Interview Date: September 21, 2001
Interviewer: Jim Keller
Abstract
Leo Druckman reviews his start in cable as a regional sales manager for Jerrold Electronics, television reception difficulties in San Diego, and financing to develop a system in that city. He describes establishing a system in El Cajon, the San Diego franchise process and penetration rate, expansion, and the investment of Cox in his company, TransVideo. He explores the substantial opposition from broadcasters leading to the landmark Southwestern lawsuit that ended up in the Supreme Court, and which spurred the development of FCC regulations. Druckman explains the pioneering use of a parabolic antenna in Bakersfield, further expansion outside of California, and the sale to ATC. He outlines the formation of Continental Cable with Cox and Amos Hostetter as partners, comments on ethics in the industry, and indicates that he spent much of his career applying for franchises. He also names Leonard Reinsch as an outstanding figure in cable.
Interview Transcript
JIM KELLER: This is the oral history of Lee Druckman, cable entrepreneur, first-rate – probably one of the most famed – entrepreneurs in all of cable television, who developed the first, I think it’s generally accepted, the first cable television system in a major market, here in the San Diego area. Lee has been involved in the cable business since the very early ’60s, and at the time that he got into the industry itself he was a salesman and the western divisional manager, sales manager, for Jerrold Electronics. Lee, how did you get involved in cable television from that stand?
LEE DRUCKMAN: Well, first of all, Jim, I’d like to thank you for having such a flattering introduction. I got started in cable back in 1957 when I went to work for Jerrold Electronics as their western regional sales manager.
KELLER: You were an engineer? An electronics engineer?
DRUCKMAN: No, I’m not an engineer, strictly a salesman, I guess.
KELLER: How’d you get involved with Jerrold?
DRUCKMAN: Well, I was back in Philadelphia, actually looking for a job in those days. I particularly wanted to re-locate on the West Coast, and a good friend of mine had mentioned that Jerrold was looking for someone to be located in the San Francisco area and to be in charge of the western region, and that’s how that happened.
KELLER: So, you took the job, came out here, and became western regional manager. Then how did it develop?
DRUCKMAN: Well, my office was in Redwood City, California, which is near San Francisco, and it was our job to go into various communities that did not have cable television, and not many did at that time.
KELLER: This was in the late ’50s?
DRUCKMAN: This was in the late ’50s, and we’d try to find appropriate cities and towns that were not getting good television reception, and we would then try to locate somebody in the community, either a doctor or lawyer or Indian chief that had the funds to build a system. In many respects, in those days, they were community efforts, which turned out to be very profitable ones.
KELLER: This was when Jerrold was selling the equipment and taking a piece of the action at the same time. Is that right?
DRUCKMAN: That’s right. We, as you know, were probably the foremost leaders in the equipment manufacturing business, and we often would supply the equipment and build the system on a turnkey basis, turn it over to the owners and hopefully even get a piece of the action.
KELLER: Not hopefully – you DID get a piece of the action.
DRUCKMAN: Well, we found out in the courts later on that…
KELLER: So, the courts finally said you can’t do that anymore.
DRUCKMAN: We can’t do that. But I did that for about five years, and on one occasion. I was actually living in Tucson, Arizona at the time, even though I was officing in Redwood City. I was on my way home for the weekend. The main office in Philadelphia called me and asked if I would stop in El Cajon to see if I could collect a bill from a guy that had started a cable system there and was into them for about $25,000 and hadn’t paid his bill. So, I said, “Sure, I would stop,” which I did, and when I got to El Cajon, why, I found a note on the door that the system had been closed and there was a name to contact. After contacting this party I found out that they were essentially out of business. They had about, oh; maybe fifteen or twenty subscribers, but they did have a franchise. And I think we later found out that the owner was in prison. They had found out that he had been AWOL from the Army and had a record. His other two partners were not able to continue with the business, as they didn’t know anything about it. One was in the plastering business, and the other one was an attorney, who had just undergone brain surgery. So, this fellow that was in prison, who had started this system, was basically an antenna installer, had learned a little about cable TV and had tried to get it started.
KELLER: So what happened then? How did you get involved?
DRUCKMAN: Well, I called the main office back in Philadelphia, to tell them the story, and asked them whether they might be interested in buying this existing defunct system. I was told by the main office that Jerrold wasn’t interested because San Diego was considered a major TV market in that all three networks were already there, and there was probably not much that we could offer in the way of cable television. After walking around town a little bit, and seeing the 40 and 50 foot antennas on everybody’s roof, why I realized that they were having difficulty getting local reception.
KELLER: Even in the San Diego market?
DRUCKMAN: Even in the San Diego market. San Diego is quite hilly, and therefore some areas have difficulty getting local reception.
KELLER: Millions of mountains.
DRUCKMAN: Right! So, it looked to me like there was real promise in this situation and I contacted some folks that I knew on the East Coast that might be interested. I was successful in finding some investors, and we raised a total of, I think it was about $150,000, and we decided that we were going to go into business. Well, I made a deal with the three owners of the business to pay them $5,000 a month for the next – no, it was $5,000 a year, for the next three years, and made a deal with Jerrold Electronics to pay them 50 cents on a dollar, and with the money I had raised on the East Coast, we decided to go ahead and build a test market.
KELLER: Where did you get the money on the East Coast? Was it New York?
DRUCKMAN: My father-in-law’s accounting firm actually put up the money, and I also borrowed some money from a company in those days called Economy Finance, who didn’t know very much about cable television, but they were courageous enough to think that maybe cable television had a future.
KELLER: And without Economy Finance many, many operators never would have gotten started. Do you remember who you dealt with?
