Interview Date: Sunday November 10, 1985
Interview Location: Washington, DC USA
Interviewer: David Paglin
Collection: Penn State Collection
Note: Audio Only
Interview dates: November 10, 1985; November 26, 1985; June 19, 1986; March 31, 1987
PAGLIN: Good morning, this is David Paglin, Oral Historian for the Golden Jubilee Commission on Telecommunications. I'm in the office of Mr. Henry Geller in Washington, D.C., at the Washington Center for Public Policy Research.
First, would you tell me, Mr. Geller, something about your early life. I'd like you to talk to me, if you would, about your birthplace and your parents, your family, early memories, important things like that, where you lived; some memorable things that come back to you from your early childhood. Perhaps something about your early education in elementary and high school as well. Whatever details seem to be interesting and important to you.
GELLER: I was born in 1924 in Springfield, Massachusetts. I escaped a great fate at the date of my birth because I was born on Valentine's Day in 1924. That was the height of Rudolph Valentino's popularity and the nurses all told my mother to name me Valentino. That would have been the end of it. Fortunately, she resisted and simply named me Henry. I did not stay in Springfield very long and have no great recollection of it. My father decided to move to California, stopped to see a brother in Detroit and never got to California. So I grew up in Detroit.
My father was a builder. He, as my mother said, made and lost several fortunes, and so at times he was a painter also. He hated being a painter during the Depression, but he would get wiped out. My mother always said it was a roller coaster with him. Fortunately, he was going up when he died, so he left her with some money. He loved building homes. It was his life and he was all wrapped up in it. And it was a rather typical Jewish family of somebody who came over from Europe. From Poland, in my mother's case; from Russia, in my father's. And that is that it's all family wrapped around the children. My father was very interested in his work but left the bringing up of the children to the mother. And the mother runs the household, does everything, and really caters to the child's needs. Too much now as you look back and think, My God! Because she would make a meal for each child, for example. God forbid that you would just put a plate on and say eat. Each child got a food that he wanted.
PAGLIN: Do you have brothers and sisters?
GELLER: Yes, I have one brother and two sisters. The sisters are the oldest. One is twelve years older; one is ten years older; the brother is two years older. The one great tragedy in my family is that my sister at the age of two and a half or so got infantile paralysis, the oldest sister. The result was that she never could walk. She dropped out of school at sixteen or so; very bright, but never used her capabilities. My mother and father ... again, being what they are ... just showered love on her. But they really needed to push her out into the world and insist that she stay in school and that she move ahead. And the result is that she has always been very dependent on the world and that bothered both my parents a great deal. It's just, I think, the single great tragedy of their married life.
The rest of it is very routine. And it was, as I said, a very close knit usual Jewish family. We lived in a Jewish neighborhood. The school--95 percent Jewish‑‑very high academic standards. I went always to public schools. The public school system at that time was extraordinarily good. I've no complaint ever about teaching. They were tremendous, terrific educators. The library system was terrific. It's not true anymore. Detroit kind of has fallen on bad times in the library. But I use to love going to the library. I loved sports a great deal. I used to live on the tennis courts.
PAGLIN: I can tell by the contents of your office today, there are various sundry things, having to do with tennis, and literature, and all kinds of things I wouldn't necessarily expect to see in this office. A wonderful state of disorder.
GELLER: Well, it's creative chaos.
GELLER: But I, the upbringing with what's happened, there are no untoward episodes or anything like that. I graduated ... my mother used to send me to summer school every summer instead of camp. The result is that I simply graduated at the age of sixteen from high school. And went into college immediately at the University of Michigan. I graduated from that at the age of nineteen.
The war came ... and I clearly was going to go into service. I did go into military service in April of 1944 and got out in May of '46. The military service, in my case, was also quite interesting. I took basic training in Alabama and I was trained in the 4.2 chemical mortar. I have a degree in chemistry. I should talk a little bit about that. But after going overseas to New Guinea and the Philippines I ended up in Japan. I never saw a 4.2 chemical mortar. That's the Army, typical. I spent most of my time unloading ships at quartermaster depots, loading and unloading things.
PAGLIN: You were a sergeant then?
GELLER: Yes, but during most of the war I was nothing at all but a casual doing this type of labor. I did volunteer for OCS, things like that, but they correctly evaluated that I was a very immature type. I was then just living on the wind, as my mother would put it. And after the war, I ended up as a sergeant. I finally began using chemistry, but only until the war ended. When I got over into Japan, they did assign me to a lab outfit and I used my skills in chemistry to run tests. I would run tests on cons in Washington to insure about syphilis. I would run tests about methyl alcohol. The troops would be drinking something that might make them blind or kill them because it was not ethyl alcohol.
I should go back. I just kind of skipped ahead and, as I said, it was very uneventful. I wasn't in any great danger. We'd go in on invasions, but we were in more danger really I believe, going down the Mt. Vernon Parkway, than you are on these things. There would be kamikaze planes, but after about the fourth day, from then on all you would be doing was unloading the ships. There would be one plane that would come over, drop a bomb or something. The chance of getting killed was very slight in those circumstances. Much greater at home driving down some highway, I believe. I met a lot of interesting people; I enjoyed my military experience, too. I feel guilty about that. So many people died and had a hard time. It was just a very interesting time for me. Enjoyable, I'm sure.
PAGLIN: Can I infer, from what you were saying about the University of Michigan and the service, that if you had an early professional aspiration at this time, it had to do with science rather than chemistry?
GELLER: That's what I wanted to get back to. I skipped over it. I was always extremely interested in science. I loved reading about it as a kid, doing lab sets. I loved astronomy. I still do this. My chief reading is on cosmology‑‑books on superforce and what is happening in quantum mechanics and how this explains the creation of the universe. I was drifting toward science and I took a lot of science in high school. When I went into Michigan I was going to be a chemical engineer.
PAGLIN: I see.
GELLER: I was kind of switched off that by faculty advisors. This is back in, I went in in 1941; and at that age, as I say, '40 ... I was sixteen when I got in and soon turned seventeen.
PAGLIN: What made you choose Michigan?
GELLER: It was right there and very reasonable. It cost $60 tuition for the semester, $120 for the year.
PAGLIN: It would be a bargain nowadays, wouldn't it?
GELLER: Yes, to live in the dormitory was $16 a month. To eat three meals a day was $1. And when you add it all up, it was absurd to go anywhere else. It was a good school. Now it's very large. Then it was 10,000 students. I liked it. It was close to home and Ann Arbor is a lovely city, it really is. And so I just went on, it was the easiest way, and I went to Michigan. A faculty advisor strongly recommended that I not continue in chemical engineering.
PAGLIN: Why was that?
GELLER: He said that there was great prejudice against Jewish people, and he recommended that I not do it.
PAGLIN: Has this been borne out by what you have seen?
