Interview Date: November 30, 2016
Interviewer: Seth Arenstein
Abstract
Paul Glist describes his start in the cable industry doing mergers and acquisitions, rolling small cable companies into larger ones. He names the companies he worked for at the time, including TelePrompTer, TCI and Continental, among others. He discusses the evolution of policy-making at the FCC, and some of the issues that have arisen. He explains the type of regulatory environment that works well for the cable, but mentions how Silicon Valley has profited from investment costs imposed on the industry. He explores how network television and cable are different, the former’s business model of only a few stations compared to cable’s multiplicity of voices. He goes on to clarify that the economics of broadcasting are determined by advertising revenue, whereas cable has had a strategy of being able to justify and attract investment in its capital-intensive infrastructure. He also praises cable programming as more experimental and entrepreneurial. In that vein, he explains the dual-revenue stream and bundling models and how they are more effective in serving audiences than a mass advertising model. Next, he tells how he fought utility resistance, and grappled with escalating franchising demands from local authorities in addition to continuing competition from telephone companies like AT&T.
Glist describes the landmark Heritage ruling that authorized cable to use fiber and run non-video services, allowing for diversification. He names Dick Green of CableLabs, Amos Hostetter, Dan Brenner, and Gary Christensen as important collaborators and mentors. He points out how the 1992 Cable Act cost the industry years of development, infrastructure growth and programming, among other things. He explores major legal issues involving set-top boxes, a controversy around retailers selling the devices, and the changes in cable technology that allowed companies to provide multiple services, besides programming, guides and video on demand, to customers. He relates the story of another controversial move by the consumer electronics industry to influence the FCC so they could unbundle cable programming and brand it as their own product, without negotiating copyright with content owners. He clarifies the cable industry’s policy to offer content delivery on any device consumers choose, while respecting copyright and negotiation.
Glist describes the industry’s massive investment in broadband. He addresses another issue with set-top boxes when an environmental organization criticized the significant energy consumption of the devices. He accordingly organized a highly-praised consortium of cable operators, satellite companies, telephone providers and equipment suppliers to create a voluntary agreement on energy consumption for the boxes as well as developing energy standards, saving consumers money as well as minimizing carbon dioxide emissions.
He talks about his pride in getting the NCTA Vanguard Award and being named a Cable Pioneer. In addition, Glist describes his work as general counsel and board president for the Tahirih Center, a national, nonprofit organization that serves immigrant survivors fleeing gender-based violence. He discusses teaching cable law for the Practicing Law Institute, a nonprofit that is devoted to providing continuing legal education to other practitioners. He concludes with thoughts about net neutrality.
Interview Transcript
SETH ARENSTEIN: Hi, I’m Seth Arenstein for the Hauser Oral History Project for The Cable Center. We’re here in New York City at the end of November, 2016, and we’re joined today by Paul Glist, who is a partner at Davis Wright Tremaine, LLP. Welcome, Paul.
PAUL GLIST: Thank you.
ARENSTEIN: Again, this is an interview we could have done in Washington, DC, saved ourselves the trip to New York.
GLIST: It’s all right, we’re in the City.
ARENSTEIN: Yes, it’s a nice city. It’s a great time to be in the City, too, right before the holidays. It’s a fabulous time. Paul, welcome. Let’s start at the beginning. Where were you born? Where were you educated? What made you interested in going to law school?
GLIST: So, I was raised all over, in five different states, Johannesburg, London. We followed my dad’s career around the globe. So I have many different hometowns, whatever is convenient. The rest of the family settled in Texas. So, during the Bush administration, I was from Texas. Very convenient. Went to undergrad in the East, Cornell. Went to law school at Stanford, got recruited out of school to DC. I went to law school, as opposed to anything else, because I enjoyed basically putting intellectual puzzles together and trying to solve problems in new ways. I had no idea that it would be as fun a career as it’s turned out to be, but that’s what took me into law school.
ARENSTEIN: And your first job in Washington, DC was?
GLIST: I got recruited out of school to Hogan & Hartson. They had a rotation program for young people like me, I started doing mergers and acquisitions, and started rolling up small cable companies into somewhat larger cable companies. I loved the people in the business and vice versa, and so I stuck with the industry.
ARENSTEIN: And at about what year was that?
GLIST: I started in 1978.
ARENSTEIN: So were there any deals that stand out at this point that you remember, of smaller cable operators or smaller cable operations being rolled into bigger ones?
GLIST: So, most of my work in the earlier years was for TelePrompTer, which was the largest company at the time, for TCI, for Continental, Telecable, but there was also a slew of smaller operators, from Allen’s Cable TV, all the way through the alphabet to United and UA. And so at various times, we did different deals for different companies, and at all times, we were trying to move through the growing regulatory morass in Washington and the state capitals.
ARENSTEIN: What was the atmosphere like in the state capitals and in Washington, regulatory-wise, regulation-wise? Was it like it is today or was it more informal?