DRUCKMAN: Yes, I dealt with a guy by the name of Jim Ackerman, and…
KELLER: A famous name in the history of cable television.
DRUCKMAN: Jim not only had some forward thinking about the future of cable, but he was willing to make us a loan. We did pay that loan off, by the way.
KELLER: Exorbitant interest rates, as I recall, at the time.
DRUCKMAN: I think we probably paid them about 10 to maybe 11 or 12 per cent interest.
KELLER: Is that all? I thought it was higher than that.
DRUCKMAN: Well, I really don’t recall, but it was high at the time.
KELLER: Substantial. Well, they were in that kind of market.
DRUCKMAN: They sure were, right.
KELLER: You said they took a chattel on the system?
DRUCKMAN: Yeah, they wanted some security and we finally ended up giving them a chattel mortgage on the system.
KELLER: On the cable, and amplifiers.
DRUCKMAN: I don’t know whether they would have actually climbed the poles and removed the cable and equipment if we hadn’t made it, but that’s what we ended up giving them.
KELLER: And how many miles did you build in El Cajon?
DRUCKMAN: Well, the initial test was about 35 miles, and we felt that that was sufficient to determine whether we had a product we could sell, and by the way, our service charge per month in those days was $5.50 per month. We offered the three local channels from San Diego, and we also offered the four independent channels from Los Angeles, and that was really the reason for our success. Our success was the fact that we could bring to the cable subscriber more channels from distant location than they could receive locally, and the four channels that we brought from LA were four independent channels, so there was a greater variety of programming, and that was the reason for our success.
KELLER: San Diego, at the time, only had the three network stations. Is that correct?
DRUCKMAN: That’s right. There were no UHF, there was no educator, it was strictly the three networks.
KELLER: No independents, but you did bring the four independents from Los Angeles.
DRUCKMAN: We did, and we also brought some of the network stations from LA, and the reason we did that is that some of their local programming was different from the local network programming here in San Diego.
KELLER: And you were using the Jerrold 12-channel broadband amplifier at the time?
DRUCKMAN: No, we were using… we built the second broadband strip amplifier system, which meant that each channel was amplified separately.
KELLER: At each amplifier location.
DRUCKMAN: At each amplifier location, and all of the amplifiers in those days were tube type, so we had to have a power supply at each one of those locations. A lot different than what…
KELLER: And a box that looked like a coffin with holes.
DRUCKMAN: That’s right, exactly.
KELLER: Where’d you go from there, after El Cajon got going? When did you get involved in the city of San Diego itself?
DRUCKMAN: Well, after we felt that we had something worthwhile in El Cajon, we decided to build the rest of El Cajon, and I think all told, in El Cajon we probably had, oh, maybe 150 miles of plant, and in the very early days we were able to attain 30 and 40 per cent saturation the first year.
KELLER: What kind of density did you have for homes per mile?
DRUCKMAN: Oh, we had great density! We had density of probably 125 to 150 homes per mile.
KELLER: So 30 to 40 per cent penetration was a good number of homes.
DRUCKMAN: Which was terrific.
KELLER: What did the Jerrold people say after this thing became successful and after they’d recognized that? Or what did Milt say, Milt Shapp, after he knew they’d turned it down?
DRUCKMAN: Well, I think they realized that they had probably made a mistake. They were at least happy to be the supplier of the equipment because we did buy all of our equipment from Jerrold.
KELLER: But you didn’t give them a piece of the action, did you?
DRUCKMAN: No, they didn’t get any pieces of the action.
KELLER: You tried to sell that to other people, but you wouldn’t take it yourself.
DRUCKMAN: That’s right.
KELLER: So, then was San Diego next?
DRUCKMAN: After we felt that we had something, a success, in El Cajon, we approached the city of San Diego, but cable television was very, very new to everybody in San Diego at that time.
KELLER: There’s a question that comes to my mind, at that time. El Cajon was successful because it was behind the hills and you needed a large antenna, but you didn’t find the same thing in San Diego, did you?
DRUCKMAN: Probably not to the same extent, but as long as we could provide more programming, and more variety…
KELLER: Again relying on the…
DRUCKMAN: Again relying on the independents, which were basically movie channels, sports channels, some educational, so it was quite different from the networks that they were already receiving. People were willing to pay $5.50.
KELLER: Tell us the story about the franchise situation in San Diego, would you please?
DRUCKMAN: Well, that’s kind of a cute story because there was no precedent, obviously, and therefore there was no franchise ordinance that had been adopted, and of course, in those days, there were no rules for cable television, either local or federal. By federal I mean FCC. When we approached the city of San Diego, of course we had the opportunity of at least showing them what we had done in El Cajon, and the city was quite receptive to the idea, and they adopted an ordinance similar to the one that we had in El Cajon, and they then asked me what area of the city of San Diego did I want to serve. Well, I remember the day that we met with the city attorney in his office and he had a big map on his wall of the city, and I looked at it and I said “Well, we’ll take everything south of the San Diego river channel.” Because in those days, which was back in – oh, I think that was 1963-1964 – the majority of the population of San Diego was south of the San Diego River channel. North city, west, and La Jolla, and that area hadn’t yet really been populated. So, the city attorney said, “Well, okay, we’ll give you everything south of the San Diego river channel, and if you do a good job and we’re happy with you, you can come back and we’ll expand the area to include additional areas.” And that’s really…
KELLER: They were giving you the franchises as if you were a cab company or something like that?
DRUCKMAN: Yeah, when we went to writing a franchise, or an ordinance, there was none, so they finally decided that the closest thing to cable television was either taxi cabs or garbage collection, because we both, or we all, used the city streets, and therefore that was something similar to what they were acquainted with.
