Interview Date: April 28, 2014
Interview Location: LA Convention Center, Los Angeles, CA USA
Interviewer: Stewart Schley
Collection: Cable Center Collection
Schley:: I’m Stewart Schley for the Cable Center’s oral history series. It is April 28, 2014, if I have my date correct (pretty sure I do.). We’re in Los Angeles on the eve of the 2014 Cable Show. To my right is a gentleman who played a seminal role in the development of the cable industry and continues to do so in the broader telecommunications industry, Bob Schmidt. Welcome!
Schmidt: Thank you very much.
Schley:: I can’t believe we haven’t yet interviewed you because, as I said, you had a major role to play in some of the formative years of this industry. So we’ll talk a little bit about that, what that was like and what some of your endeavors are today.
Schmidt: I look forward to it. Thank you.
Schley:: I looked this up. I cheated…I looked this up before you came in the room, but in 1975, the number one hit song was Captain and Tennille, “Love Will Keep Us Together.” So it wasn’t a great music year. It was a big year for you and I want to just kind of walk back down memory lane, Bob, and you had been invited, I don’t know how, maybe you can tell the story…to become president of what was then called the National Cable Television Association. What brought you there?
Schmidt: I think you’ve got to step back a little bit to kind of figure out how the process brought me to the forefront. I was very fortunate. I came to Washington in 1961 to work for President Kennedy and was in law school at night at Georgetown Law School. After fits and starts I walked away from that but then concluded later on…because I went to work for ITT in 1965. I was with ITT almost ten years. And it was a great period for me because ITT was one of the new conglomerates. We owned everything from Sheraton Hotels to Avis to Wonder Bread. It was this mixture of whatevers, you know. In 1970, I had the good fortune to get to know Coach Vince Lombardi. He was out of retirement and was now coaching the Washington Redskins. He coached one year and the following year unfortunately he contracted colon cancer and never finished the second season. He was in his hospital room at Georgetown watching the team practice on Georgetown’s campus.
One of my closest friends, and still is, is one of the great Packers who’s in the Hall of Fame named Willie Wood. Willie Wood lived in DC in the off-season and another good friend of mine was Sonny Jurgensen. So I got a chance to sit down with Coach Lombardi and I said once he passed away, we cannot let his memory fade. So we started the Vince Lombardi Foundation in 1971. So now I’m running that and so on and Jay Ricks, who was a lawyer in DC and was a friend of mine, he comes to me at some point in early 1975 and he says, “Bob, would you be interested in taking a position?” I had left the company and was out practicing law with a handful of athletes that I represented and so forth. I said, “What is it?” He said, “It’s the cable television industry association.” I said, “Jay, with all due respect, I think you got the wrong guy on two counts. I don’t like trade associations and secondly, I can’t spell cable television.” So he said, “Just meet with us.” He invited Hostetter, got me aside for lunch and gave me the pitch and everything.
So I started thinking about it and I said, Washington in those days was really a very different place than it is today. Whether you were a Democrat or a Republican wasn’t the issue. It was your relationships. And one of my close friends, who was like an uncle to me…he wasn’t really a mentor but more of an uncle…was Dean Burch. And Dean Burch was the chairman of the FCC. Here was Burch, a Goldwater Republican, and me, a Kennedy Democrat. But we were very close friends. We spent a lot of time together. So I went to see Dean. And I said, “Dean, I’ve been approached by this group to head up their association.” He said, “What’s the name of it?” I said, “I think it’s called National Cable…” He didn’t even let me finish the sentence. He said, “I will break both your legs before I let you take the job.” And he went on for about ten minutes with a lot of deleted expletives. And I said to him at one point, “Dean, how do you really feel about it?” Now I understood at least halfway their problem.
Schley:: What was his objection?
Schmidt: He just thought there was a lot of misrepresentations, a lot of double talk. And again, you’ve got to understand at that point in time, the broadcasters owned the FCC. That’s rude thing to say, but they did. And it was evidenced as I found out later about all the various barriers that were up in front of the cable industry in terms of any kind of distribution prospects. So that was my first shot over the bow. Then I think it was the press conference when I agreed to do this. We were at the Sheraton Carlton, which was my old stomping grounds with ITT. I had my bride with me and I think at that point I had three kids and I’m having this “welcome to the cable industry.” In the middle of the press conference, I’m getting bombarded by a bunch of very negative…”What are you going to do about copyright, Mr. Schmidt?” I was like, “Excuse me. I’ll study it.” “When are you going to give us an answer?” I remember my wife said to me, she said, “Are you sure you want to do this?” I said, “Well, I think I’m pregnant now, I think I’m in the ballgame.” So that was my baptism.
Schley:: What swayed you? Why take the job?