GLIST: Well, in terms of the big picture, cable was emerging from a period of basically a regulatory freeze. It was just coming into its own and there was a little cadre of people inside the Federal Communications Commission who were actually trying to promote this new technology. Which was very helpful, but at the same time, the large incumbent industry was the broadcasting industry and the telephone industry, and both of them were trying to suppress and regulate this industry. A lot of my job was to try to push back against the rent-seeking and keep the path opened for innovation for the cable business. In terms of the way business was done at the FCC, it was far less formal than it is today. You could, and we did, just walk into the building. There was no such thing as security. You’d walk into the offices of the primary regulators, put your feet on the desk, and just talk about how to resolve open issues at the time. And no such thing as social media at the time.
ARENSTEIN: Right, and today — correct me if I’m wrong — today, if you or anybody goes in to meet with the commissioner, it’s posted; it’s known.
GLIST: Oh, yes.
ARENSTEIN: They tell you what time it is and all that kind of stuff.
GLIST: Oh, everything is very strictly regimented. There’s formal ex parte notice requirements that you file and report on what you said. I think if you fast-forward all the way to today, policy-making at the FCC in the last several years has morphed from that kind of casual model, or even an adjudicatory model where you’re trying to weigh facts and select the best economic and technical policy over to one where you’re driven by sound bites and social media, and tweets. It’s as partisan as the Hill. So, it’s a very different atmosphere at the commission today than it was at the beginning.
ARENSTEIN: So as a lawyer, I know you parse your words, you choose your words carefully, I noticed you said it’s a very different atmosphere today. Is it better or is it more difficult?
GLIST: I find it more challenging. I’m a little bit nostalgic for a policy world that is fact-driven. I think that has a lot of advantages for society. That’s sort of how independent agencies were designed to operate, and a lot of that is gone. I remain hopeful that we are emerging from a temporary dip into fact-free policy making but I’m unsure. I think many Washington observers have seen the same phenomenon outside of this little piece of the regulatory apparatus, It’s why it’s been a problem of decisions being made without careful reflection, and without being based in genuine fact.
ARENSTEIN: Is there any advantage to transparency, what we call transparency today? In other words, to know that Paul went in and met with Commission Pai or somebody like that, and for me, as an outsider, to see on a website, or maybe in a publication, oh, you met with him at three o’clock on Thursday, the 14th of July and so you spoke about X, Y, and Z. Is there any advantage for us knowing that today, as opposed to the more informal times?
GLIST: Of course. The debate should be held where the policy differences are aired openly. I have to say that the way it’s actually run day-to-day is the ex parte notices don’t necessarily reflect the behind-the-scenes machinations and that the extensive comments that lawyers work hours and hours on are scarcely read by anyone at the agency. Possibly by somebody in a Bureau. But all of the action is in the one-on-one meetings at the Eighth Floor, at the FCC Commissioner level and with their staff. The debate morphs over time until you’re just on top of the so-called sunshine notice when they’re seven days away from voting, and that’s where the deals are made. So in theory, the transparency is a good thing. I’m in favor of more of that. In practice, we’ve still retreated from a world where the agency is weighing things with an independent judgment. It’s become a highly partisan, largely fact-free zone.
ARENSTEIN: What does that mean for the cable industry, that kind of atmosphere?
GLIST: In many ways, it becomes a question of who is in power. And so —
ARENSTEIN: Political power?
GLIST: In political power, yes. If you have a strong chairman who has a fundamental trust in the operation of the marketplace and a fundamental distrust of the ability of government to manage the evolution of technology, then the cable industry does very well in an environment like that. On the other hand, if you’re in an administration that has, I would call it a regulatory hubris — a confidence that they know better than the market, they know better than the industry, they are willing to try to manage the economy, manage technology — the cable industry doesn’t do particularly well in an environment like that. I would say at this point when we are recording, we’re coming out of an era in which Silicon Valley has held special favor with the Administration and has had many opportunities to seek rents from industries like cable — to basically impose investment costs on the cable industry and reap the benefits for themselves. And that’s part of the Washington game. They can succeed in a certain Administration, certain political power, and we’ll see whether things change in the coming Administration.
ARENSTEIN: Sure. So let’s get back. I know we’ve skipped ahead. I couldn’t resist asking you some of these questions. Back in, let’s say, the early ’80s, you’re working on some of these deals, was there anything that attracted you particularly to cable? It sounds like you got a certain expertise in it, working on all these deals. Was there a point when you said “Gee, you know, I’d really like to stay working on these types of cases in this industry?” Were there any people in the industry that you met? I mean, it sounds like you met people like John Malone and Leo Hindery, who will be here tomorrow, actually. Tell us about some of that, some of the people you met.
GLIST: So, I have to say that all of the pioneers and the entrepreneurs in the cable industry impressed me greatly. Because they were willing to take an enormous gamble on a new technology — for that matter, a new economic model — and build something that had never been built before, against great odds. They really were the Davids taking on the Goliaths. Hard from today’s perspective to remember that —
ARENSTEIN: Yes, yes.
GLIST: — cable was the upstart and the challenger.