GELLER: There was at the time, but it's all gone now. At the time, when you go back, I finally ended up in law. If you applied to a New York law firm, they did not hire the Jewish people. Now they're delighted to do so. If you're a top graduate, they would take you on as a partner; but this town has changed remarkably. When I came here and your father came here, you know, you ended up at Union Station. Had drinking fountains colored, white; restaurants colored, white. Enormous change. We're talking about the early 40's. This was a sleepy southern city and I think that my advisor was probably right. I had no reason to doubt it. He was a very sincere guy.
I took him at his word and began drifting ... thought about pre‑med. Fortunately, I never went into medicine. I would not like it; would hate it. It was not my field. Although I could probably do research in it. By that time I had an awful lot of chemistry. And then I decided I didn't want to do pre‑med. I never applied to med school. I just kept on with chemistry. And I graduated with a major in chemistry and a minor in physics and mathematics. I went into service, as I say, with this chemical background.
When I got out I went back to Northwestern and began working on a master's degree in chemistry, the one thing I loved reading about it. I don't like the lab. The labs to me were very boring. They take hours, and hours, and hours of work. And what you do is you run it at 32 degrees, you run it at 35 degrees, you run it at this pattern, you run it at that. I really didn't enjoy it all that much. The reading I didn't mind. The lab work I did mind.
What I tell you now is a true story and doesn't reflect very well on me, but it is the truth. I would go down to this one bar in Chicago, the Black Hawk Bar. I was taking, say a two‑hour qualitative organic course and putting in thirty hours a week to do it because of lab work. And every time I was down there, I would bump into these University of Chicago law students and I asked them if they ever studied. They said no, you didn't have to study in law school, that they'd give you one exam at the end. And I've never had problems taking exams. Labs are a problem, but with exams, never. And so I went home and told my parents. They were amazed that I wanted to study law. Then I wanted to become a patent lawyer. And actually, you've got to realize, I was quite young. What I wanted to do was just goof off. I was on the G.I. Bill at Chicago.
I didn't even want to be in Chicago; I wanted to be in California or New York. But they were swamped with applications, so I just drifted to Chicago.
PAGLIN: The law schools?
GELLER: Well, this was Northwestern Graduate School.
PAGLIN: Oh, I see.
GELLER: The law school's the same way, though. I applied to California, I applied to Columbia, and I don't think I stood a ghost of a chance. Whereas, I could easily get in at Northwestern at the University of Chicago. I didn't really have a great interest in patent law. I took one seminar in it and never got near patent law. What I wanted was not to be bothered and spend three years having a good time. And I did. I had a joyous time. I played bridge all hours and ate, played golf--just had a ball. Law school is remarkably easy. It's just a bullshit course and I would do nothing for fifteen weeks and then I'd spend a whole week trying to learn it.
PAGLIN: It isn't relative to the hard sciences, that is.
GELLER: You can't do what I did in science. You can't even begin to do what I did. If you did it, it's a wipeout, I can tell you. In law school I finished second in the class. I had very high averages. As I say, the same type of attitude, if you tried to do in chemistry or physics, you'd pick up the pieces. All they do is give you an exam or they want you to analyze factual situations. It's almost an advantage not to know too much. You've got to know certain boundaries, but if you have certain fundamentals in mind, and you simply reason on it, you have an advantage because you're not trying to fit it into any mold just thinking about it. And as I say, I found it just a piece of cake. When you get out, you're a lawyer.
When I got out, I at no time wanted to do private practice. I would never, never be interested in it. I've always wanted to do what I call public service. There was no Ralph Nader or no public service of that nature at that time. If you wanted to do public service, you had to work for the government. In any event, I thought I would go to the government. Even now, even if there were a Nader, if you want to accomplish anything in the way of policy, you have to do it from the inside much more than from the outside. You can be far more effective if you're inside pushing for policy than if you're outside suing them. I'm outside now, and I sue them. And I can tell you, that it's that old thing, "I've been rich and I've been poor, and rich is better." Believe me, I've been in and I've been out, and in is better. Trying to effect policy from outside is extraordinarily difficult. I honor Nader and others, but maybe they can do a better job than I. I find it very hard to do.
PAGLIN: When would you say you got, initially, this sense of yourself, this intending to head in those directions, the initial conviction to effect policy, you wanted to be with the government? Does this have anything to do with law school? With things that happened to you in the military? Political views of yours that began forming at that time? Responses to the national government, the administration then? Anything of that kind. Innumerable events happened on the national scene that compelled you in some way in that direction.
GELLER: No, no, I'd like to say yes. I tell you what my convictions have always been. You'll find it amazing that I acted as I did in law school, but my convictions have always been that you put in so much time working that you ought to choose the most interesting work. It's a pity that you work for months and you put in hour after hour; and unless you have enormous needs of money, something that I've never had to have. Unless you have something that you want to own, an airplane, a yacht, unless you have some driving need for money, you ought to work for the sake of saying, "Gee, I'm awake in the morning, I've got interesting work, I want to get into work, and ought to look forward to work." And, therefore, you ought to choose work that you really like to do. Which you say I can't wait to get in and do it.
Now, I knew that's what you should do and like so many other people, I just thought I knew it from the very earliest time. It wasn't hard to figure out. As what I just said to you, ought to be like A, B, C. Doing it is the hard thing to do.
GELLER: You've got to find something you like to do. There are people that work at Rand Corporation, they call them Bostons, or at Hughes that don't want to leave the lab. If you paid them nothing they would come in. They simply want to do research on some particular physical thing, something like that. And that's what I wanted. And that's why I set out in science. But I found out I didn't like the lab work, and so I ruled that out. Once I did that, I was kind of adrift. And then I ended up in law, and I still don't know what I'd like to do in life. Have no notion. If you'd send me back, I don't know. But if I was going to go into law, and knew, and that's why it isn't any particular thing you said on the landscaping [???] event, I knew that you ought to choose work that would be satisfying. Where you would get some satisfaction saying if I got done doing that kind of work that was worthwhile. And that's not working for a client. A client it may be very worthwhile, and could be absolutely against it. I know people out there who represent cigarette companies, the Richard Cohen column.
PAGLIN: I read that.
GELLER: How do you represent cigarettes? I'm not saying they're not entitled to represent cigarettes, but what satisfaction do you get out of it? Some theoretical one where everybody's entitled to representation or my God I've got a lot of money? It's blood money almost. And, therefore, I figured out based on the same thing that led me to try to do the science thing that I want to do work that I can say "that was interesting and that was worthwhile, worth doing." And that's government. That's not private practice.