Schmidt: I have to back up another half step. So I’m going through the search committee interview and one of the members of the search committee, who’s still alive, I think, Monty Rifkin, at one point ?abrased me. It’s all right…I’m a guy who loves competition and good probing questions. He said to me, “What’s your net worth?” And I looked around and said, “What’s that got to do with the price of tea?” I said, “If you need to know my net worth to qualify for this job, I’m in the wrong place. And I don’t know if that helped me or hurt me but I just thought it was one of those kind of questions that was off-the-wall. At that point one of the guys on the search committee came to me—who later became one of my best friends, Doug Dittrick—and he said, “Just stay cool. Just don’t jump off the reservation at this point.”
Schley:: But you know you had all these mercurial guys.
Schmidt: Oh, yeah, I mean it was really—someone ought to make a reality show about it. There were more characters per square foot than any people I’d ever been around. But anyway, needless to say I agreed to do it.
Schley:: And first day, first week, first month on the job: what are you grappling with? This is 1975.
Schmidt: It’s 1975. I inherited a staff, most of whom were just good people. And you’ve got to understand as a former football player quarterback, I’ve always been a team person. And I’m always taking the attitude, “I’m not here to micromanage people. I’m here to try to see them develop their own talents and bring their best game.” I think I was there the first week and there were three lawyers on the staff. They can identify themselves at the appropriate time. They walked into my office and closed the door. And they said, “Bob, we need to talk to you about a serious problem.” I said, “What is it?” He said, “Well, your predecessor David Foster promised us this and promised us that.” I said, “Really? Let me ask you a question. Do we have a union here?” They said, “What do you mean?” And I said, “Well, the three of you are in here to see me. I suggest you walk out of here as quickly as you can. If you want to talk to me about something, you come and see me individually.” OK. That was my first sort of baptism.
Then I had an individual on the staff who was kind of the principal lobbyist for Capitol Hill. And I knew about him before I got there, and it was not a very favorable kind of impression. I remember he started to tell me, “This is the way we’re going to do this, this is the way we’re going to do that.” And I said, “Slow down. Just give me your best recommendations and so forth.” It turned out he was a close compatriot of a Senator from Indiana who was on the Senate committee and I’m sort of saying, “How do I deal with this issue without shooting myself in both feet?”
So the way Washington has always worked for me was again relationships. The chairman of the full Commerce committee in the Senate was a good friend of mine, Fritz Hollings from South Carolina. So I went to see Fritz and I said, “What’s the likelihood of this Senator being chairman of the Communications subcommittee?” In his classic Southern accent he said, “Bob, over my dead body.” Now that’s all I needed to know. So I went back to the fellow and I basically gave him his walking papers. Within an hour I get a call from this Senator, yelling at me on the phone. “You better call this guy and apologize to him. You better…” And he went on. And I said, “You know what? Senator, with all due respect, if ever I had a situation like this, I’d want somebody like you in my corner, but unfortunately it’s not going to happen. Thank you.” And that was the end of that.
Schley:: Well, I mean you walked into this situation where the industry was really young, right? As you said, the broadcasters having enormous influence, the telephone companies I think had enormous influence—
Schmidt: Right.
Schley:: Where did you start? What were some of the key issues? And how did you begin to—
Schmidt: Well, first of all this copyright thing was like the bugaboo of bugaboos. We had a very divided constituency. We had the small operators who watched the Supreme Court say we didn’t have any obligation for copyright and they said, “That’s it. That’s all we needed to hear.” There was no copyright obligation on the part of this industry.
Schley:: And Bob, this involves importing broadcast signals?
Schmidt: Correct.
Schley:: Distributing them to your customers. Do you have to pay royalty or not?
Schmidt: Right. But then there was the other side of this coin that was the Viacoms and the people who saw this as the window of opportunity who were saying, “Let’s get this behind us.” And then, when you started to analyze the issue and you saw that the FCC had these very cobbled goofy rules about you couldn’t show this program on the third ?octave of the fourth week of November. I mean, it was just bizarre. So I started to understand the issues and then I started to understand who were going to be my adversaries. Well, obviously the NAB and they had a great guy running it named Vince Wasilewski. And then we had the Motion Picture Association with Jack Valenti. So those were the key players in terms of what I call the business side of the equation.
Schley:: Would they have just assumed you’d go away, that the cable industry wasn’t even around?
Schmidt: They were going to do their best to make sure it never happened. If it had any future it was going to be in rural America as an antenna service providing access to broadcast signals in the major markets distributed out in the rural part of the U.S. And I remember HBO had just come forward at that point and I remember Dick Munro and Jerry Levin came to see me and they said, “Bob, you’ve got to get out on the stump and promote this.” And I said, “All right, give me the script of what you want me to say.”