ARENSTEIN: Absolutely.
GLIST: So first of all, the fight was intriguing. To take on a world in which three, maybe four, television stations were available in a market and turn it into an environment where you had this multiplicity of voices. And to move from an economic model where a program lived and died solely on the amount of advertising it could command to one fueled by a dual-revenue stream that could finance far more consumer choice, far more niche programming, and to do it with a business model that required enormous patience from the investment community. We had to invent a new economics to measure it. We had to measure, you know, earnings before interest, taxes, [depreciation and amortization], and EBITDA was invented in order to justify investment in the cable industry, so that investors would put the money in to build this incredibly capital-intensive infrastructure and reap the rewards way down the line. That’s the kind of patience that I would love Wall Street to have today. We could invest in a lot more infrastructure if we had that. But, the cable guys were pressing all of these new models and they were doing it in a way — you talked about informality at the FCC. You could make decisions around the kitchen table. And you could do it so quickly. You evaluated it, you made the decision, you went out, you executed it. You could turn on a dime. And of course, a lot of that is gone, as the industry has become Fortune 100. And that’s understandable. But for, you know, an upstart like me, that entrepreneurial spirit was very attractive.
ARENSTEIN: Your analysis is very interesting, Paul. I’d say maybe the only remnant of that kind of cable cowboys, as they used to call them, is ratings today and cable programming today, where again, on a network — on a broadcast network, if you have a slight dip in ratings or if your ratings are poor, the rope is very, very short. The length of time you get to experiment with more shows is very short. As compared to with cable, which is still much — in my opinion, much more experimental and entrepreneurial, in terms of programming.
GLIST: Absolutely. And because there’s the dual-revenue stream model, and because there is the bundle of programming that allows different audiences to pay for what they value most and get this wide array at what I will still defend as a reasonable price.
ARENSTEIN: Okay, fair.
GLIST: But the bundling and the dual-revenue stream allows audiences to be served that would never be served under a mass advertising model.
ARENSTEIN: Agreed.
GLIST: I think today, TV One is a good example, where wildly successful shows for a particular audience would never have been financed if you had to sell it to one of the big networks.
ARENSTEIN: So I can’t resist asking you. We’ll get off the legal and regulatory track just a little bit. When you have time, are you a TV watcher? Are you a cable watcher? Are there particular programs that you like?
GLIST: Oh, well…
ARENSTEIN: It sounds like the answer’s yes. I’m just betting here, I don’t know. I’m fishing. I don’t know.
GLIST: I know you’re fishing. Here’s the — self-deprecation is always good. So I sit down with my poor, long-suffering wife on the couch with the remote control in my hand I start going through and I complain that I find nothing to watch. And she says, “What are you talking about? I am never at a loss of finding something to watch.” I am incredibly impatient when I am scrolling through the dial. I say to her, “Karla, it’s the technology that I love. I love building the infrastructure. The programming, for me, is a nice to have.” (laughter) So, I’m sorry to say my secret vices are things like Dr. Who reruns because I was a boy in London when it aired. It makes me feel nostalgic. But there you have it.
ARENSTEIN: Huh. Because it’s interesting because I’d never really heard an analysis of sort of the regulatory scene the way you were composing it, It just seemed to me that, oh, this is somebody who really cares about having a lot of different voices on the screen, and probably loves one or two obscure programs that, as you said, wouldn’t be around if not for something like cable. Tell us about your home life. Where do you live now? You’re based in Washington, DC.
GLIST: I’m based in Washington, DC. I’ve got offices in other cities as well. I live in Alexandria, Virginia. Empty-nester now. The kids are settled, one in Denver and one in Austin. Great cities to visit, I might add. So, all’s well.
ARENSTEIN: So at what point — I mean, again, you were not at cable at the very beginning, but pretty early on, maybe the adolescent years. Was there any point where you said, “Oh, wow, this industry has changed?” To your point earlier, in terms of the size and the magnitude of it, and the dollars, which kind of bring in more and more regulation and more and more legal requirements, etc. Was there a point where you looked back and said, “Wow, from these little mom-and-pop deals that we were doing, this is getting really big?” Was there a point?
GLIST: Well, certainly when I started practice, the penetration was relatively low. And so some people regarded it as a niche practice. I was practicing in a law firm that probably had more broadcast lawyers than cable lawyers at the time. So there certainly was — there was a change, but I think for me, I was trying to fight the fights to keep the path clear for this industry to develop. And so there were basically two developments that, to me, reflected the emergence of this industry into a major national player. Any new industry that’s disruptive is going to attract opposition, and so it attracted opposition from the utilities. I had to fight a lot of fights that we can get into later about getting the physical plant up on the poles. But, it also faced a lot of rent-seeking from local governments in the franchise process. So in the earliest days of cable, franchising was basically something that one undertook in order to get the right to operate in the public right of way. And certainly in many rural communities in the early years, they were sweetheart franchises that put very few demands on the operator, and they were easy to manage. But as the cable industry began to develop suburban and urban markets, the demands from local franchising authorities began to escalate dramatically. And so, we had to simultaneously combat efforts by the utility industry to either kill or co-opt the business, and efforts from the local franchising authorities to saddle it with so many costs that it would have been uneconomic to actually develop to its full capacity. And those — it was fighting those fights that really awakened me to the size and scope of this industry.