Now there was one other thing you could do, I suppose, and that is you can go and become a lawyer where you help people. Where when people come in with problems, instead of just making money off them, you deal with people in a way that helps them and you can look back on a lifetime of helping them solve their problems. But on a human basis, I didn't think of doing that for the most part because, it's just the same way I didn't think of becoming a psychiatrist or a psychologist. I don't think I have any special bent for hearing people, being sensitive to people. I thought my bent was much more in the way of policy work and, therefore, I drifted to government and have always stayed with government. But it seems to me that if you're going to do law and get satisfaction out of it, there are only two things that would meet my definition of it. One of them would be where you work with people and at the end of it say, "By God! I helped that person." You know, he would ... I've seen some lawyers who ...
I had a secretary once whose son was accused of taking some money from Highs [???]. My brother‑in‑law worked on it, got him off, and then gave him a Dutch uncle talk and said you ought to learn from it. And I think what he did there was a very worthwhile thing. He can look back on it with some satisfaction. That it was worth doing. I don't do that type of thing. My work would be how you get on counter‑commercials to smoking? How do you get fairness out? How do you get more informed electorates. Since your democracy depends on a more informed electorate, how do you get a contribution by broadcasting data with it. In some ways the lower echelon, than working with the kiddies and all, would hide. But I thought it fitted me better and that's why I drifted to government.
The '60s, certainly, from what I gather were very strongly motivated toward public service. The driving force in the '30s was the Depression, of course, and it drove people to labor law and to social security work or interests of that nature. My interest when I came to Washington was getting into anti‑trust and I applied and I didn't make it. But when I came here from law school, very few people came from Northwestern to Washington, D.C., very, very few. Maybe one or two. Every class, in fact. And there were two professors there and one in particular, Willard Wirtz, who later became Secretary of Labor.
PAGLIN: Yes, I've heard of him.
GELLER: Wirtz was called in by the dean and said Henry wants to go to Washington, who do you know? And he gave me a letter to Adrian Fisher and to Harry Plotkin. Adrian Fisher was at the Atomic Energy Commission and told me you don't want to work here. The security is so heavy that you don't want to come to work at this organization. I then saw Plotkin and that was the FCC. I had no great notion to work for the FCC. My love was to work for anti‑trust, but with anti‑trust you needed political drag and I didn't have any. You really did to get into the Justice Department.
PAGLIN: You were at the Justice Department for ...
GELLER: When I applied in '49, you needed political drag. It was the Democrats, and you needed to get some clearance to do it. They would not hire you without clearance. Whereas, the FCC would hire you purely on merit. The FCC had a hiring mark and they told me after I came to work that the ratings were high enough to hire me, but no one could even remember what I looked like. And Max Goldman, a friend, said, that when I showed up they said, "Oh, that's what he looks like." You can see they were doing things on the merits, so they hired me on the merits. And I ended up at the FCC for that reason.
But to drift, and I've since then left government only when compelled to do so. I've had to leave twice. And, frankly, what I'm doing now is waiting to go back into government. The last, what do you call, "waiting for lefty." Maybe I'm waiting for Godot. And if Godot never comes, then my turn may never come.
PAGLIN: I can express that political bias for '88 or so, let's hope not.
GELLER: So, I would like to go back and in between I avoid private practice. I take jobs that allow me to pursue public interest goals, as I see them, but not very effectively. As they say, you're not as effective out as in. And I simply wait to return.
PAGLIN: I see. I'm looking at my sketch here of a long and varied career and I see exactly what you're saying. It's substantiated without looking down here. I'm kind of wondering if I could get you to glance back for a moment or two at what you think of and think back to your clerkship and NLRB and your early time at Justice and then the FCC. What you think of now as the significant personal and professional achievements and milestones, things that had a really consequential effect on enlightening you or changing your professional direction or your objectives at that time. What really had an effect on your understanding of the work you were trying to do in public policy at any of those places and at any time?
GELLER: I think it was working with people. Working with people like Plotkin and others that were the mentors and you learn from them and from the experience. Dick Solomon, Roger Wallenberg, and Max. As you work with these people and at Justice, Danny Freedman, Hal Westen, at each one of them you would add a layer. The Labor Board had some very able people working there, Fred Reel, Arnold Ordman. You just can't help having it rub off on you about how you go about it; how you go about the job; how you go about perceiving the public interest, where the leverage is.
GELLER: It's interesting. I began the way a lot of people did, for example, believing in ... that you could adopt regulations in what I would call behavioral regulations. The more I got into it, in areas like this, I concluded, for example, that structural regulation was far better than behavioral. The difference, and one of them is content ... the Fairness Doctrine is behavioral regulation. Another one, the ultimate one, is the station comes up for renewal and you have to determine whether an overall basis is served that meets the needs of the public. That's behavioral. It does not work well. It took me a long time to come to that conclusion that it doesn't work well.
A structural one is a multiple ownership rule. That you can't own two stations or I want 5 percent of your money in a tax on you and I'm going to turn it over to public broadcasting. I've got the money, and I will structure the works for me. The commercial people make money. I take the money; I give the money to public broadcasting. Public broadcasting is motivated to do worthwhile children's programs, commercial isn't. I'm just using shorthand to you; but what I'm saying is that over a period of time, you gradually learn what works and doesn't work. And I learned it from people, from observing. I learned it also from failures. You know, everyone recalls the mistakes you've made now. But I think you just accumulate experience, wisdom, knowledge.
PAGLIN: I wonder whether that mentor thing kind of has operated in both ways in that you've served in that capacity to people who've worked with or beneath you at later times in your career. Do you perceive that that's happened as well?
GELLER: Somewhat. I think that there are people, Charlie Firestone, Stewart Brockman, and young people who I think have learned something from the way I've approached problems. And it is that it's evolution, you know. You just hand it on down, and I think we are part of a web or something of that nature. And I certainly, as I say, drew from the Plotkins of this world and I would assume that people ... you know, I'm passing on here and things like that, on down the line.
PAGLIN: Were you ... speaking about Washington, D.C., as a place where you've spent most of your professional career. What was the most exciting time or climate over those years, starting with let's say the late '40s, early '50s or '60s? Why so, in a very general way?
GELLER: Sixties. Kennedy brought in enormous ferment. Really there was a feeling that the government could accomplish a great deal. I was at that time coming into my own because I was no longer way down the line. I was now Deputy General Counsel, and after your father left became General Counsel. I was in positions of greater power from that. There was a great deal of ferment, it was just a juxtaposition arriving then at an age, at a position where you could get things done. In the late '60s, from about '65, '66, '67, '68, '69, I really was a very powerful force at the FCC, through a combination of circumstances. And I got a lot done, that's all. I got things done that I never thought I could get before, the anti‑smoking commercials, Fairness Doctrine ... On a different keel, we got out competition to AT&T for the first time in the NCI. The Carter phone decision came down, which opened up the telephone lines for the first time for equipment.
As you look back on it, it was a period of great flux where there were a number of things happening. I had a very good staff working with me during those years, excellent people--Ruth Reel, Dan Ohlbaum, people like that. And we just got a lot done. It was by far the most satisfying time in my career. I reached higher office later when I was the Assistant Secretary of Commerce. But the most satisfying time by far, was that period in there, all the way from '61 to about '70.