I remember literally different forums and different state associations. I’m down in Mississippi and I’m up there giving this pitch about this HBO thing, you guys are going to get movies and blah-blah-blah and I’m going on. At some point some guy stands up and in a Southern accent says, “Bob, in all fairness, that dog won’t hunt down here.” And I said, “Wow. That’s a dead statement, isn’t it?” A year later I’m back there with the same people and they’re popping their suspenders saying, “Doggonest thing I ever seen. This is the greatest thing since sliced bread, you know?” So it was all about innovation and taking people past the barriers that they all thought were completely going to impair their future.
Schley:: I mean, it’s interesting because you spent some time here in this city as a quarterback for the Trojans and you carried this team ethic with you. But those were hard battles to fight. When I read your history over the four-year tenure that you spent at NCTA, you really brought this industry into a level of respect on the Hill that it didn’t have.
Schmidt: You know, I appreciate you saying that, Stewart. And I’ve always felt this way. I grew up in what was then a rural community called Bakersfield, California. And when you grow up in Bakersfield, you learn some things very early about a work ethic and you learn things about getting along with different people. I don’t know if you know Steinbeck’s book “The Grapes of Wrath;” it was largely about Bakersfield and Salinas. And you had this issue of diversity where we had the folks that had come from that area who were nicknamed Okies, then we had Blacks, then we had Latinos. I went to a public high school with 5,500 students. We had race riots. And we created an organization called the Interracial Council. I was on it and I’ve always understood that controversy is an opportunity to take something to another level. And I’ve always been fighting bullies all my life and I thought the broadcasters were bullies and I thought the Commission was bullying us so I loved it.
And I think early on, I think it was that first year, I get a call from Ted Turner. He’s somebody I didn’t know from a load of rocks. He says, “Would you go to the FCC with me?” And he starts telling me, “I want to create this thing called a superstation.” Now he got my attention. I said, “Let’s do this.” So he comes to town. I’m pretty sure this was either the first time he was ever at the FCC or maybe he had some interaction through his lawyer. So there was a very well-known restaurant in D.C. called Duke Ziebert’s. Through my tenure with ITT, I had a lot of good relationships there. So I always had a table available for me there. Turner and I are in there and some people recognize him because he was Captain Courageous at that point, the sailor. They didn’t know him in the other part of his life. So we’re having this briefing and I’m kind of giving him what I think we should talk about. I said, “Here would be a classic example of a broadcaster and a cable guy working together.” I said, “So we’ve got to emphasize that.”
Anyway, Dean Burch had moved on and another friend of mine, who had worked for Tip O’Neill, who was one of my mentors, was the chairman, Charlie Ferris. So we arranged to have appointments. We were going in there; it was not a good day. It was not a good day. It’s hard to script Ted Turner. So we came out of there. I love Ted because Ted is “what you see is what you get.” But unfortunately one of the things that I found out that day very early was there wasn’t very much of a filter. So we finished our meetings afterwards and he said to me, “Bobby, how’d I do?” And I don’t answer him. We start walking away from the FCC. He said, “What’s wrong?” I said, “Ted. We had a script; you threw it away. If we’re going to work together, I don’t have any leverage in this town. I’ve got to cajole people, I’ve got to use the relationships I have with them. If we can’t do this, I can’t go with you.” From then on, we became buddies. I love the man. And he’s very coachable. But it was that kind of situation.
Schley:: I think you did solve copyright. Was that the establishment of the copyright royalty tribunal?
Schmidt: Yes, yes.
Schley:: That was the mechanism that made everybody not quite happy but sort of happy, I guess.
Schmidt: It was an incredible first step. I give credit to a lot of folks. I decided I had to make alliances. So I reached out to Valenti from the Motion Picture Association. I’d known Jack when I was an advance man—I worked for President Johnson as well. Jack’s passed now, but Jack taught me so many things about life in politics. And he also gave me a whole new vocabulary. The man could create words. We’d be testifying in the Congress and he’d come up with this new word and I’d have to stop and write it down because it was a good one. And so I said, “We’ve got to develop an alliance with them because if HBO is going to have product, we want them saying, ‘It’s OK.'” And that’s really how sort of the foundation was created. And the other good news was I had had this long term relationship through my prior experience with ITT with Lionel van Deerlin and Fritz Hollings, the Senator and Congressman who were in charge of our future. It was just—you know, timing is everything. I think the window was going to be open.