ARENSTEIN: At about what time, would you say that — what years, would you say, would that be?
GLIST: Well, on the first point, the utility resistance, it certainly predated my entry into the business in ’78. AT&T wanted to co-opt the business by only building a plant that could be leased to an operator under a tariff promise to never compete with the phone company. And then, the independent telephone companies around the country were trying to get into the cable business themselves, and they made it known to local franchising authorities that “That independent cable guy’s never getting on my poles. You better give the franchise to me.” So, there were those fights that predated my entry. I had the fortune, or misfortune, to join the industry in ’78, when the pole attachment law was passed, the first federal act of Congress that addressed the cable industry. But that, at least, gave us the tool to discipline the overreach by the utilities. And so I had to fight all those fights. “Yes, it applies to your contract, utility, even if it was signed before this Act.” “It’s not an unconstitutional taking of your property.” “This formula that we developed at the FCC, it gives you fair compensation.” I have to say that in fighting that, one of my favorite cases, which I think helped — I’d like to say helped usher in a new age for cable — was Heritage. This was in — it took until ’91 to get a decision, but it was bubbling up before then. So the issue was this. Both the cable industry and the utility industry had discovered fiber optics. And one of my clients was in Dallas and the Dallas suburbs. And the Dallas Morning News had a problem. Their editorial offices were in downtown Dallas and their printing plant was in Plano. And we knew that we could overlash fiber to the existing support wire that sustained the coaxial cable and get them instant two-way communication between the editorial office and the printing plant, which would simplify their life enormously. I had to design this strategy — it’s one of the luxuries when you work with smart clients, that you can set your facts up, real facts, in a way that are going to help you in litigation. So what we did was we integrated a fiber run from the Morning News to the printing plant in Plano, integrated that fiber into a combination fiber/microwave backbone across the metroplex. We put some video over it and we put a lot of data over that line. And the utility took the position, “You cannot do this because that’s not what cable does. You’re not a cable company anymore.” And so, I had to go to the FCC and then all the way up the appeal ladder and got a ruling. It’s the first federal ruling that cable could use fiber, and it could run non-video services, and still remain a cable company with all of the attendant regulatory advantages that that offered. And so Heritage became this bedrock for the diversification of cable into non-video businesses. And so I’m very — that’s one of the highlights of the pole front, although there were a lot of pole wars.
ARENSTEIN: Yes, of course. Could we talk a little bit, would you be able to talk a little bit about some of the people? Again, we touched on some of them but some of the people who are involved in some of these deals and some of the regulations and some of the folks that you’ve met? I would think you’re kind of like a walking museum of cable here.
GLIST: I’ve been called worse. (laughter)
ARENSTEIN: So I want to get some reminiscences of some of the people that you worked with, and maybe some of the people you worked against.
GLIST: First of all, on the legal front, I have to point out Gary Christensen. He was a South Dakota boy who went to the FCC and started doing cable television law there, and then eventually ended up at Hogan & Hartson in the cable practice there. I came under his wing when I was a pup. And he was a fabulous mentor. He had taught me how to practice world-class law with civility, and humility, and good humor, and to treat your adversaries with great respect because they were going to be your allies someday. And he introduced me into the cable world and to all of the great entrepreneurs. And on the client side, so many deserve mention, but Amos Hostetter was one of my favorites, a brilliant man. He built a fabulous company in Continental Cablevision. He introduced a lot of innovations in the business, in the management structure. I learned a lot just by observing how he worked with people inside his company, how he worked with local franchising authorities. Bill Arnold, in Texas, classic cable guy, basically, you know, out of the field into the regulatory arena, and a born Texas lobbyist. I worked with him on just about every issue that could arise at the state and federal level. Dick Green, who ran CableLabs for 20 years at least. And, of course, turned that into a vehicle not just for seminal research and development — It was the platform for launching DOCSIS and the internet as we know it. But also, he was enlisted into many of the regulatory wars that were going on in Washington. It was my privilege to work with him on many of those wars. There is this chronic problem with a regulated technology business like cable that a lot of the regulators neither understand the current technology nor the direction that it can go in, left to its own devices, but are ready and willing to exercise their power on you. And so Dick and I, and the folks who reported to Dick, had to fight a lot of those fights — on the Hill, at the FCC — in order to try to protect against micromanagement of the business. I should also mention Dan Brenner, who is a lawyer but a client. The late Dan Brenner, dear friend of mine.
ARENSTEIN: Yeah, mine, too.
GLIST: He was a superb strategist and lawyer. Didn’t hurt that he was a stand-up comic —
ARENSTEIN: No, it didn’t!