PAGLIN: So it does happen then. You're saying that not only the work one does but the conditions in which one has to work is affected by the external environment, and the economic things, political things that are happening. Other agencies and in other parts of the government all can cumulatively have a kind of a bearing on what you can accomplish and what you set out to accomplish. That can change from administration to administration.
GELLER: No question. Right now for example the FCC is a total wipeout for petitions to deny. The Congress is very difficult to get anything out of. The only thing you have left is the courts. And the tide is not running well in the courts. The courts are not perceptive to the type of petitions any longer--the public interest petitions--and the result is that these are very difficult times for the public interest movement. So, I would fully agree with your statement. The only thing I would hope is that it's like a pendulum, and there will be other swings to this country. I may not be in on the swing, but there will be other swings.
PAGLIN: You know what else I'm interested in is some of your ideas and feelings about communications, specifically, communications history in particular have come about and I'd like to take you back again to ask you about some of your early experiences, personal ones with the mass media. What are, for instance, some of your earliest memories of radio and TV in your life, in your profession, as to what meaning they had for you and for other people around you and for your education and any professional aspirations, and so on and so forth. Go all the way back, if you would. I'd like to hear this very much.
GELLER: I listened to radio when I grew up. I listened to all the serials of Jack Armstrong, Tom Mix, the Green Hornet, and The Lone Ranger.
PAGLIN: So you had radio from your earliest years?
GELLER: Yes. I remember the radio. I was born in '24. By the time I was paying attention, there was radio. Particularly in the '30s you'd listen to the Lux Radio Theatre every night. Radio was a very powerful factor in our lives.
PAGLIN: In what kind of way?
GELLER: Well, it was mostly entertainment and news. You would listen to Roosevelt. My father was very taken with Roosevelt, and he would listen to the "Fireside Chats" and I heard them. Mostly what I was listening to, though, was entertainment and sports. I would not miss the Green Hornet. I knew every time he was on and I knew Sherlock Holmes would be on and I'd send away the Ralston box top to get various things. I was taken up with radio the way today's youth might be taken up with MTV. We didn't get records until very late and the records were all single play. I'm just a classical music lover. I don't listen at all to anything but classical music. But for the most part it wasn't records, you'd listen to radio.
The other thing you did was you went to the movies. There were double features on Saturday. You'd walk to the movie, see the double feature and the serial. It was the typical way kids grew up. I'm sure your father grew up the same way and that was it. Television did not come in until the late '40s. I did not see television until I came to Washington and got a set. Television for me is '51, '52, that period of time.
PAGLIN: As someone who'd been interested in the sciences and had some idea of the technological work that was going on in the world, were you aware that this thing was being developed and that in some kind of primitive form it was out there somewhere being tested and the marketing was being anticipated, and so on and so forth? Any interest in it in that regard?
GELLER: My interest, as I say, was in science generally but more in astronomy and chemistry. And second, when I went into law, my interest in law was in anti‑trust and not in communications law.
PAGLIN: Well, then you flirted with patent law a little bit.
GELLER: Not really. I took one seminar, but at no time did I ... I just had to rationalize to my parents why I was doing this extraordinary switch. And I said I want to combine law and chemistry. It is a very lucrative field; it's also very boring, and it did not meet my definition at all of interesting work where you're going to wake up in the morning and be satisfied. Therefore, I never applied to the Patent Office to work and I never tried to become a patent attorney. One attorney actually interviewed me on patent law when I got out of law school; and one attorney interviewed me also to become a private anti‑trust lawyer. I was a little more interested in that but decided that I didn't want to do private practice. It was doing something that was worthwhile, not only lucrative but bringing anti‑trust suits against the movie companies at that time.
PAGLIN: Oh, yes.
GELLER: And he wanted to hire me and I thought about it very seriously and then decided I just didn't want to do that.
PAGLIN: This would have been the late '40s?
GELLER: Yes. There was still a lot of them and it was not that you couldn't get satisfaction out of the work. You could get both money and satisfaction.
GELLER: But I didn't see how I'd be affecting policy that much, so I decided I wanted to go to government.
PAGLIN: I see. I'm wondering if at any time during the '30s and '40s, in education, you were exposed in any formal way to consideration of the meaning of mass media--media studies, if you will. Did you do any reading in that department or anything of that kind?
GELLER: I knew a little bit about some of the media studies. I took a seminar in communications law.
GELLER: The reason why I did that was very interesting. It wasn't even deliberate at all. I came back late to register for law school in my final semester. You had to take two seminars. One of them I had no trouble getting in, patent law, which I took just because it would have looked odd not to take it. But the second one, I signed up because nobody else wanted it and it was just kind of shoved in there. He was a very good professor.
PAGLIN: Who was it?
GELLER: Nathaniel Nathanson. He was a very excellent professor. He was Leo Resnick's brother‑in‑law, really a towering intellectual figure. And as a result of taking that, I enjoyed it to my surprise. Didn't make me want to become a communications lawyer. My interest was, as I told you, to become an anti‑trust lawyer. But because of Thurman Arnold, The Bottlenecks of Capitalism, I thought that's where you could do the most good for society. Remember, there's no environmental law, there's no energy law. Your choice was kind of that or labor law. But whatever, in that course I did read some materials on mass media. There was a freedom ... Zachariah Chaffey at the University of Chicago was doing a freedom of the press study about how do you make the press more responsible. And that study went on in '47 and '48.
PAGLIN: Does mass media have anything to do with print journalism trend?
GELLER: Although, he touched on radio too. Radio was then there so he touched on that also. And I would read things of that nature. The Blue Book had been issued by the FCC and we touched on that, how you make radio responsible there. But the course, as I say, I found very interesting. He was a good professor. The issues were very interesting; I enjoyed it. I hated the patent law seminars. But I enjoyed that one. But I never got out saying, "Gee, I want to work for the FCC." If Willard Wirtz hadn't been a classmate of Plotkin and given me a letter to the FCC, I never would have gone to the FCC. Bill Wirtz had got me there; and once I got there, they have this system of interviews. I trusted them to make the offer because I didn't have any political drag and the FCC did. So I accepted the FCC offer.
PAGLIN: Well, you've told me a whole lot about a whole lot of years. We've covered a great deal of territory. I have one last thing I'd like to ask you. Before I do that, are there any other details that have come back to you as you've been running over these many years and experiences that you would like to toss in or add at this point, that have to do with anything that we've been talking about?