The question was whether we could do something that was credible. Interestingly enough, I think it was the second month I was on the job, we get an invitation to go to the White House. Now I didn’t get the invitation. The invitation was given to individuals. I don’t know how they identified them. So I have them gathered in the conference room in our offices and I thought I was in the middle of a free-for-all. There was a group there from Pennsylvania who said, “We’ll never pay copyright, we’ve got to do this, we’ve got to do this.” Then we had another group that included Bud Hostetter and some of what I call more of the futurists of this industry saying, “We’ve got to do this, we’ve got to do that.” Finally, at one point in the conversation—and I really was, I was learning the vocabulary at this point—I stopped the conversation. I said, “Have any of you ever been to the White House?” Nobody. I said, “I have.” And I said, “I’ll tell you what our goal is today. Our goal is to come off as credible people so we can be invited back.” And I said, “Now here’s the deal.” And I identified two or three people. “You’re going to speak, and the rest of you are going to shut up. If you choose the opportunity to take advantage of this opportunity and abuse it, I will invite you out of the room immediately.” And I said, “You understand?” We walked across the park and went to the White House. And it was an excellent meeting. People started to understand there was a credible thing called cable television. And it could provide an alternative platform. But it was like everything else. You had to put yourself forward in a positive light. It was a great thing.
Now the postscript to that was very interesting. There were a handful of trade magazines in those days. The trade magazine I get the following week has a letter on the cover of it from Russell Karp to me, chewing me a new backside. Saying, why wasn’t I invited? Blah-blah-blah. Never sent me the letter. Again, being shy and retiring, I picked up the phone and I called Russell Karp. I didn’t know him from a load of rocks. And I said, “Mr. Karp, my name is Bob Schmidt. I never got your letter but I read it on the front page of the cover of this magazine.” I said, “I’ll be in your office in the next three hours.” I jumped on a shuttle, I went up to his office in Manhattan. And I didn’t know who Russell Karp was again. Here’s a guy who’s my size, 6’5″, very strong personality. He’s sitting in his office and he has his counsel with him, Barry Simon. And I share with him, I said, “Lookit, I’m new to this job. If I had anything to do with it, you would have been at the meeting, you should have been at the meeting, but that wasn’t my decision.” And I said, “I just want you to understand, I don’t do business this way. If you continue to come across this way with me, I don’t need this job. You can have it.” And I said, “Furthermore, I’m a very physical person. I’ll come across the table and give you another taste of some experience.” And I stood up and they thought I was going to do it right there and Russell said, “Barry! Barry!” I said, “No, I’ve learned to be a gentleman and I’ll continue to be a gentleman but I expect the same from you.” And I left.
So the next board meeting—and Russell was a very strong personality—so the next board meeting, the whole issue is about copyright. What are we going to do about copyright, how are we going to deal with it and so on. And Russell didn’t have a lot of friends on the board but at the end of the meeting, I said, “Lookit. Here’s what I think our plan should be. Russell Karp and I will go walk the Hill and try this out.” And several guys were like, “Schmidt’s crazy. Why would he bring Russell to that exercise?” I reacted. I said, “I think Russell has this issue down better than anybody that I’ve heard articulate it. And we’re going to play it out and just see what it can do.”
So again, my goal was to win. Whether Russell Karp liked me or not was not the issue, you know? So we did, we walked the halls and it started to get some traction. I remember there was one occasion—we were going to see Senator McClellan. Senator McClellan was the chairman of the Senate Judiciary Committee, one of the most powerful people in the Senate. And I stopped Russell in the hall. This was after about ten meetings. I said, “Russell. I’m going to do the talking this time.” He didn’t like to hear that. He said, “Bob, I know more…” I said, “It’s not about what you know. I’m going to be very candid with you. Senator McClellan does not have a high regard for people of the Jewish faith. I’m going to talk, OK?” And he listened. He was coachable.
Schley:: Karp, I want to say, in my mind was associated with TelePrompTer?
Schmidt: Yes, he was the CEO of TelePrompTer.
Schley:: He was one of these roguish guys you had to get to behave. There were a lot of them.
Schmidt: It was like herding cats. There were a lot of people, a lot of different personalities, and it was a challenge.
Schley:: But Bob you did—Congress, there was a legislative act that created the CRT [Copyright Royalty Tribunal], is that correct?
Schmidt: Correct.
Schley:: It took an act of Congress and that really helped this industry attain some, I think, some respect, some economic predictability and then you were on the map now. You were part of the media business.
Schmidt: It was a great day but again there were issues right behind it. We had this pole attachment issue. And I remember I said, we’ve got to do some things here to dramatize this. So I got a chunk of cable that someone had cut off the pole when they tried to disconnect us. And I laid it on the table as we were testifying in the House. We got that issue—it was like slam-bam-thank-you-ma’am, you know?
Schley:: For those who don’t know, what was going on? What was the issue?