KELLER: What was your fee?
DRUCKMAN: And I was just going to mention to you that the gross receipts tax at that time, for the privilege of crossing the city streets and easements, was 2 per cent.
KELLER: And did you pay $50 for a…
DRUCKMAN: Well, you had to pay a minimum of $50 for a franchise, and I thought I’d outsmart any possible competition, so I bid $51. I was, by the way, the only bidder.
KELLER: And what year was this?
DRUCKMAN: That was ’64.
KELLER: And then did you start building it right away? And how’d you finance it?
DRUCKMAN: We started building… oh, and then we ran into another problem. The problem of where were we going to find the funds to do this? And we went back to our contact in New York and they put us in touch with an investment banking firm by the name of Burnham & Co., and they liked what they saw in our projections and our success in El Cajon, and they raised another $175,000 for us of equity, and in those days, the investment banking…
KELLER: Was it straight debt, Lee?
DRUCKMAN: It was all straight debt. There were options, obviously, in a convertible position, but in those days the investment banking firms kept everything in house. There was a private placement of their partners, and their partners, I remember Tubby Burnham many years later saying to me that TransVideo, which was the name of our company, wasn’t necessarily the biggest deal they ever made, but it was sure one of the best ones.
KELLER: And did they continue to finance you, then, as you built the city?
DRUCKMAN: They continued to finance us. About that time after we got started in the city of San Diego, we decided that it was time that maybe we ought to look for some opportunities outside of San Diego, and I decided that Bakersfield would be an appropriate city because the same parameters existed in Bakersfield as in San Diego, and that being that the cities were about, oh, about 100 air miles from the transmitters in LA.
KELLER: Before we get into Bakersfield, and I do want to get into that, there was another development in San Diego for the remaining portion of the city, is that correct?
DRUCKMAN: You’re right, you’re correct.
KELLER: So how did that work out?
DRUCKMAN: Well, one day we were quite surprised to find a couple of engineers appear in our office and represented themselves as someone who worked for Pauley Petroleum. That’s the same Ed Pauley that built the Pauley Stadium at UCLA, and they said that they had done some investigation into the cable industry and they thought it was one that they might be willing to invest some money in. They then did a little bit more research and digging and found out that we only had everything south of the San Diego river channel, and they claimed that they had approached the city and the city was considering the possibility of granting them a franchise for the northern portion.
KELLER: Had they been in the business before?
DRUCKMAN: They had not been in the business before. So they asked me if I would be willing to build the system for them and manage it and get a 10 per cent interest.
KELLER: Now, this is the northern part of the city?
DRUCKMAN: This is everything north, everything at that time, north of the San Diego river channel.
KELLER: So you would have a 10 per cent interest in the north part of the city, and you owned the entire south part of the city?
DRUCKMAN: Along with our partners, yes.
KELLER: Along with your partners. And what did you call those two companies?
DRUCKMAN: Well, the system that was built in the northern part of the city was called Southwestern Cable, and the system that was in the original southern part of the city was called Mission Cable. We also used the same name in the other cities that are contiguous to San Diego, that being La Mesa, and El Cajon, and Spring Valley, and Chula Vista, National City, and so on.
KELLER: What kind of penetration were you getting in the city limits of San Diego? How did it compare to what you were getting out at El Cajon?
DRUCKMAN: Very close.
KELLER: It was?
DRUCKMAN: Very close. People were hungry for good television reception in those days, and they were not only hungry for good reception, but they were hungry for more variety, more channels. So when we were able to bring a 12-channel system, and at least 4 channels of brand new programming, why, they were willing to pay the $5.50 a month, and I might add, that the density in some of the areas in the city limits of San Diego was even better than in El Cajon.
KELLER: I would think so. I’ve always contended that it’s not necessarily the percentage that you have, but how many homes that you are serving per mile of cable.
DRUCKMAN: No question about it, right.
KELLER: And so many times, as I recall, that some of the people who were in the financing business, or even the major companies getting in at that time never recognized that fact.
DRUCKMAN: That’s right.
KELLER: They were all looking at penetration rate.
DRUCKMAN: Exactly. There were certain benchmarks that they followed and their blinders were such that they couldn’t see behind them.
KELLER: 30 per cent of 100 homes is 30 homes, and 30 per cent of 200 homes is 60 homes.
DRUCKMAN: Right, exactly. No question. And about that time, which would have been, let’s see… that would have brought us to somewhere around ’64, somewhere around ’64, ’65, we went ahead and applied for the franchise in Bakersfield.
KELLER: Did somebody make an attempt to buy your system at that time in San Diego, or was that later on?
DRUCKMAN: That was a little bit later on, but at that time, we also saw the need for additional financing, and we knew that the franchise fight in Bakersfield was going to be a lot more difficult than the one here in San Diego, because the three local television stations and a group of 27 businessmen joined up together to oppose bringing cable television to Bakersfield. Their argument before the city council was that if they allowed cable television in Bakersfield, all of those programs and stations from LA will be brought into the market and the advertising would be exposed to the residents, and all of the people in Bakersfield would go to Los Angeles to do their shopping, in particular their car shopping.
KELLER: I think they believed it.
DRUCKMAN: Oh, they definitely believed it, but they lost that argument and the city of Bakersfield decided that they should have cable.
KELLER: Who owned the television stations there in Bakersfield?
DRUCKMAN: Well, one was Burt Harris from Harriscope, and another one was Time Life, the same as our channel 10 down here, and I don’t recall the third one at the moment.
KELLER: They went in conjunction to big on the franchise against you?