GELLER: No. I think I did lock into something in that the work, the communication law work, is fascinating because it involves the whole. It involves adjudication; it involves rulemaking; it involves First Amendment; it involves economics. Because if you're in telephone it is economic. So the range is enormous, public utility and then behavioral, then it's a "who dunnit" because you're going to take away somebody's license because they violated a law. So the range at the FCC, I thought, was superb. I keep coming back to it. You know, I leave and come back, leave and come back and I like it a great deal. And I think it's just a matter of luck. As I say, I could have been over doing much duller work. And believe me when I finally made it to anti‑trust, it's awful work. It just shows you that life has many twists, but oh, is that not a place to be.
PAGLIN: From what you've been saying, in particular what you just said, I sensed that one of the things that has been animating over the years is a sense of some real convictions about what telecommunications means or ought to mean in this society and has meant and could mean. In terms of what you're doing now, setting up policy research here for Duke, and other similar kinds of things you've done with Rand in Commerce and so forth, what are some of the first principles or convictions you hold about what this industry ought to mean in this society, what it does for human beings, for our commercial life, our intellectual life, our social life?
GELLER: Diversity, I'd say that above all else it's a nervous system and that we've staked our all on a marketplace of ideas, on diversity, on competition, on private systems that were being able to flourish, and having really diverse and antagonistic sources of information coming to be known. But that's the bedrock. Democracy depends on an informed electorate. An informed electorate depends a great deal on the media, people having access to media, and media disseminating information ...
End of Tape 1, Side A
PAGLIN: Today is Tuesday, November 26, 1985, and this is David Paglin speaking again, here in Mr. Geller's office for the second session of the Golden Jubilee Commissions Oral History on the pioneers of cable television. Specifically, today I'm interested in probing you about some of your perspectives on early events in the history of the electronic media, at least as communication scholars represent them.
GELLER: The real development of radio and broadcasting, going into the home, really began in the '20s. The actual modern era of radio begins in the '20s. When it began there was no notion at all of how it would develop. The government had the weak act. The 1927 Act is not weak. The '27 Act is like the '34 act, it sets the same policy as the '34 Act. All that the '34 Act did was to incorporate the '27 Act so far as broadcasting was concerned. It had a common carrier and that was its base development, for one centralized agency.
But the beginning of it is anybody who wanted to begin broadcasting could do it with a license from the Secretary of Commerce. Secretary of Commerce, it turns out, can't prevent anybody from jumping on to another person's frequency, blowing up power. You have what has been referred to by Barnow and others as the Tower of Babble, and the engineering chaos and it's not inaccurate. It is so that the governmental line was weak. What is also very weak is that there was no genuine policy out there as to what was expected of broadcasting. Hoover makes the statement that has been quoted again and again that what a pity that it has just become chatter, it just goes over to advertising; what a tragedy that would be. He represented the government at the time. He never contemplated that this would be simply commercially driven but even in those terms, this is a public trust. But there is no policy at all in the 1912 Act.
When the engineering chaos occurred, when you had all these conflicts at that time, the government had to step in and regulate. The contrast between what we did in this country and what Great Britain did is enormous. Great Britain under Lord Reith adopted the plan of the government corporation, the BBC. It was chartered by the government, but it's supposed to be independent of the government. But that corporation was to bring broadcasting to the people and bring it in the way that would render public service so people received Shakespeare, agricultural programs, educational programs, and entertainment. Not a great deal of entertainment, but it was a mix and the idea was that this is an instrument that the government should take over, establish such a government corporation, and should through BBC 1 and BBC 2 serve the public in a way that would be a whole plethora of services, not just what was being dictated by commerce, or being dictated by commercials. There were no commercials. No commercials were permitted. Instead of that, it was to be funded by a set tax. People who bought sets paid a certain amount of license fee and that license fee was to support this mix of entertainment and public service.
But you can see, that when it was driven by that, you actually have a group trying to figure out what is the proper mix of education, culture, entertainment or sports. What is the proper mix we want to give the public and that mix is being dictated, not by what means the largest volume from my advertisers, but what do I think will best serve the nation. And as I say, it is a model which is British, but it has been so successful, it is emulated by Japan. Canada had a combination the way the U.S. did, both government and commercial and they got there earlier. The British system is now mixed as you know. But we're back in history and I'm giving you the Reithian concept of BBC and public service.
In this country we rely more on the marketplace. In the '27 Act without really knowing where radio was going, the idea was adopted of the public trust; that you give it to the private enterprise, you don't do a BBC, you license it to people on short‑term licensing. You do not give them any property interest in it. The fact of the matter is, it turns out they really own it. But if you read the law, the law says that they are the short‑term licensee and they sign something saying they have no property interest in that frequency. The frequency does not belong to the licensee. The government which is passing out the use of it and enjoining everyone else from being on it in order to prevent this babble, so that people apply. When they apply, they volunteer to serve the public interest. They must establish to a government agency, federal radio commission, later on FCC, after '34, that their proposal will serve the public interest. Then at renewal, in those days every three years, now five and seven; five for television, seven for radio, that they have in fact served the public interest.
The public interest concept was a very vague one. It had been adopted by Congress in the 1920 Transportation Act and it really varied with the particular media environment you were in. In this environment, it was not wholly clear what was meant by the public interest. It was left to be fleshed out in a very dynamic field by the industries subject to this overall regulation by the government.
PAGLIN: There was no model to be inherited from print journalism, at the time, as to how that public interest should be defined.
GELLER: No one really did know. It turned out that it was defined by commercial support and that commercial support drove the whole system. And in my opinion, it was a huge mistake made by the U.S. at the time. The reason that it was a mistake is that you should never adopt a structure that works against you. This structure worked against the accomplishment of the goals you had in mind. The goal was public service. Because the structure turned out to be based on commercials, was one where you could not accomplish public service. When you went to get it, the licensee, who was a businessman, even though he volunteered to serve the public interest is in competition. And the competition drives you to maximize your return to your stockholders. To maximize your return, you have to get the largest possible audience because that in turn gets you the largest possible return from advertising. Advertising demands the largest possible audience.
So the structure of broadcasting worked against, and in a nutshell, what would have been much better to do, would be to have a commercial system and allow that commercial system to go forward. But instead of giving people the rights based upon their promise to serve the public interest, tell them that they don't have to serve the public interest at all. All you want from them is money. Auction off some frequencies. Auction them off for ten or twenty year leases, with option to renew. You can argue about how long. If you don't want to auction, take the lease fee. The lease fee could be, since you can't figure out what profits are, that we want 5 percent of your gross revenue. After all, you're taking 5 percent of cable's gross revenue. And that would go into a fund. But use the money you get from the commercial systems, plus whatever else you need to supplement it, and establish a very strong public broadcasting system. That public broadcasting system would then be told that we want you to accomplish certain goals that the commercial system doesn't accomplish. The goals would be set by Congress and those goals would be very clearly in depth informational programming, cultural programming, programming for children.