Schmidt: Well, here: because we had to string our cables on existing poles. So they were either power company poles or telephone company poles. Well, the predominant poles were telephone company. And they’d hold us hostage. They’d say, well, this month you’re going to pay $6.00 a connection. It was ridiculous. It was all again trying to keep us out of the business. Thank God that the Congress saw that and we were able to get that done.
Schley:: So would you say during your four-year tenure, copyright, pole attachment, those were kind of the two big picture advancements that you helped to—
Schmidt: I think that’s a fair statement.
Schley:: At the end of your tenure, you sort of went out with a bang because you were at a convention in Las Vegas—
Schmidt: Correct.
Schley:: —and I believe the President of the United States is participating.
Schmidt: I was able to arrange a videoconference with President Carter.
Schley:: Just wax poetic a minute because that’s a pretty big moment for an industry that started out not being able to get a meeting…
Schmidt: Let’s drop back a little bit before that. I’ll answer your question but I remember I’m up in the House meeting with chairman of the House Judiciary Committee, Peter Rodino. And Peter Rodino liked me as a person. In my checkered past I played quarterback for Notre Dame as well as subsequently playing for USC. He was a big Notre Dame fan. So that was always my card. I’m sitting in his office and we’re talking about our issues. About twenty minutes into the conversation, his secretary walks in and hands him a note and he stands up and he says, “Bob, unfortunately it’s time to go.” And I said, “OK.” So I walked out and thought, did someone die? What happened here? And the secretary says, “No, the president of CBS is here.” And I said, “Now I know I’m chopped liver.”
In this timeframe, Brian Lamb comes to me with this idea of C-SPAN. And I said, “Brian, that is one of the most incredible ideas I’ve ever heard. I’ve got a couple of agendas that relate to that.” And I told him the story about the meeting with Peter Rodino. And I said, “Brian, I don’t want to second guess what you’re doing, but I just want to make sure that the cameras have lights and it’s cranking.” Brian is an incredible human being first of all. I don’t like to take credit for many things because it’s not my personality.
But he said, “This is what we want to do.” And I said, “What’s the problem?”
“I need capital.”
I said, “What do you mean you need capital?”
He showed me the business plan and so on. I said, “What’s the number?”
He said, “I need a quarter of a million dollars.”
And I said, “OK. You got it.”
He said, “Where are you going to get it?”
I said, “That’s now my problem.”
And this is after we’d passed the legislation on copyright and the pole attachment. I made five calls to five of the bigger companies and I said, “I need $50,000 wired into the Association account and I’ll tell you later what we’re going to do with it.”
Schley:: And they wired the money?
Schmidt: They wired the money. I handed him a check like three days later. And he says to me, “Bob, your next assignment…” Right? He immediately hands me the ball again. He said, “You’ve got to go see the Speaker.” Again, he was on my Lombardi Foundation board—
Schley:: This is Tip O’Neill.
Schmidt: Tip O’Neill. And I said, “We’ll go there.” He went with me in one of the meetings, but one of the first meetings I had with Tip, I said, “Mr. Speaker. There’s an opportunity here for you to have an unfiltered relationship with your constituents.” And he said, “Bob. Stop all the BS. Tell me what it is.” And I said, “We want to put the cameras in the House chamber, no commercials, just run them from start to finish. You get the chance to talk to the public, your constituents, your citizens, not as a thirty second spot on the nightly news.” He said, “That’s very intriguing.” So that’s how we did it.
Schley:: Brian, I think, was a trade journalist. He wrote for one of the cable publications. But that idea immediately resonated with you.
Schmidt: Life is about leverage. We had little or no leverage, OK? We didn’t even have a cable system within 100 miles. John Evans played a very important role. He had the first real cable system nearby where I could bring members of Congress or members of the staff of the FCC and say, “Here’s what it looks like. This is the deal.” Because, again, it’s hard sometimes to talk the talk. You need to show people the pictures and show them what the real product is.
Schley:: And he had Arlington, Virginia?
Schmidt: He had Arlington, Virginia. Exactly. But these were times—it was like the Wild West. And it wasn’t easy. I remember we’d try to get organized to come to Capitol Hill and I’d tell the guys on the hustings: here’s the deal. I want you to go to Congressman Jones, who’s your Congressman. You go to his office. You sit in his office until he sees you or his chief of staff sees you. You don’t move, you don’t take no for an answer. And it worked.
And I remember I used to tease Valenti. Valenti used to give me a hard time. And I’d say, “You know, Jack, I could count better than you.” And he said, “No, you could never count better than me.” I said, “Well, I’ll give you an example. You brought Charlton Heston and Elizabeth Taylor and Kirk Douglas for photo-ops in the Capitol. I brought 5,000 guerilla warriors from out in the boonies.”