GLIST: — because we need a good sense of humor in this business to get through a lot of those dark moments, but he also was a wonderful client to work with through countless regulatory proceedings. I think I worked most intensively with Dan first when the ’92 act was passed. And because the industry had pursued an unsuccessful strategy of expecting it to be vetoed, we didn’t shape the contours of that law as you might ordinarily do on the Hill. And so we were saddled with this draconian over-regulatory piece of legislation that ended up costing us four years of development, and four years of infrastructure growth, and four years of programming, all the rest of it, not to mention the horrible rate-reg proceedings, just to name one out of many sets of rules. But I partnered with Dan and a few others in helping the industry get through all of that with some creative strategies that helped recover from what was one of the nadirs of its regulatory history.
ARENSTEIN: You know, Dan said something about you that I want to read here. He said, “Paul has been involved in virtually every major issue facing the cable industry, and he’s a splendid attorney, with a tremendous expertise in technology.” I think we’ve heard that today. “He understands the day-to-day operating issues in a way few people do.” That was the late Dan Brenner, who passed away a few years ago, as a judge in California.
GLIST: Yes. Well, I take it with all humility. I loved Dan and he had a brilliant mind, I was happy to work as his partner for so long.
ARENSTEIN: And he was so fast, too. It was like sparks coming out of his brain. Let’s move on, here. We were talking about the ’80s, we were talking about the early days of your career. Today. Let’s talk about what you do today most of the time. Obviously, there are still — actually I think there are somewhere around 1,000 very small cable operators in the country today, believe it or not. Some have 100 customers, some have fewer than that. What occupies your time mostly today?
GLIST: So, I have to say that over the last few years, my time has been almost monopolized by some large proceedings that affect the entire industry. And so I’ll take one as an example, it has to do with set-top boxes. Cable systems, as they grow more sophisticated, they basically built themselves out as end-to-end computer networks. There was the headend that had most of the smarts, but there were smart devices in the home that had to communicate with that. It was that architecture that enabled tiers of programming, and video on demand, interactivity, and apps to show up, and smart electronic program guides, and the X1 platform, and all of the rest. But the presence of the set-top box itself became a point of contention when Circuit City, God rest its soul, decided that, “I’m not too keen on the fact that I can’t sell set-top boxes on retail shelves.” Which I get. The evolution of the industry was a roll-up of many different technologies sourced from different vendors, and so there was no universal solution that one box could work across the country. So they obtained a law that required the FCC to work on building a retail market for set-top boxes. And through many twists and turns in the early 2000s, I worked to negotiate a deal with the consumer electronics industry that had a couple of steps in it, but the first step was, take the security that is present in the set-top box, put it into a little card that can fit into the back of a TiVo, for example, today, and then we’ll work on more of an apps-based solution going forward. That was the deal in 2002. And we lived with that for many years. But this is, again, the hazard of being a regulated business. The consumer electronics industry, as the internet grew to be capable of transporting video in high def, began to think of this law as maybe a key for shortcutting their entry into the business of distributing copyrighted entertainment programming. And so, while we were trying to do deals — and actually reached deals with them, reached a deal with Microsoft on how to get content onto a PC and into the Microsoft home domain, and we worked on a so-called two-way deal with big TV manufacturers that would allow the full boat, the guide and VOD and everything else to run. There was a pivot point in about 2009 or 2010 when the consumer electronics industry said, “You know something, I think I can get something — a favor from the Federal Communications Commission.” And so they basically said to the cable industry, “We’re not doing that. We’re going to go to the government and see if we can get a solution that will basically take your programming and unbundle it and give it to us to repackage as our own product. And we can mine the data, and we can put ads into it, and we can brand it as our own, and we don’t have to negotiate those intricate copyright licenses with the content owners, nor do we have to respect them.” Well, that was problematic for a lot of people, as you can imagine. And so, in 2010-2011, we fought that to a draw at the FCC, and we went on to do what we told the FCC we were working on anyway, which was to build up apps. And so in between 2011 and now, you saw the explosion of cable apps on smartphones and tablets and smart TVs and gaming stations, and Rokus, and you name it. And these were all ways to get the product, the full product, without a set-top box, which is what the cable industry wanted. We don’t love set-top boxes. We love audiences. And yet, the FCC, under the outgoing administration, made another run at this for trying to give Silicon Valley this favor that Silicon Valley was wanting. Silicon Valley wants to be a multichannel video program distributor, but they don’t want to deal with the copyright owners. And so for the last two, three years, the majority of my time has been addressing that issue on the Hill and at the FCC. As we sit, it looks like it’s been fought to a draw again. We don’t know. One never knows. This could rise from the grave again in a few years, but I’m hopeful that an administration that has greater faith in the market and greater faith in technology to find its own way will look around and say, “Wait a minute, these apps have evolved on their own through business necessity. Consumers don’t actually need to rent a set-top box if they don’t want to.” If they reach the conclusion that the market’s actually worked well, as I said at the start, cable does very well. Because we actually want to serve the consumer on the device that the consumer chooses. We just have to do it in a way that respects all those intricate copyrights that we have to negotiate and respect.