Now you and I might differ on what the goals are. I don't think it's necessary for us to have complete agreement through acts of Congress. I would have the goals be local outlets, cultural programming, informational programming, programming for minorities, programming for the elderly, programming for children, above all, the latter. The reason why I say the latter is that children listen to broadcasting a great deal. You take television as a component, you can do it in radio also, but you take television, young children listen about thirty hours a week. They'll spend more time before the TV set than they will spend in school by the time they graduate. I'm not saying that children shouldn't have entertainment. Very clearly, they want entertainment just as much as an adult does. But it is clear that television is their window on the world, a very important window on the world. It shouldn't be the only one; parents, school, religion, friends, but television is a very significant factor in their lives.
It therefore ought to make a contribution to their education, to their feeling of what the world is about. If you're just going to watch the "Flintstones" or Sabrina the witch you're not going to get any, and therefore, you do need "Sesame Street," "Electric Company," Mr. Rogers, "Captain Kangaroo." You need programs that not only entertain, but the children need to receive in entertaining form, but also educating form. Tell them about mathematics. Tell them about the world. Tell them about minorities, about Asia, Africa, Europe, war. Give them real information
The commercial system is just a very large failure. If they're a public trustee, the way to do this would have been to say to them, you must serve children. You must not regard them as little consumers. Therefore, we want what is called sustaining program. The sustaining program is a program with no commercials. What should have happened was that they should have said that in the case of serving children, you are public trustees. Serve them without commercials. Do not put any commercials on for a certain amount of time for children's programming. Just give them the programming you think is best for them and that's educational in an informative way and without commercials, they would do it. With commercials, they treat the children as consumers the same way. The kid sees the commercials and says, "Mama, I want it," and so they're all geared toward toys and sugar breakfast foods and you've ruined it again.
But, what I'm saying is that there are really two ways to go. One is to set up the commercial systems subject to regulations and that's saying that I'm going to make this structure work for the public interest. It's possible to do that, but very difficult. To do that, you need to say I want X percent local programming. I want X percent information programming. I want X percent programming for children with no commercials. And if those are the ground rules, called informational programs for children, if those are the ground rules, that people when they come in 1934 and 1927 know those are the ground rules and anybody who volunteers has to meet them. And the system, perhaps, would have worked. It would have always had great difficulty. The reason why it would have always had great difficulty is that when you get this competitive thrust, they began shading information, in order to have larger audiences.
The only hope for it would be to drive off the commercials and say that X percent shall be in a sustaining basis. At that point, there is no longer any motivation to shade since you can't get any money out of it. You may actually deliver it. But short of saying you will not have commercials on, the structure works against you.
I'm not sure the better thing wouldn't be to do what Japan has done and that is let the commercial system go large. They call them public trustees but they're not. They're just out there making bucks the same way they are in America. And then there would be a lot of money to support the public systems. The money, I think, ought to come from the commercial part, try a tax on them. After all, you gave them something. You put them on a frequency and you enjoined everybody else from using that frequency. If you do that, why are you doing it? You might do it the same way you do off‑shore oil because you've auctioned it to them. Or you might do it because you gave it to them and they gave you back X percent of your profits. I don't care which way you do it, but you take back something from them, because you're giving them something valuable.
The government doesn't give a newspaper a right where they'll enjoin everybody else in starting a newspaper in town. On the contrary, it's a field of open competition. That's not true in broadcasting. If you and I want to get on and compete with Channel 4, we can't do it. We can't get a frequency. And if we tried to start our own on Channel 4 the government will put us in jail. So Channel 4 has quite a privilege from the government. And if it doesn't want to be a public trustee, and it doesn't matter what it says, then take the money and use that money--give it to somebody who is motivated to do children's programming, to do the cultural programming, to do gavel to gavel coverage of the Panama Canal debate. That's public broadcasting. And that way I would have a structure that works for me.
I would have commercial people out there racking up the money, and that's fine. And they also put on news, because news makes money. It costs a fortune and if you put on a Sesame Street or mathematical programs, the return isn't there on a cost per dollar. It's nowhere near there. People much prefer to put on the commercial independent, much prefer putting on the "Flintstones."
So what I'm saying is that two mistakes were made. The biggest mistake was to go the commercial route for public service. If you did decide to go the commercial route for public service, the second mistake was not to have the ground rules set up. You could have set up the ground rules saying there will be X percent local; there will be X percent informational; there will be X percent children's without commercial. Once you get beyond it, if you tried to do it now, you would be assassinated. You're going against motherhood. It's impossible. You just can't do it any longer. It's their frequency, no matter what the law says.
PAGLIN: Does the record show that there were some proponents of a vision something like yours and if so, why did not their voice prevail? And was it heard?
GELLER: There were proponents--educational non‑profit organizations--saying will the commercial system really do as we want in '34, and they made a mistake. In Great Britain they were much wiser, much sounder. They went first for public service and after they established public service, then in 1950, they introduced them. They introduced the commercial systems and by that time even when they introduced the commercial system, they made clear what the ground rules of the commercial system are. The commercial system in Great Britain does a hell of a lot more public service than ours. The reason why is they knew it when they came in that it was established that you had to do it and if you didn't want it you were going to get thrown out. It's a different system and I think a better one. I don't want to run it up as perfect but I think it works better.
We have the most flawed system. We have a commercial system that renders a great deal to the public and I don't want to denigrate that. The public wants entertainment, wants sports, wants music, and deserves all that. That's what they want, essentially, and I think that's wonderful and this system delivers that, delivers it magnificently. But when you turn from that and say but gee whiz just as the public needs libraries and needs public education, since television's such an enormous part of life, of children, of the public, we ought to use it to inform more. We ought to use it to educate children more. We ought to use it for culture and here we have a failure.
When we were doing the bicentennial, Channel 13 in New York, at great cost to itself, put together a production team, did a very good production of the Adams Chronicles, showing our history and our culture. That team disappeared afterward. It was gone. To do that they had to strip out and not do as much other public service programming, as much informational programming.
That's not true in Great Britain. Above all, the BBC produces programming. It has people there, producers, writers. It's there. It's permanent. It keeps on moving and producing, as you see, this Sunday, coming up, will be Bleak House. There is no such production unit here. There is no such established in‑house producer of worthwhile drama, worthwhile culture, worthwhile children. This thing just doesn't exist here.
PAGLIN: It's just not because we're lacking in talent compared to them?
GELLER: Oh no. We have the talent, you need the money to do that. The BBC is an enormous organization that costs a great deal of money. NHK, which does a beautiful job in Japan, of producing Japanese cultural programs, the old Samurai drama, drama that shows the history of the country, educational programming. They have newscasts on at 9 p.m.-‑ forty‑five minutes or an hour newscast.
PAGLIN: Have you ever been able to get a look at any of that Japanese programming here in this country?