Schley:: And with C-SPAN, you brought a whole population of viewers.
Schmidt: Again, it’s funny. On the board, I remember these discussions because the first issue about C-SPAN is coverage. Carriage. And with all due respect to John Malone, John was on the board and I always said John was the smartest guy on the board, always was a step ahead of what was going on. I remember one of the great lines out of his mouth to me was: “Bob. I’d rather watch haircuts than watch these people.” And I said, “John, that might be a very classic example. But as long as they’re holding our future in their hands, I need you to support this and give carriage.” He was very good. Once he understood this was about the future, it became very clear that that was very important. And I still say, one of the most important things that I had a small part to do with in the industry was helping create C-SPAN.
Schley:: Talk about that appearance by President Carter.
Schmidt: It was very interesting. We still weren’t 200% as I’d say, but we had enough what I call presence that I convinced the people at the White House. I said, “Lookit, this would be a great opportunity for the President not to have to go physically someplace and we’re going to use our technology. We’re going to put you on a satellite, put you into Las Vegas.” I think we had like 25,000 people there; it was a very substantial group of attendees in those days. I said, “It’s going to be a short interview, but it’s very important I think for you and this administration to support new developments in technologies.” And they bought it, they loved the idea.
I remember Doug Dittrick and I went out and bought new suits and we were having a good laugh about it. We saw the pictures later and he said, “Schmidt, do you ever think you could fit back in that suit?” I said, “I don’t know, Doug.” But it was a good day.
That was about the time I decided I was going to move on. And I remember—not that it was a big deal to anybody—I remember several board members said, “No. You can’t leave us.” And I said, “No, no. I’m leaving. I’m going to leave you in better hands. I’m going to leave you with somebody who I think is more articulate than I am. He’s obviously better-looking than I am. I think he has a great presence and he’s been part of it. Tom Wheeler.” Thank God they listened to me.
Schley:: You had brought him aboard, groomed him, if you will…
Schmidt: Tom Wheeler is an unusual person and one of my close friends. Tom, again, demonstrated he had more potential than anybody could ever imagine. And he developed it. Again, I’m thankful I had a small part in that. The other person that I brought on the staff—when I first showed up there, I looked around and I said, “We have no minorities here.” And I said, “I’ve got to find someone of color to be here.” Through some contacts, someone sends me Bob Johnson. After vetting him properly and everything, I hired him.
As Bob was coming up with this idea later on…he came to me with the idea of Black Entertainment Television. And I said, “Bob. I think it’s a great idea. Someone’s going to do it.” There was another Johnson family that owned Ebony magazine. I said, “Maybe the other Johnsons are going to do it.” He said, “I don’t want that to happen.” And I said, “What can I do to help you?” He said, “I still need some income.” And I said, “Well, lookit, I can’t have you on the payroll and have you do this. I’m going to give you a consultancy. But it’s not going to be a free ride. This is not a fake deal. You’re going to have to give me some time and energy and produce.” That’s how we did it.
Schley:: When you think back…we’ll close that chapter in a second because so much happened…but when you think back on it, how would you characterize that period in the cable industry’s evolution and its presence in the nation’s capital?
Schmidt: Not to oversimplify it, but I think the industry grew up fast during that period. I think the doubters who were what I call the less visionary part of the industry started to buy into the vision. And I think one of the critical elements was the fact that we started to create other programming. I remember Rasmussen, who started ESPN, came to me with the idea and again I said, “It’s a great idea.” And about eight months later the guy who was running it, Chet Simmons, came to me and said, “Bob, I need your help.” I said, “What’s the problem, Chet?” He said, “This entertainment and sports programming network, it’s a mouthful. We’ve got to get rid of that. Help me to get rid of it.” I said, “I think that horse is out of the barn and running. It’s really ‘ESPN,’ it’s not this long…” He said, “I’ve never been involved with anything that had four digits. It was always ABC, CBS, NBC.” I said, “Well, that’s good. We’re separating ourselves.” I think that was the beauty. There were people who had creative ideas and now started to recognize there’s another platform. There’s another place to demonstrate your talents and to show your product and so forth. And it was exciting. It was just an incredible time of just new ideas and so forth.
Schley:: You went on then…well, tell us about what you did and how maybe your experience and exposure to cable inspired you to try some new ideas.
Schmidt: Again, Stewart, in fairness, I grew up as I told you in Bakersfield, California. I had my first job when I was ten years old. I sold newspapers on the corner. My dad said, “If you want a bicycle, you’ve got to go earn it.’ I figured out I could sell more newspapers in the bars instead of on the corner so I’d go in the bars and I’d sidle up to you as a prospective client and I’d say, “You look like a strong guy, Stewart. I bet you can’t rip up these three newspapers.” And you’d rip them up and I’d say, “You owe me 40 cents or whatever the mark was.”