ARENSTEIN: Are you upbeat about the possibilities or the potential for this to work out in a way that’s favorable to cable? I’m not speaking about the Administration coming in necessarily, but just, a man of your experience, are you upbeat about it or are you unsure about it? As you said, it’s kind of at a draw right now.
GLIST: I’m upbeat about it. I think that as long as this law is on the books and has not been sunset under its provisions, people will periodically make a run at it. There were plenty of efforts over the last couple of years to make a run at getting some rent from the cable industry. Some people made a run at getting subsidized transport of their data from 5G cell phone towers to wireline facilities. People have prevailed upon the FCC to adopt a privacy rule just for internet service providers that basically leaves the market for tailored programming and tailored advertising and so-called two-way markets over to the edge. And so, there’s plenty of rent-seeking going on with the FCC. But it’s been my observation that yeah, regulation ebbs and flows, but in the end, technology prevails. And because the cable operators have constantly reinvented themselves in order to serve audiences as they are today and as they are evolving, it’s going to happen in this little narrow issue of set-top boxes that I use for illustration. We went from broadcast retransmitters, where we were fighting over who’s must-carry and who’s not, you know, can I get a waiver of nonduplication rules or not. And we’ve moved the platform forward. We invented the internet as we know it. We’ve continued to pour investment into — 250 billion from cable alone, in the infrastructure that supports broadband today. And not stop with DOCSIS, many generations of DOCSIS, full duplex DOCSIS, meaning equivalent speeds forward and backwards. Last night, this morning, the news broke that Cablevision is going to take fiber all the way to the premise. This is standard for cable. You go from coax hanging on poles to hybrid fiber coax to dropping the amplifier cascades, to going to node plus zero, going full duplex DOCSIS, to fiber to the prem. And simultaneously, you’re inventing parallel methods of distributing your service in IP over wireless, and to customer-owned devices. That’s the entrepreneurial spirit that attracted me to the business in the first place. It’s still here.
ARENSTEIN: Wow. That’s a great answer. So, you know, my next question was going to be, when you talk to a young lawyer today and he or she says, “Gee, I’ve followed your career and you were in cable in the early days, and you’ve done all these landmark cases, and here we are today, It seems like all the battles are over.” Which they’re not, of course, but it seems like they are. So my question is do you counsel people? Do you counsel a young law student to pursue a career in cable law? I think the answer is yes, based on that very enthusiastic speech.
GLIST: If people are already lawyers, know they want to be lawyers, then by all means. I counsel that them that the cable industry is not the sleepy, yesterday monopolist that many people say it is. We have ourselves as an industry to fault for not telling the message clearly enough. But it is not the case that all innovation takes place in Silicon Valley or at the edge of the ‘net and no innovation takes place within the cable industry. If people reflect upon this enormous programming array, the broadband speeds and throughput that are offered, the new business models, the effort — however slow — the efforts by the industry to negotiate with Hollywood to get more choice in bundles, thinner bundles, more choices in ways that protect copyright, don’t break the economics of the golden age of television, the new golden age of television, we’re doing all of that. You, as a lawyer, not only can you be part of that, but you can come up with a bright idea, and this is an industry that will actually listen to people and try new things. I’ll give you a case in point which is not pure communications law, if you don’t mind.
ARENSTEIN: Go ahead. Yeah.
GLIST: Not many years ago, the Natural Resources Defense Council began to worry about the energy consumption of set-top boxes, and they began to go around to the state capitals asking for state legislation on the boxes. I would follow them around, writing opinion letters saying, “Wait a minute, you forgot about these three cases that I fought for, that preempts the states from regulating technology in the cable area,” and so they were kind of stymied at the state level. They turned to the federal authorities and they began to get the Department of Energy interested and the California Energy Commission interested in it. Well, both of those agencies have a legitimate interest in energy conservation. We all do. But, their models were based on refrigerators that you buy. There are five basic chassis of refrigerators. You put them in the kitchen, they last 10 or 20 years, they’re not connected to nothing, they never change. I can set an energy spec for them and if you need any changes over time, come get a waiver from me. And, you try to apply that model to the cable industry where boxes iterate with firmware updates almost overnight. They iterate with generations of hardware every 18 months. And those boxes are the delivery vehicle for networks that are changing hourly and offering new stuff, inventing new services. They don’t match. So what do you do? So I put together a consortium of all of the cable operators, satellite companies, telephone providers in the United States and their equipment suppliers, and we all agreed to do something that had never been done in the US: a voluntary agreement on energy conservation for set-top boxes. And we created energy standards. We created a process for people to invent stuff without permission. We created a steering committee. We brought NRDC [National Resources Defense Council] and ACEEE [American Council for an Energy-Efficient Economy], another energy advocate, on to the board. And not only has it worked, in the first three years, it saved over a billion dollars for consumers. It’s on track to save a billion a year. It’s saved over six million metric tons of CO2, greenhouse gases, just in the early years. This has received bipartisan praise from the Hill. They said, this is exactly how we should address problems. And the advocates are happy. The Department of Energy held a press conference to bless it. And this came out of a lawyer’s head. All right? And so, you can conceive, lead, and execute a platform to solve new problems in very creative ways. That’s a lot of fun. And you get to do social good at the same time. And, you get this win-win. You get energy conservation and you preserve the path for innovation. So, you don’t have to go to the refrigerator regulator and say, “I want to invent 4K. I need a change in the law, and by the way, I have to go public with it and my competitors will know I’m about to launch.” You don’t have to do that. You can hit the market with the new invention and we have all the procedures in place to do it in an energy-efficient way without that kind of lag that innovative technologies can’t stand. And so, there are going to be so many new challenges going forward that I think someone who wants to be a lawyer couldn’t ask for a better business to work with because this has always been a business that has looked for — we know we’re regulated, but we have creative ideas of how to handle the underlying interests in the regulation, find win-win solutions where all the stakeholders can walk away happy.
