and I always believed in him. I left because it got to the point where there just wasn’t the right room under the right condition.
KELLER: I didn’t want to get into that, but…
DITTRICK: That’s all right, but I have the utmost respect for him and I never had that feeling that he didn’t think it was a business. I think he would try to maximize what we did. One of my favorite experiences was, we did this I think three times in the five years I was with Monty, we would have what I called the annual meeting with Bud where Bud and he…
KELLER: That’s Bud Hostetter, currently known as Amos.
DITTRICK: Amos and Monty would sit in the office, I still remember on 3rd or 6th or whatever it was in Denver, and we would sit there – that was the first time we did it – and talk about merging ATC and Continental Cable, and the exercise, which neither one of them I believe ever really planned to do, but did it because I think the two of them were two of the brightest guys – along with John Malone, but he wouldn’t be in this – but they would do this because they had spent the year negotiating with people of ordinary mortals such as you and I who would be mincemeat to these guys and so they would do this, I always though, just to clean out their mind because they were negotiating with their peer and really be forced to negotiate. So you would sit there for a day and we’d have this discussion and we would evaluate each company and you’d get pluses and minuses for unbuilt franchises or for personnel or for the quality of the subscribers and for cash flow and we would go through 30 different values of things and ascribe all this to it, and then at the end of the day we would in a friendly way determine – the two of them, and I would just be sitting there listening, and Amos would always have somebody with him, in the early days his partner… I can’t think of his name…
KELLER: Grousbeck, Irv Grousbeck.
DITTRICK: Irv Grousbeck – and they would go through this whole exercise and clean out each other’s mind.
KELLER: Did they want to get some handle on what the value of their company was, do you think?
DITTRICK: They might have, but I really said they were just trying to clean out their mind and deal with a peer, not one of us easy mortals. And then they’d conclude, well, I guess we have too much of a difference in our thinking of the valuation. We’ll try it again. And so we’d part of a year, 18 months and then we did it again. And it was just a day, it was a friendly meeting, but to hear the two of them work at it was fascinating.
KELLER: How did the Cox thing come around? You weren’t there?
DITTRICK: I was there. We went up to Vail, Colorado to match ourselves to see if we could like each other.
KELLER: We did.
DITTRICK: I think I left shortly thereafter. We did.
KELLER: Every one of us liked each other. They’re a class act.
DITTRICK: Well, they and Continental I’ve always thought were good people. But it was shortly after that that I left and Pete Conrad came. I always thought Monty thought it was a business but Monty always wanted to grow it. Monty did not – at least when I was there – do too much in the day to day operations. He let me worry about that. He was always thinking big picture and where he could go acquire somebody large, merge with somebody big, so he always had visions of that…
KELLER: Were you there the first go-around in San Diego when Time Inc. sold the San Diego system to ATC and then came back and bought the whole shebang?
DITTRICK: No. We knew the Time Inc. people but that happened after I left.
KELLER: Doug, is there anything else you want to add before we wrap this up?
DITTRICK: It’s been a lot of fun. Come by again and let me go back in my memory bank.
KELLER: We may do that. We may get session number two.
DITTRICK: It’s been fun to see you. We spent a lot of good times together out there and there were a number of people… as you look back, different people. Ed Callahan – you wonder what ever happened to Ed Callahan.
KELLER: He is an engineer. He was with us for a long time. He went with one of the major engineering companies, I think just left and is doing a pretty good job of consulting right now. Ed’s doing real well.
DITTRICK: But it’s been interesting and obviously while I’ve been on the outside now for 10+ years, it’s fun to see everybody do well. We do keep track; our cable group, which I’ve got to call you about, but that group of eight, we call ourselves the Cable Hackers. We’ve had that name for a long time and lo and behold, if you’ve got time for this, it’s just an aside, but the Cable Hackers became the ROACH – the Royal Order of Ancient Cable Hackers as we’ve aged. So we became the ROACH and they had a group that we called the employees. These are younger Hackers that includes the like of Brian Roberts, Terry McGuirk, Jim Robbins, Amos’s right hand… this is terrible… Tim Near, Jim Hoak, Cownie, a litany of those folks, and they became the young hackers. One of the most fun things we did was when the old Hackers entertained the Young Hackers at a Ryder Cup match in Palm Springs and the eight of us and the eight of them and we showed up at the Vintage Club where a number of the fellows belong in Palm Springs and we’d made the arrangements and we were going to play a three day match and we agreed that we would meet Monday morning at the Vintage Club for breakfast, and we had them in different quarters. We showed up for breakfast that morning and they were very proud of themselves, this young group of troops, because they all showed up in khaki pants and bright red golf shirts that they’d acquired, and they very astutely had acquired red shirts, white shirts, and blue shirts all of the same color to go with their khaki pants so each day they would be uniformed. But the eight old ROACHs, actually nine of us showed up, and we had Plus 4s, the baggy white pants with pastel pink shirts and the crushed tam hat, and they knew at that time it was all over. They couldn’t outdress us, they weren’t going to outplay us even though they were obviously much better handicaps. So we had three days, great match, great camaraderie. We escaped with a victory. They did it one more time, which again we won, and they’ve decided that they don’t want to play us anymore. So the young guys, we’ve left this cable industry in their hands can’t keep up with the old guys. We have a lot of fun with it.
KELLER: It’s been a lot of fun over the years, too, for all of us that have been in the business over the years. This has been the oral history of Douglas H. Dittrick and it is brought to you as part of the Oral History Program of The Cable Center. Thanks to Gus Hauser and the Hauser Foundation for the financing of this program. Your interviewer was Jim Keller. Thanks Doug.
DITTRICK: Thank you, Jim. I enjoyed it.