DRUCKMAN: Oh, yes. First they opposed cable TV, and then they opposed us, so we had quite a battle there. About that time is when Time Life approached me with the idea of becoming a partner in the San Diego system, and they invited me back to New York. I think it was Edgar Smith, who was a vice-president of Time Life, and they invited me up to one of their private dining rooms up on the top floor of the Time Life building, which I must admit I was greatly impressed by, and we talked about the future of cable because at that time, no major broadcaster had seen fit to get into the cable business. Their fight at that time was opposing cable. They claimed that we were stealing their signal and turning around and selling it for a profit and so on and so forth.
KELLER: Pirates.
DRUCKMAN: We were called pirates, that’s right. But in discussing the possibility of Time becoming a partner, why, I said to Mr. Smith, “I think we have a problem because we could join you in San Diego, but we’re opposing you, we’re competing for the franchise with you in Bakersfield.”
KELLER: Was he aware of that?
DRUCKMAN: I think he probably was aware of it, but his response was, “Well, those are two separate divisions, and we wouldn’t have that problem.” And I said, “Well, Mr. Smith, we’re only a little company, we only have one division, and I think we would have a problem.” And that was basically the end of that possibility of them joining us.
KELLER: Eventually you made a deal with Cox up there, didn’t you?
DRUCKMAN: Yes, it was only a short time thereafter that Leonard Reinsch, who was president of Cox Broadcasting, called me and we got together and I was very favorably impressed with Leonard. You know, Leonard was the guy who was responsible for the television interviews, the Nixon-Kennedy debates.
KELLER: A fine gentleman.
DRUCKMAN: And Leonard did a great job and if you recall, it was kind of comical, the people who helped Nixon forgot to put any makeup on him…
KELLER: Very well. I remember very well.
DRUCKMAN: And he stood before the cameras and he needed a shave; it looked like he hadn’t shaven for two or three days, because I guess he had a heavy beard to begin with.
KELLER: Leonard Reinsch was very forward thinking in being able to get a major broadcast owner into the cable television business.
DRUCKMAN: Right. He really was the first major broadcaster to get into the cable business.
KELLER: Lee, as we ended that last tape, you had just received a franchise, or you were fighting for a franchise in Bakersfield, and you then were approached by Cox to join them in that venture up there. Did you do so?
DRUCKMAN: Well, no. Cox really approached us with the idea of joining us in San Diego. We didn’t have the franchise yet in Bakersfield, and Cox became a minority shareholder in our parent company, TransVideo. I think, if I recall correctly, that was about an 18 per cent ownership, equity ownership.
KELLER: But they increased that as the years went by, didn’t they?
DRUCKMAN: They did. As we required more funds, why, they were able to provide those funds for us.
KELLER: That was the Mission portion of the system?
DRUCKMAN: Right, Mission was the operating company, TransVideo was the parent company.
KELLER: Which finally was sold to ATC, wasn’t it? Time bought you out, did they not?
DRUCKMAN: No, no, no.
KELLER: Okay, what was the chronology there?
DRUCKMAN: The chronology was that we ended up getting the franchise in Bakersfield…
KELLER: I’m talking about TransVideo in San Diego.
DRUCKMAN: Oh, well, TransVideo didn’t sell out until some years later.
KELLER: But eventually, though, you did sell to Cox?
DRUCKMAN: Yes, eventually Cox bought us out 100 per cent. I stayed on as manager, but Cox became the sole owner of TransVideo.
KELLER: TransVideo. How about Mission?
DRUCKMAN: And Mission as well.
KELLER: And Mission also.
DRUCKMAN: Yes.
KELLER: How about the northern part? Did you ever put that into the deal?
DRUCKMAN: No, that… let’s see. The Southwestern system was sold to ATC.
KELLER: It was that portion that ATC bought, and not the…
DRUCKMAN: Right, right. Now, one thing I think it’s appropriate to talk about now, is during the time that we were applying for the franchise in Bakersfield, we were sued by channel 8, KMFB, here in San Diego. They applied for an injunction to stop us from any continuing construction. The basis of their suit was that we were fragmenting their audience by bringing in the Los Angeles channels and if we were allowed to continue to do that, the chances are we would put the local television stations out of business, and those folks who didn’t subscribe to cable television would find themselves without any television.
KELLER: This was the very famous Southwestern case.
DRUCKMAN: This became the infamous Southwestern case, which…
KELLER: Landmark case.
DRUCKMAN: Which later was known as the landmark case in cable, and the reason for that is that the results of that case finally resulted in the FCC adopting rules to control cable television.
KELLER: How did the controversy develop?
DRUCKMAN: That lawsuit was brought in the lower court here in San Diego, and the court decided that they should enjoin us from further construction pending a review by the FCC. We took that case to the Court of Appeals in San Francisco, and we won. We were able to demonstrate to the Court of Appeals that no cable system had put any television station out of business in any other location throughout the United States, and that we were not intentionally degrading the signal of the local stations.
KELLER: Was that one of their claims also, that you were degrading the signal?
DRUCKMAN: That was also, yes. It was the two claims: one of the degrading of signal, and two, the fragmenting of their audience.
KELLER: How did they prove the degradation of the signal in the lower court?
DRUCKMAN: Well, they were able to prove to the extent that through engineering analysis that we in fact, or that their signal, in fact, was degraded to some extent. The fact that it passed through coaxial cable and the fact that the signals went through amplification and so on. But to the naked eye, a subscriber watching a television set, could not discern any degradation.
KELLER: And the Appeals Court agreed with you on that point?
DRUCKMAN: They did.
KELLER: And what was the other point?