GELLER: Not in this country. The little bit in this country, incidentally, is very good. PBS brought over some Japanese programs and captioned them. I thought they were beautiful. And they didn't even bring the best, but they were so beautiful. The dramas were very touching and they were done magnificently. They came out four years ago, but they were gorgeous. They were produced for Japanese television.
PAGLIN: Now I can see some parallels there between the Japanese film industry in the '40s and '50s and the Hollywood industry.
GELLER: All I'm saying is we made a mistake. Our commercial system does a terrific job. Our non‑commercial system is scarred. The figures-- you'd have to look at them. When I looked at them before we were spending $19.50 per person on the commercial system. When you figure it out that's what the costs were. And the non‑commercial system was funded at the rate of $1.50 per person in the U.S. When you went to Great Britain it was $4.50 for the non‑commercial and Japan was way over $5.00 and these are countries that are much smaller than us. In population, Japan has half our population. Its size is the size of California. But they're spending over a billion dollars at a time when we were spending about $650 million altogether. But this is for the entire system, you understand, in this very large country. And they're spending over a billion dollars on a country the size of California. The answer is that it takes money and we have starved the system.
PAGLIN: We see that TV has had tremendously dramatic impact, maybe more than any historical development in this century on our lives. I'm interested in hearing you talk about that impact.
GELLER: It's clear that television, because of its nature, because of the nature of the message has enormous impact. It goes into the home and you actually get a feel for the politician; so that our entire political system is now changed, and maybe for the worse. People point out that Abraham Lincoln would never have been elected. He had a high squeaky voice. He wouldn't make it. You need somebody like Ronald Reagan. The Democrats clearly are going to ... when Mondale asked where was his fault he said I wasn't good for television. My fault but I wasn't good for it, I just didn't come across well. And what you are doing is beginning to find that the images ... that television has enormous impact in that respect.
You see it also, to some extent in drama now, more and more and music, the cutting, the quick images. It takes precedence over the story line. The story line almost is irrelevant. The visual image is so strong and can impose such a blur, such a tempo, that again the impact is there just from the medium. From the medium itself, it has that. Beginning, I think, an argument can be made to affect our nature.
There's a book out by Neil Postman that just came out; I read his lectures before. I think that he's exaggerating but I do think that he has a point and that is we seem to see things through the prism of television totally, and want one thing, a happy ending always tied up. The violence isn't shown graphically, we don't get that in the future.
Somebody said that when they saw an airplane crash it looked just the way it did on television. It's unbelievable. Just as if he were watching it on TV. I don't know if we're going the way of the Romans, the way Postman argued, but certainly it does seem like we have to grab at entertainment. We don't have the patience that is required for digging, reading, and doing that. I think that the impact on society is very large.
I don't want to exaggerate. There are people who still buy books, they may be Harlequin Romances and westerns and adventure novels, but people are still reading a lot. But I do think that television has had an impact and some of the impact is not all to the good, it really isn't. If I sound like Postman or Gurber so be it. I think it's unfortunate that it takes up--I can't understand how those figures can be accurate--about six hours a day that the set is on. Must be the dog that's watching, or they're reading or doing something, they're having an argument, but they can't be watching six hours a day. It's just impossible.
PAGLIN: I don't recall it being like that in my house or the houses of people I knew well. It may have something to do with the driving ethic and balance with academics, I don't know. I think you're very much in the tradition of reflective criticism of the media and people like Postman and Nick Johnson and Boulding and Shiller who really said that any social medium, especially TV, has the power to erect constructs that govern a whole social system because of the nature of the communication medium, not the content. A lot of scholars answer by saying that you can't ignore content and that has some meaning too.
GELLER: No, they come together. But it has affected our elections and I don't think for the better. It's made them very expensive. Because it's expensive it has lead to the circus thing where the issues have become much less important. It's the image, the momentum, the spots. I don't think that's for the better. It has affected the children. It takes up an enormous amount of time of the kid and it is chewing gum for the eyes. It's not educating them. I think they would be much better off playing. Obviously, I think also they'd be better off reading a book or off with the parents.
It's had some good effects. No one would deny that television does show you what segregation was like in the South when Bull Conner goes after people with the dogs and the firehoses. It did show you the war in Vietnam. War was impersonal. It showed the destruction at An Loc in Nam and it has made war more difficult. Now you can see the war in your living room and that makes it damn hard to fight. But I don't want to make one way; it's done an enormous amount of things, but it also has trivialized, taken up an enormous amount of time that is just chewing gum. There's always chewing gum, there always will be.
In sports they argue the same way. No one is arguing that you shouldn't have it. The question is does it play an inordinate amount of time? I think the answer to that is that while Postman exaggerates, yes, I believe that there are negative consequences for children, for politics, for informed electorates, for the adult there are consequences that are not desirable. At the least, it seems to me, that the system ought to make available cultural programming. It ought to make available educational programming for children. It ought to make available worthwhile drama. It ought to make available the in‑depth informational programming. Even if only 6 percent of the people want to be informed, truly informed, on some large issues, they ought to have the opportunity to be informed. Twenty percent of the mothers get their children to watch the in‑depth worthwhile educational child's programming. It ought to be available for them to say, "Junior, you will watch that or you will watch nothing."
PAGLIN: Maybe it's not going to be so far away and there seems to me to have been, in the last ten years at least, a tendency for TV to be looking at itself more and critiquing itself more and certainly more and more studies from the Academy are coming out. Even Hollywood is beginning to look at TV and itself with a more critical perspective so it won't be considered just another form of entertainment, too.
GELLER: But the competition is very driving. The competition seems to be [???] both Hollywood and TV. You want the blockbuster. You want to be the number one network. If you're the number one network, it translates into hundreds of millions of dollars. And this is human nature, therefore, we want the blockbuster. Therefore, you get the invitations and so on.
I want to say to you that my field and the only field I feel expert in, is government policy. I don't feel any expertise to make like Neil Postman or Gerdner or the others. What I'm giving you is just my own view. What I do feel expert in is that the government set out and said they wanted the public interest served. They wanted local, they wanted informational, they wanted children. Those are all government policies in 307B of the Act and they're in 315A of the Act. I do feel very expert in saying that, "My God, this system is flawed." To get those policies, to get those things effectuated we took the wrong step in '27 and '34. This was not a way to gain the public interest goals that were set out and that I feel very confident about. And I feel fairly confident about the fact that the goals are not bad goals. Local programming is not a bad goal. This country is very pluralistic. We don't want Baltimore and Washington amalgamated. They're different communities. I feel very confident that democracy depends upon an informed citizenry. If you don't have that, if it's not informed, then you have a joke.
And television broadcasting is terribly important. Sixty‑five percent of the people gain their information from television. If that's true, it ought to contribute to an informed electorate. So I don't feel any hesitancy at all in saying that if children are watching so much, there has to be something worthwhile there for them. Child by child you build your nation. These are the future and if they're being cheated then we are cheating our future and so all these goals are good ones and to say to them that our system is one of public trustee and we expect commercial broadcasting to meet these goals, that's a mistake. It did not work because we did not set the ground rules and even if we had set the ground rules, wrong structure. At least it would have been better, but we just never set the proper ground rules and now it's too late to set them. The industry now is calling the tune, not the government.