I had my own trucking business when I was eighteen, hauling produce out of the fields into the packing sheds. So I was always an entrepreneurial kind of person. And finally in 1979, at the convention, I said, “I really need to go do something to try to get involved.” Like everything else, it was new. I think I was probably the first person who came along—no disrespect to the people who were before me—who was thinking progressively past this moment. I went to work and did some work for Continental with Hostetter and helped get some franchises for people because this was really the hot time for franchising. That was kind of an interim sort of step. Then I said, “I’ve got to go do this. There really isn’t much opportunity in the U.S.” I started going outside the U.S. Because I’d been involved in politics, I had relationships outside of the U.S. I want to say 1971-72 we created an organization called the American Council of Young Political Leaders. It was very bipartisan. It was Pat Buchanan, Hodding Carter, everybody that you can imagine. Now they’re all either senators, governors, you know. As a result I had relationships in these other countries.
So I went to the Soviet Union in 1981 and people said, “What are you doing?” I said, “I’m going to try and do some things.” It was almost like a James Bond movie. I had a briefcase with an umbrella which was basically a modem in a briefcase and I could connect it to the satellite and connect it to the back of a television so I’m in the mayor of Moscow’s office showing him this. And he says to me—I’d learned to speak some Russian—he said, “Bob. Nyet. KGB won’t allow.” And I said, “Well—” His name was Luzhkov, he was the mayor there until five years ago. I said, “Mayor Luzhkov, that’s your problem. You get that sorted out and I’ll be back.” Lo and behold he came back to me about six months later. So I went into the Soviet Union. I made 65 trips to the place before I sold this business. I thought it was God’s punishment for me at one point. But I sold the business to John Kluge; he was Metromedia.
Then I started another business in Ireland. I started another business in the Philippines, but it was wireless because cable was too costly an undertaking to really expect anybody to want to finance that. So it was primarily wireless video, subscription television. What I would try to do was—I never wanted to be looking like or acting like a telephone company because now you had to deal with all the regulatory process. I used to say, “I’m in the video business,” and they would say, “Let’s try this.” So they would give me some spectrum. To this day, I have some of the most sought-after spectrum in Argentina. This band—it’s called the 700 band, which is kind of the sweet spot—I have the largest bloc of spectrum in Buenos Aires. About four years ago they woke up and said, “Who’s the gringo that has our spectrum?” So we’re still there and I’m still working at it but it’s now we’re trying to make a triple play out of it. I continue to do that.
Then I went on Brian’s board, on C-SPAN’s board, after I left the association. I looked at what his business model was and he had to pay a big bucket of money to AT&T to get to RCA’s bird uplink in New Jersey. And I said, “Brian, if I build an uplink here, would you sign on as a customer?” Brian was very wonderful, very open. He said, “Bob, I’ll sign on with you. I’ll even show a piece of property we have out near the Beltway.” And I started a thing which later became the first teleport. Basically it was a gateway around AT&T, which was the monopoly at that point. So I built that business, and if you look at the cable industry, it all relates back.
Schley:: Exactly.
Schmidt: Then I got involved in what was called the Wireless Cable Association. I used to jokingly call it the “Oxymoron Association.”
Schley:: Wireless cable.
Schmidt: Wireless cable. And again, that caused some heartburn for some of my cable buddies. At least—they didn’t understand and I tried to explain it this way, I said, “Lookit, there’s going to be a process here whereby you are going to be the monopoly. And you’re going to be defending yourself from various attacks about no one has access to this business because you have the gateway.”
Schley:: It’s a reversal of how things were when you started.
Schmidt: Exactly. Some of the people got it, a lot of people didn’t. But it was all right. I understood. I did that and built businesses throughout the U.S., sold most of those businesses. But I continued to be involved from the standpoint that whether we like it or not, all this plays back into the same scenario. It’s all about distribution of content and if you stop and ask yourself, most people don’t care whether you got it on two Dixie Cups and a string. They want something affordable that’s something that they want, and reliable. How they get it is not the critical point.
Schley:: Sort of fast forward maybe to today and what’s coming tomorrow. You still see a role for an interplay between wireless and maybe wired distribution?
Schmidt: Absolutely. You see, when you cut to the chase, you’ve got to ask yourself, where is all this headed? Consolidation is already upon us. And then you ask, who are going to be the platform? The telephone company is always going to be in play at some point, whether it’s with FIOS or some other methodology. But the telephone company’s also building an inventory of spectrum for wireless. And whether we appreciate it or not, people get their information today from a lot of different sources and they continue to get more of it off of a handheld wireless device. Well, I don’t think the cable business is the cable business. I think it’s the telecomm business now. They’ve even changed the name. It was National Cable Television, OK? So my point is, I think the cable industry ought to be cultivating rural America opportunities. And if you’re going to be in rural America, you’ve got to be wireless.