DRUCKMAN: Well, the other point was the point that by fragmenting their audience we might put them out of business, which they found to be a ridiculous claim.
KELLER: That is the Appeals Court?
DRUCKMAN: That is the Appeals Court, and shortly thereafter, why, the KMFB took this to the courts in Washington, the Supreme Court, and the Supreme Court agreed to hear this case. The FCC at that time decided to join with KMFB and be a part of that lawsuit.
KELLER: Did you get any help from the National Cable Television Association, or anybody like that?
DRUCKMAN: I was wondering if you were going to ask me that question. They gave us some help. It was very costly. Cox paid for most of that lawsuit, and it was a very expensive one. The FCC never answered the issue as to whether we degraded their signal or fragmented the audience. They did put a stay on any further expansion of our system pending their review. Well,…
KELLER: Ultimately, then, that went to every major market system, did it not?
DRUCKMAN: Yes, it did, but I must admit that we did continue to expand. We expanded on weekends…
KELLER: Sub rosa.
DRUCKMAN: …and evenings, and so on and so forth, and we added a substantial number of subscribers during, by the way, what was about, I think, close to a three year period that the FCC was reviewing this whole situation.
KELLER: You were never enjoined from…?
DRUCKMAN: We were enjoined from any further construction, yes we were.
KELLER: But you didn’t pay any attention to it.
DRUCKMAN: We paid some attention, we didn’t pay a lot. Pretty tough to find us out there, on the poles.
KELLER: On the poles, however, the protagonist in this whole thing was Augie Meyer, who owned that station, right?
DRUCKMAN: Who still owns, or his estate, still owns channel 8 here in San Diego, KMFB.
KELLER: He was a very difficult man to go against, wasn’t he?
DRUCKMAN: He was. Well, you have to recognize that in those days, the broadcasters were vehemently opposed to cable television. Maybe if I was on their side I might have felt, to some extent, that I can understand their feelings, but after the FCC finally came out with their ruling, and their ruling was that they would adopt cable TV rules, both operational rules as well as technical rules.
KELLER: That was the first order in the report, wasn’t it? Or was it the second?
DRUCKMAN: No, I think that was the first. I’m not sure, Jim. The first order may have been to study the case, and the second report and order, I think, were the rules themselves.
KELLER: Were you then grandfathered in San Diego…
DRUCKMAN: Yes, we were.
KELLER: …for those signals from LA?
DRUCKMAN: We were, fortunately we were grandfathered, our whole system was grandfathered, and that was, fortunately, why we had continued to expand and add subscribers, and we had a substantial number of new subscribers by the time that second report and order finally came out.
KELLER: Are the systems in the San Diego area currently carrying LA signals?
DRUCKMAN: Yes. Yes, they are.
KELLER: On that same grandfathering?
DRUCKMAN: Well, based upon the current rules, whatever they are today. During that same period, by the way, we did get the franchise in Bakersfield, and we built that system, and an interesting side note, by the way…
KELLER: Even with the opposition of the three television stations there?
DRUCKMAN: Even with the opposition. They got the county, by the way, the county area, but we got the city franchise.
KELLER: That’s how Burt Harris got his start in cable television.
DRUCKMAN: That’s correct. That’s right. An interesting side note was after we got the franchise in the city of Bakersfield, the problem was getting the signal there, getting decent signal, good signal that we could turn around and sell, and we couldn’t find signal in the city limits. So we went to a little town by the name of Arvin, which is, I think, maybe 9 or 10 miles away, and we found pretty signal in a peanut farmer’s field. Well, the problem was how do we get that signal all the way from Arvin into the city limits of Bakersfield, and we did something new that no other company had done at that time. We built a parabolic antenna, which was 270 feet wide and about 90 feet high. It acted like a catcher’s mitt.
KELLER: You were not the first one to use a parabolic antenna.
DRUCKMAN: Is that right? Well, it was the first one that I was aware of.
KELLER: Jim Davidson did it down in Arkansas.
DRUCKMAN: Maybe that’s the guy we copied, because we had seen or heard about another one, but we weren’t sure where it was.
KELLER: He had developed it in Arkansas.
DRUCKMAN: Well, it worked pretty good, and we went sub-channel into town, because we were able to go many more miles sub-channel and then we converted back up.
KELLER: You didn’t attempt to go microwave at that time?
DRUCKMAN: Well, you couldn’t get a microwave path in those days. Everybody, the local stations, all they had to do was object and they would put a roadblock in front of us, so we knew the only way possibly was to build this parabolic, and it worked pretty good. It actually worked okay. We got pretty good signal.
KELLER: Constant? Consistency?
DRUCKMAN: Yes, as I recall, it was, because we did quite well in the Bakersfield area, so we had good signal.
KELLER: And you were importing, then, all of the LA signals into Bakersfield, or just the independents?
DRUCKMAN: I think it was all of them. I’m pretty sure it was.
KELLER: Over the three local network stations?
DRUCKMAN: Right, right, so we probably had a 12-channel system up there also, as I recall.
KELLER: But the Southwestern suit never encompassed, then, your operation in Bakersfield. Augie Meyer didn’t extend it to that?
DRUCKMAN: No, no, no. No, he had no standing in that area, he had no station, so it didn’t… But in fact, it really did effect Bakersfield when the FCC finally adopted their second report and order, those rules applied to cable systems nationwide, and that was why that lawsuit has always been known as the landmark case.
KELLER: You never were grandfathered in Bakersfield, then?
DRUCKMAN: No, no we weren’t.
KELLER: So after that case was finally adjudicated did you have to cease carrying the LA signals in Bakersfield?