ARENSTEIN: I’ll tell you, you know, when you were speaking, I just had to think that “Well, this sounds like a cable Vanguard-type speech,” and sure enough, you are a cable Vanguard honoree. In fact, I think you’re the only outside counsel to be awarded a Vanguard.
GLIST: Well, I broke the glass ceiling. (laughs) Yes, I was the first outside counsel to receive a Vanguard. I can’t tell you how honored I felt to be in the company of so many greats in the business. That was totally unexpected but greatly appreciated. I’m no longer the only one. But yes, the —
ARENSTEIN: Okay. You were the first.
GLIST: — industry was good enough to award me with a Vanguard. I think that was 10 years ago.
ARENSTEIN: Yeah, it was. It was 2006.
GLIST: But I’ll still bask in the glory anyway. (laughter)
ARENSTEIN: Okay. And then, a couple of years before that, you were named to be a Cable Pioneer. I know that’s kind of a difficult honor to receive because I believe, what, friends of yours or people who have done business with you are not able to nominate you. It has to be somebody outside that circle.
GLIST: But somehow, I passed the gantlet. (laughter) Maybe I just hung around long enough in the industry. But yes, I was also very honored to be named a Cable Pioneer.
ARENSTEIN: Paul, there are a couple of areas that you have done sort of slightly outside cable, and one of them that I wanted to touch on was the Tahirih Justice Center that you — you joined the board in 2008, and you’re currently the chairman. Tell us what that Justice Center does and whom it helps.
GLIST: So, the Tahirih Justice Center is a national organization that is devoted to protecting immigrant women and girls from violence. And the kind of violence that we’re protecting against is female genital cutting, honor crimes, that people will be seeking asylum for in this country — they need help in getting that. Domestic violence within the immigrant community — it’s often difficult to even report that, if you fear your immigration status. Mail-order brides being sold into the homes of known abusers — we got a federal law passed to protect against that. Forced marriage of US-born teenagers, who are told at 14, “We’re shipping you back to Pakistan to marry your 50-year-old uncle. If you don’t go, we’ll kill you.” So there’s a host of issues that women and girls need protection from. And we’re the only national organization that focuses on this community. There are many people who have all of their citizenship rights intact already, and they have access to resources, but this group has no other recourse because of the way US law is set up. So we provide the legal work at the retail level, we provide the policy work at the legislative level, on the Hill, in state capitals. We provide social workers for them, to help them through the adjustment issues. We provide medical care for them. We take them through the entire process and — this is extraordinary, but we have a 99 percent success factor in litigation. I wish I had that in my commercial life.
ARENSTEIN: How did you get interested in this, Paul?
GLIST: Well, I became aware of this when the founder was actually a law student. It appealed to me, because it’s grounded in principles of the equality of women and men, and the principle of human rights, and the principle of access to justice. And for me — I’m a Baha’i — these are spiritual principles for me. And so when an organization is formed that is inspired by that same spirit, then I want to be a part of it. I became a supporter early on, eventually ended up on the board, and here I am, chairing the board. But it’s — I have to say that I take a lot of pride and pleasure in the work that we do. We’ve helped 19,000 women so far. We’re coming onto our 20th year next year of service. And we have just — as we tape, we’ve just come off a presidential campaign with some very heated rhetoric that at the very least presents uncertainties about the protection that the immigrant community will enjoy, even under existing US law. So I say, now, more than ever, we need the work of the Tahirih Justice Center.
ARENSTEIN: In 1984, you started teaching a course at the Practising Law Institute in New York about cable television and communications law. What is the Practising Law Institute, and do you still teach today?
GLIST: I do. Practising Law Institute is a nonprofit that is devoted to providing continuing legal education to other practitioners. I started teaching cable law and different slices of it. Sometimes it was franchising, sometimes it was renewal, sometimes it was rate-reg at the height of the ’92 Cable Act, privacy, where technology is going, which is what I currently teach for PLI. And for me, it’s a great joy, because it gives me the opportunity to teach without grading papers. (laughter) That’s a wonderful joy to do that. And at its best, PLI is a highly interactive exchange among very sophisticated and opinionated practitioners, and that’s fun.