Schley:: Can’t afford to stretch long lengths of fiber.
Schmidt: Absolutely, absolutely. The economics don’t play. Secondly, I don’t want to see the satellite people hold that hostage. I want to work with all the people to keep an open platform, but the cable guys need to have that opportunity because at some point, the telephone company will move into that area because they have a wireless distribution system. And if they have the ability to do it—it’s all timing. I’ve always said that one of the beauties of HBO was they put themselves in the middle of the game. And if you remember, there was even an attempt later on by a group who tried to hire me to work for them where the movie industry was going to create their own HBO.
Schley:: I remember.
Schmidt: And it didn’t happen, thank God. You know, I moved into a lot of things when I set up this company which was called CTM, Communications Technology Management. I ended up as the consultant for nineteen of the Major League baseball teams, many of the NHL teams and many of the NBA teams, and I wrote their business plans. George Steinbrenner was my client for a year. If I ever write a book, I’ll give him a chapter. I got him $100 million of rights money out of Cablevision. But the most important thing I got him was a buyout clause. He could buy himself out for $10 million. Within three years he bought himself out of the contract and resold the rights to Madison Square Garden for $400 million. So again, the whole business is driven by content, but it’s efficiencies of distribution and that’s what we should never forget about. And I think the cable business today is not the cable business; it’s really in the video, voice and data business. And one of the things that they’re still continuing to recognize and hopefully will take advantage of is mobility. There’s only a few ways to do that and Wi-Fi is clearly that—what is all this stuff in rural America? It’s Wi-Fi. So to me it’s like follow the trail, you know.
Schley:: You’ve been doing that, I guess, since you started in this crazy business.
Schmidt: I’ve always been a little bit ahead of the curve, but there’s risks there. My bride of 48 years continues to ask me, “When are you going to stop?” And I say to her jokingly, “When you put me in the box.” Because that’s my personality. I love to be involved. In addition to the things I’m doing in telecomm, I’m the executive director of the Pro Football Retired Players’ Association. I represent 20,000 of the NFL retired players. There again, I think, that’s a group that’s been kind of taken advantage of over time, but we’re now working on this issue of traumatic brain injury. So I’ve taken the soldiers—I’m very involved with the military now—where we’re taking the needs of the soldiers and the NFL players side-by-side. They have the same symptoms, OK? Because we need to do more for the soldiers. I’m embarrassed how little we do for our military. If I can do something to make that happen better by marrying the interests of the players with their cachet and celebrity with the soldiers, I would be smiling in my grave, OK?
Schley:: I get and appreciate—you handed me your resume at the outset—and I get an appreciation for why it’s three pages and not one. You’ve done more, I think, in your lifetime than most of us could ever aspire to accomplish.
Schmidt: Stewart, I’ve been very blessed. My dad was an immigrant from Germany. Not a well-educated man, but a great man. He died unfortunately when I was sixteen. I’ve always understood work, I’ve always understood that if you’re going to do something you’ve got to do it with integrity. I tell people I set legal education back several decades at Georgetown. And one of the most important things I learned in law school was when you’re a fiduciary, and you take responsibility for other people, you have a higher responsibility to them than to yourself. I believe in that very strongly. And I also understood one of the most selfish acts in the world is to help people. It’s in the Torah, it’s in the Bible, it’s in all the great books. But it’s sometimes something a lot of people don’t get. I’ve always said, you can do more and you can make a difference as a person. You don’t have to say, “This is a bigger thing.” No. You’ve got to put yourself in play and hopefully make a contribution that brings something better for the next generation.
Schley:: You’ve not only helped a lot of people, you helped an entire industry at a time when it was needed.
Schmidt: It was my privilege. Some of my closest friends today are still the guys I met in the cable business. We get together periodically, we have a group they call the “cable hackers.” We were just together recently. It was Jack Crosby, Bob Hughes, Doug Dittrick, Jay O’Neal, Jay Ricks. These are my friends. John Saeman. These are the people that I started with. And again, the business has changed. There are a lot more people who say, “Who the hell is Bob Schmidt?” Never had a clue. That’s all right, too. Because it’s going forward. I’m interested in the next generation. I want to see this industry have the reputation for doing good and making money.
Schley:: It’s good to see you back at the 2014 Cable Show and it’s been great, Bob, to talk to you. Thanks for sharing your time and your words for the Cable Center’s oral history series. I’m Stewart Schley.
END OF INTERVIEW