DRUCKMAN: I don’t think so. Maybe there were some that didn’t follow within the contours that permitted us to carry them in Bakersfield, I really don’t recall. I just don’t remember.
KELLER: They would not have been in the “B” contour of LA, but they sure were importing it into the “A” contour of the Bakersfield stations.
DRUCKMAN: Right, right.
KELLER: It’s an interesting question.
DRUCKMAN: Yeah, I don’t know.
KELLER: But you weren’t satisfied, then, with just building Bakersfield, you had to go out and look for other places to build, didn’t you?
DRUCKMAN: Right, we did. We, through a curious set of circumstances, we also became involved in Kansas, and we built the system in Chanute, Kansas, and Parsons, Kansas, and I think that was when we also started a system in Arizona, in Sun City, in a retirement community.
KELLER: Del Webb’s Sun City?
DRUCKMAN: Del Webb’s Sun City. But those were the very early days, and it was very difficult in a city like Phoenix, where we didn’t have a source of distant signal, like we did here in San Diego and in Bakersfield, having the Los Angeles signals to draw from.
KELLER: Phoenix was always a difficult market.
DRUCKMAN: Yeah, it was a very difficult market, and it wasn’t until satellite broadcasting came along that that system finally became successful, and it did, along with the whole city of Phoenix.
KELLER: And I think Cox had a part of that operation, too.
DRUCKMAN: I think they did have a portion of that.
KELLER: I think they divided Phoenix into three or four different areas, as they did here in San Diego. How long did you have the systems in Kansas?
DRUCKMAN: Well, I sold those systems to your boss, to Monty Rifkin at ATC, and we used those funds from the sale of those systems to continue to expand here in San Diego. I think that probably was in maybe ’67, ’68, somewhere in that area.
KELLER: ’68 was when ATC was formed, and it was just after that that they…
DRUCKMAN: It was just after that, yeah.
KELLER: …bought those systems.
DRUCKMAN: Right.
KELLER: Then you also went up into Michigan, didn’t you?
DRUCKMAN: Well, that wasn’t until quite a bit later.
KELLER: What happened in the interim, then?
DRUCKMAN: Well, in the interim I went over to Europe, with an associate of mine, to attempt to start a long distance, toll free dialing system, similar to our 800 number here in the United States, and I don’t know today whether that is still operative or not, but we were successful in getting that started to a limited extent. The problem in Europe in telephone is that going from one country to another, they have the language problem, and they want everything on a hard copy because of the conversion of monetary funds. There isn’t any room for error there. So, not as much business is done by telephone in Europe as it is here in the United States. We were successful in dealing with the airlines and some of the brokerage companies and some of the trucking companies, stuff like that, but after about, oh, I guess it was about two years, maybe two and a half years, I came back to the United States, and started another cable TV company in Michigan, Saginaw, Michigan, and we bought Owosso, Michigan along with it. There Cox was a partner and Bud Hostetter also was a partner.
KELLER: Continental.
DRUCKMAN: Continental Cable. The three of us were applying for the franchise, and we finally decided rather than fight one another we would just join together, and we ended up building the system and managing it. Later on, I don’t recall now how many years that was, but later on Cox bought the two of us out, so I’ve sold out to Cox now a couple of times, but I must tell you that they were wonderful partners.
KELLER: They followed the tradition of Leonard Reinsch.
DRUCKMAN: Right, and they’ve been extremely successful, obviously, in the cable business.
KELLER: And it’s still going very well. Then what happened?
DRUCKMAN: I think at that point I went out and played golf and tennis!
KELLER: What happened in Tucson?
DRUCKMAN: Oh, in Tucson. I was afraid you’d bring that up. Well, I was back living in Tucson when the whole concept of cable TV came before the city council and Monty Rifkin from Rifkin… no, he was still with ATC at that time, approached me, and we decided to partner with Monty. That was a big mistake on my part, because my old partner Cox was also anxious for me to join with them, and unfortunately I made the decision to go with ATC, and Cox ended up with the franchise.
KELLER: You can’t pick’em all.
DRUCKMAN: You can’t be a winner all the time.
KELLER: So how did that play out?
DRUCKMAN: Well, that played out that Cox and their local partner built that system, and I understand it’s been very successful. It’s changed hands, I know, a couple of times since then.
KELLER: Wasn’t a franchise awarded to John Kent Cooke, Jack Kent Cooke?
DRUCKMAN: Oh, that goes way back. That goes back to probably ’65, when one evening, without it even being on the agenda of the city council, why, a franchise was awarded to Jack Kent Cooke. I learned of it the following morning in the newspaper.
KELLER: And you had applied for one there also, had you not?
DRUCKMAN: We had approached the city, and it hadn’t gotten to the point of a formal application. So, we were rather surprised to hear that the city had actually granted a franchise, and it just didn’t strike us as being something very legitimate, and we finally decided to sue the city, which we did. We came very close to proving, but were unable to prove for sure, that there was some dirty doings.
KELLER: Hanky panky.
DRUCKMAN: Hanky panky, but they withdrew the franchise, the city did, and Cooke did not build the system.
KELLER: I think as an aside to that, I’d like to mention, and I think you would agree with me on this too, all of our years in cable television, and in the franchising of cable television, we found very few examples of any so called hanky panky in the awarding of franchises.
DRUCKMAN: I think that’s true. I’ve spent most of my working years, or many of my working years, applying for franchises…
KELLER: As I have.
DRUCKMAN: …and I think that’s basically true. Of course, it wasn’t untypical of a company to partner with some local people.
KELLER: Oh, no, but never city council members.