ARENSTEIN: Paul, we want to end on a couple of sort of legacy questions, although you’ve really touched on so much legacy material, it’s been great. I guess one of the things that I take away from this interview is that at some point, you and other legal minds looked at technology and concluded that there’s absolutely no way we know where it’s going, so we have to prepare legally for that. You have to, when you draft something, or you draft a regulation, you have to leave it open enough so that it can adapt to new technologies. What new technologies do you envision, coming down the road? What excites you? What sorts of — are there pie-in-the-sky dreams that you would like to see from cable?
GLIST: So, this is the fortunate thing about envisioning the future, is that we never do accurately. And so the things that all of us can see — that the cable industry is going to have a mobile feature, whether it’s MVNO on the wireless side, or federated Wi-Fi that covers large and small operators — all of that is going to be put in place so cable operators will be able to offer the quad play. We are the platform that can offer the home for new programming that cannot be cultivated on a broadcast channel. I think there are many, many more opportunities for that, with virtual channels and VOD and the way that VOD is offered today with the opportunities for binge viewing if you want to go to the next series, it’s almost quasi-linear in that way. That’s all conventional thinking, what I have just described to you. It’s the unknown. And cable operators — you know, I take a lot of pride in what they’ve invented. But cable operators are also fast followers and fast responders. So that when a new way of doing business emerges, we are able to actually execute on it and put it into play on a very large scale, an economically efficient scale, and to do it in ways better than many others. And so whatever that is going to be, whether it’s the perfectly skinny bundle, whether it’s a new way of doing VOD, whether it’s immersive video, whether it’s broadband that allows the home to become virtually anywhere because the throughput is almost limitless, I don’t know. But these are the folks who are going to bring it.
ARENSTEIN: Another legacy question. What — I think you’ve touched on this several times today, but — what is a big story that’s a big cable story that hasn’t been told, that needs to be told?
GLIST: It’s retelling the story of how cable has invented so much of what we take for granted. And we owe it to ourselves and we owe it to the regulatory community and we owe it to the public to explain… We need to explain that there is no cloud. That internet is not free just because you can pick it up at a coffee shop. That programming is not free just because you don’t see the price yourself. And all of that is an explanation that we owe. But I think there’s also something on — you alluded to Net Neutrality. I think this is a going-forward issue that we need to tell the story on. The cable industry has never been opposed to letting internet customers get wherever they want to on the net. They have not been the ones who block sites or bring it down to a trickle. Quite the opposite. We’re the ones who keep expanding the sites, and expanding the capacity. If anyone’s doing the blocking, it’s programmers at the edge of the net who are actually blocking internet delivery of their programming to gain leverage in cable distribution negotiations. So there’s all that. But you can, and we will as a society, come to agreement on general principles of no blocking, no throttling. But one does not have to kill the future of the internet by going as far as the last administration has gone. And they’ve done a couple of things that are very dangerous and need to be undone. One is, they’ve said that no one on the edge of the ‘net may pay an internet service provider for the delivery of content to an internet service customer. And that’s called destroying the two-sided market. You know, if you pick up a newspaper, you may be paying a subscription for the paper, but the advertisers are also paying the paper to reach you. And there’s nothing even in the old telephone world that prohibited 800-number calling. And when I think about the future of the internet, there should not be a rule that says that an immersive game cannot sell its product to the public with high-throughput internet built into the price and the gaming company is the guy who picks up the freight. There’s no reason that a green appliance should not be sold with permanent internet connectivity at a trickle built into the price for smart management of energy. There are so many business models that rely on this two-sided market and the Net Neutrality rules that were just adopted outlaw that. I think that is a terrible moment of micromanagement that’s actually going to stop the internet’s natural development towards more and more optimal models. I think that’s a problem. It’s a lack of regulatory humility that gets you there. So I’ll draw this analogy. I know you’re trying to get to the legacy question. I approach my legal practice with the understanding that law can contribute, but it is part of an overall solution. The overall solution, to get a complete answer, it has to fully account for policy and finance and business and tech and consumer relations, and all of that has to factor into the total solution. Law’s a part of it. The same should be said by regulators about regulation. That regulation can be part of a solution. You know? But you’ve got to recognize that you as the regulator, you have not created the value of the cable industry. You have not created the value of the internet. And you need to start with the understanding that you may have a role to play, but it’s a measured role. And you need to start from the do-no-harm philosophy. And then take it from there. And have respect for the wisdom and the entrepreneurial spirit and vision of the guys who are actually out there in the market, in the technology, who are inventing the future. You know, the cable guys I grew up with did that for a generation, and the current generation of cable guys are doing it again. And there needs to be a healthy respect for the wisdom in this industry. Industry’s willing to work with regulators. But everything’s got to reflect that balance.
ARENSTEIN: Paul Glist, thank you so much. This was a lot of fun!
GLIST: It’s been a pleasure.
ARENSTEIN: This was great. Thank you.
GLIST: Thank you, Seth.