DRUCKMAN: But not city councilmen. And sure, we tried politically to gain as much strength to sway the city council, but we never actually partnered with a city councilman.
KELLER: Or you never paid anybody off.
DRUCKMAN: No, no.
KELLER: And of course the industry has been accused of this.
DRUCKMAN: Oh, I’m sure, because as time passed, the acquisition of franchising became extremely competitive, and from the days of San Diego, when I was the lone applicant, in later years, it wasn’t unusual to see 12 or 15 applications.
KELLER: Oh, I know!
DRUCKMAN: I mean, I can remember one up here in Del Mar, where Bill Daniels, as part of his application, offered the city $500,000 as a gift, and by the way, Bill was successful in getting that franchise.
KELLER: But he wasn’t…
DRUCKMAN: It wasn’t under the table, it was over the table.
KELLER: It was to the city and to the people of Del Mar.
DRUCKMAN: Right. So the industry changed considerably over the years. Today, I don’t think there are any communities left that don’t have cable service.
KELLER: I’m not aware of any.
DRUCKMAN: Yeah, I don’t think there are any.
KELLER: There may be some new suburban areas currently being built, but I think that normally falls right into the hands of whoever owns that area.
DRUCKMAN: Right, and the philosophy of cable has changed. When I got into the cable business, we were purely a reception service. We improved what people could get from putting up a rooftop antenna. Today the cable industry is a programming service, through the advent of satellite programming and so much of the programming that is originated by independent companies, non-network companies. But you know, to this day, Jim, there’s never been a cable system responsible for putting a local television station out of business.
KELLER: No.
DRUCKMAN: None that I’m aware of.
KELLER: Nor the networks, either.
DRUCKMAN: Right, exactly.
KELLER: You became partners with Cox in Bakersfield, but not here in San Diego.
DRUCKMAN: Oh, yes!
KELLER: You did? You did here in San Diego?
DRUCKMAN: Oh, yes, yes.
KELLER: And in Saginaw?
DRUCKMAN: And in Saginaw, right.
KELLER: But never in the Kansas systems?
DRUCKMAN: I think they were a partner. Of course! Sure they were a partner, because we sold out to them, as well.
KELLER: To Cox?
DRUCKMAN: Yes, yes.
KELLER: Then Cox sold to ATC?
DRUCKMAN: Yes.
KELLER: I see. I wasn’t aware of that.
DRUCKMAN: Yeah, I’m quite sure that I recall that correctly. I could be wrong. I know that Monty Rifkin at ATC bought our system in Chanute and Parsons.
KELLER: Independents?
DRUCKMAN: Independent. We didn’t sell those to Cox. So, I guess there were some situations that were independent of Cox.
KELLER: Are you familiar with the name of the brothers that played around in that area of Kansas at the time called the Hudson brothers?
DRUCKMAN: Oh, Larry Hudson and his brother! Yeah, there were a few characters like that.
KELLER: Weren’t they bankers?
DRUCKMAN: I think they were. They were a bit unscrupulous.
KELLER: I would say that.
DRUCKMAN: Yeah, let’s leave it that way.
KELLER: They were interesting.
DRUCKMAN: So we’re not all 100 per cent pure in this business.
KELLER: There are exceptions to that. Do you remember any memorable, obviously you do, but who were the most memorable people that you can think of having met in the cable business over the years?
DRUCKMAN: Oh, I think Leonard Reinsch by far was the most memorable.
KELLER: Tell us about him.
DRUCKMAN: He was a wonderful man, a wonderful partner, and an extremely intelligent man, and he did a wonderful job being president of Cox Broadcasting. They’re a wonderful company. I can’t say enough about them.
KELLER: Still to this day.
DRUCKMAN: And to this day.
KELLER: He was a real pioneer in the bringing of… and here is a very staid newspaper based company, Cox is out of Ohio, and he brought them into this business that no one knew anything about at the time.
DRUCKMAN: In fact, there’s probably something I can tell you that you’re not aware of about the Cox family. The old man Cox, who started in the newspaper business, in Dayton, Ohio, ran for president in 1920 with FDR as his running mate, and lost.
KELLER: I wasn’t aware of that. I knew he lost.
DRUCKMAN: Yeah, but that’s a well respected family in both the newspaper and television, and communications.
KELLER: The fact is, though, is it was so very staid and so very print oriented, and for Leonard to come around and just totally reverse that situation.
DRUCKMAN: Well, I think the handwriting was on the wall about that time that the broadcasters were not going to be successful in killing the cable television industry, and in not permitting it to expand and thrive, and they saw fit to get into the business at that point, and join.
KELLER: And he sold his board, which always amazed me.
DRUCKMAN: That’s correct, yeah.
KELLER: Lee, at the end of that last tape, we were talking about Leonard Reinsch as being a very, very outstanding man, that you remember so much from the cable business, and what a fine gentleman he was, as well as a very honest and thorough businessman, and he was also the advisor to the Democratic party, was he not, in television matters back into the ’60s?
DRUCKMAN: Yes, he was.
KELLER: Do you remember any other stories about Leonard that you can share with us?
DRUCKMAN: No, none in particular. I remember having long discussion with Leonard about why a television station owner should be in a complementary business like cable television, and it took a lot of guts for him to do that, and being the first major broadcaster to do that took some guts, because they were pretty strongly unified anti-cable in those days.
KELLER: The NAB was just, the National Association of Broadcasters, was just adamantly against us.
DRUCKMAN: Exactly.
KELLER: And he was the first one to break in.
DRUCKMAN: That’s right.
KELLER: The first major one, but then the FCC rules prohibited the local television station from owning a cable system in the same market.
DRUCKMAN: In their own market, yes, that’s correct.
KELLER: And I think some of those were grandfathered too.
DRUCKMAN: I think that’s true.
KELLER: You mentioned some of the people that you’ve had a great deal of respect for, Leonard Reinsch, Jim Ackerman…
DRUCKMAN: Well, I think probably in line after Leonard probably would have to be Milt Shapp. Milt Shapp gave me my start in cable.
KELLER: He was the founder and the president of Jerrold Electronics.
DRUCKMAN: He was the founder. When I went to work for Jerrold, and Milt, I used to hear stories about him having started that company with 500 bucks in his garage, and I had a lot of respect for Milt. He always treated me very well.
KELLER: He later became governor of Pennsylvania.
DRUCKMAN: He later became governor, ran for President, as you know, unsuccessfully, but he was a great guy, and a real innovator. So, I had a lot of respect for him and thoroughly enjoyed him.
KELLER: And you worked and knew people like Fred Leiberman?
DRUCKMAN: Well, these were all ex-Jerrold people. After all, Jerrold was really the leading company in the cable industry in those days.
KELLER: If not the only one. Oh, no, I guess there were a couple of others.
DRUCKMAN: There were a couple of others – RCA, and so on – but nobody was close to the same level that Jerrold was. You know, we all knew, in the cable early days that ultimately we all wanted to own a cable system of our own, rather than going out and getting one started for someone else.
KELLER: So many of you did.
DRUCKMAN: And so many of us did, but the big problem was: who wanted to live in some of the communities that cable existed in in those days. After all, this was a business that only existed out in little rural areas. So, when the opportunity presented itself here in San Diego, although I was living in Tucson, why, I knew San Diego very well; I used to come over and vacation here and I loved San Diego. So the opportunity to get into business of my own, and be in a community like San Diego was a wonderful opportunity.
KELLER: Like coming to heaven.
DRUCKMAN: That’s right.
KELLER: In La Jolla. When did you fully recognize that cable was going to be your career? And you have definitely had the entrepreneurial spirit from the beginning.
DRUCKMAN: Well, let me say this, when I started the system here in San Diego, and more precisely in El Cajon, I didn’t have any money of my own, and I wanted to own a piece of the action and I worked for two years without any salary for a piece of the action if we were successful. So, I knew at that time that that was hopefully going to be my future business to be involved with, and fortunately we were successful.
KELLER: You’re always going to be remembered as the guy that went to the mat against the broadcasters in the Southwestern case.
DRUCKMAN: Right. Well, that was fun. I mean, I must admit, I think the most fun, if I have to point to any one place in time, was probably the fight for the franchise in Bakersfield. There were times, and Hank Goldstein will bear me out, that we were actually afraid to get off the airplane in Bakersfield. There were some pretty heavy guys…
KELLER: Hank said the same thing.
DRUCKMAN: …that were opposing us, mostly car dealers, but some of the big farmers were involved, and they were pretty heavy weights. That political, and I use the word “political” and it was political, that political fight to win that franchise was probably one of the real highlights of this business, and we went up there, and almost on a weekly basis, to see what we could do to further our efforts and to show the city fathers that we were the best company and the company that would provide the best service to that community.
KELLER: You were the only one that had any experience, weren’t you?
DRUCKMAN: Yeah, I guess that’s true. We probably were the only ones specifically in the cable business, but the three broadcasters made claims that they were in the entertainment business, they were in the television business. They even came down here to San Diego and made a presentation to the city council here in San Diego what bad guys we were, and the fact that we had come up to Bakersfield and tried to do some of the same things up there that we were doing down here, and that we were going to put local television out of business.
KELLER: And were you at that time fighting the Southwestern case in San Diego?
DRUCKMAN: No, the Southwestern case came just a bit later than that. I think it was just a bit later than that.
KELLER: Did you have any local partners in Bakersfield, the Bakersfield acquisition?
DRUCKMAN: Just Cox.
KELLER: Just Cox?
DRUCKMAN: Just Cox.
KELLER: They didn’t have a broadcast station there, did they?
DRUCKMAN: No, no. Just Cox.
KELLER: Did you then become friends with Leonard, or not Leonard Reinsch, but Burt Harris?
DRUCKMAN: Well, I knew Burt from… actually from playing tennis with Burt at various cable conventions, but that was all. I knew Burt Harris and I knew the manager of the Time Life station – I can’t think of his name at the moment, big tall guy, tall, think guy. I can’t think of his name. But that’s all. I didn’t know the third station owner. I did get to know some of the other partners though.
KELLER: Burt, again, is one of the nicest guys in the world.
DRUCKMAN: Oh, Burt’s a great guy. Absolutely.
KELLER: He’s just resigned as the Secretary of the Cable Pioneers.
DRUCKMAN: I saw that.
KELLER: I hate to see him go. If there’s nothing else that you can add that you can think of at this point, we’ll kind of wrap it up.
DRUCKMAN: Okay, I can just say that it’s been a pleasure to see you again after, what? 35 years maybe?
KELLER: Something like that, yeah.
DRUCKMAN: You haven’t changed a bit.
KELLER: You’re very kind.
DRUCKMAN: Except you’re a little bit whiter up on top than you were before.
KELLER: This has been the oral history of Lee Druckman, one of the original pioneers and entrepreneurs in the cable television business, especially in the major markets. The date is September 10th, 2001. The location is Lee’s home in La Jolla, California, and this is part of the oral history program of The Cable Center. It is made possible by a grant from The Hauser Foundation. Thanks very much, Lee. We appreciate it.
DRUCKMAN: Thank you, Jim.