End of Tape 1, Side B
PAGLIN: Now what would you say, in terms of the coming technological developments that are immense, Barnow was writing in say, '78 or so, and he only eluded to some of these.
GELLER: I think that the technological developments are wonderful. Let them have their place in the marketplace and let's hope that they contribute. For example, cable may bring the CNN, C‑SPAN, Nickelodeon, others that add to children. Lifetime, others may have health funds, arts channel, and so all this adds the diversity that's a huge plus. It also, however, is a pay service. It's limited. Penetration is 43 percent. Levels off after decades of operations to 5 percent. I don't think this obviates a need for this type of broadcasting system that I was talking about. Broadcasting reaches 98 percent of the American people--not 43 percent. I think it's important that in doing so, it makes the contributions we talked about.
Therefore, very pragmatically, I would take the system where it is, I would deregulate it but at a price. Inspect the usage fee and I would move that money over to more directly accomplish the goals that I was talking about. It is not a panacea, but it would be a large improvement over the present system. If you keep the present system, you must make it objective. To make it objective, the only way I see to make it effective and objective is use percentages that require 15 percent local, 20 percent informational, hours 6 a.m. to midnight and the same hours prime time, that percentage to require certain amount of children's programming and to require it on a sustained basis.
The howls would be unbelievable. But that would be the only way to make it effective. There is no other way to make it effective. And it's not going to have to happen. Therefore, I'd be more inclined to say, "Hey, go your way. I relieve you of your obligation. I'll prevent anybody from jumping on your frequency so I'm still giving you quite a governmental privilege." It's very scarce--these governmental privileges. Look at that, in Los Angeles, $510 million for a TV station. Boston, $450 million‑-physical assets are only about 30 or 40 million, the rest of it is a piece of paper the government has given you. I want money and I can't option it anymore. There's been a private option, that's what the $510 million represents. You and I just didn't benefit from it, that's all, somebody else benefited. But I would now like 5 percent of the gross revenues or 2 percent or 1 percent, whatever I can politically get. I don't think I can get more than one but I'll take the one.
In radio you get $40 million. MTR is only funded at the rate of 12 million and they're having great difficulty. Television, before you're done at 1 percent you have about 130 million. One hundred thirty million won't buy you paradise but it's a good addition because the federal government is only supporting broadcasting at the rate of about 200 million so they're adding over 50 percent increase and that would be very helpful.
PAGLIN: I'd like to ask in conclusion, do you perceive there to be any progress as you have truck with, so to speak, figures in the industry who are broadcasters, who are owners, executives, maybe creative people, in terms of their changing their capacity to look at what they do?
GELLER: But there are some good broadcasters. It's just that they're in a minority. Post-Newsweek station run by Joel Chasen are excellent stations with a commitment to public service. The CAO city stations have a fairly large commitment to public service.
PAGLIN: And you see this in what they do, not what they say, in other words, not their stock defenses.
GELLER: But even they have limits on that. Joel Chasen will tell you that Post-Newsweek can't solve the problems of worthwhile children's programming. They can't, that's a network problem. It's not produced by the networks. Westinghouse is a fairly good series of stations but they can't solve the problems we've talked about. They can't develop an Adams Chronicle, they don't have the wherewithal to do that. This is a different system. The networks can do it. The networks are locked in a mortal combat to win every damn rating period and all they're doing is fighting chewing gum for the eyes, who gets the largest audiences, who gets the strongest ratings. So what I'm saying is there are worthwhile broadcasters out there, but they can't solve the problems we've been talking about. The system is wrong. And there's no way to do it with this system and therefore, I would change it very drastically.
PAGLIN: On a slightly frivolous note, to wrap it up, I wonder if you have HBO and you've been able to see their new spin‑off of "Not Necessarily the News" which they call "Not Necessarily Television." Talking about ratings competition made me think if I can somehow tape this, I must do it. It's probably the best comedy I've seen on TV.
GELLER: I'll try to look for it.
End of Tape 2, Side A
PAGLIN: Good Morning. This is June 19, 1986 and this is David Paglin, the Oral Historian for the Golden Jubilee Commission on Telecommunications. I'm here, once again, in Mr. Henry Geller's office for the third interview in our Oral History Series exploring the early years of cable television.
Good morning, Henry. Today, finally, we've arrived at the point where we can begin, at least in part, our major task for this project--to explore the early years of cable television. I'd like to ask you to talk a little bit about the very earliest period of the late '40s and on through the '50s prior to and probably not including the earliest part of your own entry into the regulatory and jurisdictional questions, that is, before 1962 or '63 or so. And so if we can begin, I'd like to know first something about the very start of your work at the FCC which I think was in 1951. What was the climate like there in terms of the agency's perception, let's say, by the industry or the rest of the government or by itself even?
GELLER: Well, the agency was full of very energetic, bright, able people and the New Deal had attracted such people to Washington and they were still there. The Roosevelt legacy was still in force and there were just as a sidelight, for example, people like Harry Plotkin--very bright, able guy who finished very high at Harvard could not get a job at a New York law firm and these people were attracted to government then as an alternate way of life. They may have been attracted in any event to it, but they were forced into it and the government was a beneficiary of getting very, very bright people who today would drift to a Wall Street law firm or a very large Washington law firm.
But in those days they went to Washington and they were there. A series of them. And they were very bright and energetic but very public spirited. They believed in the act. They believed in regulation to serve the public interest and therefore what you had was a very vigorous agency in the late '40s and early '50s.
PAGLIN: What about your own role at the Commission at the very time that you began there. What was that like and did that have any bearing upon the very earliest things happening with CATV?
GELLER: No. I began the broadcast bureau and it worked in the FM section under a very able lawyer named Hilda Shea. I was under Harry Plotkin and we were all kind of Harry's children you might say and learned from Harry. That really set the stage for my entire legal career working under Harry Plotkin. But I was not working in the cable field. No one was working in the cable field. Cable had originated in the very late '40s but it caused no problem at all. People couldn't sell sets in certain towns. They realized that in order to sell sets they had to bring the signal in. Therefore the TV salesperson in Oregon and Washington and Pennsylvania would go up to the mountain top, put up an antenna and run a co‑axial wire down and then run it by the homes in order to sell TV sets and that was the origination of cable.
There are various claims whether they originated in the far west, in Oregon or Washington or whether it originated in Pennsylvania. But that posed no regulatory problem. Cable began posing a regulatory problem only in the '50s and the reason why it began doing that in the '50s was that it was still traditional cable. It was in the very small markets. It was bringing it in a market like ... Just take Riverton, Wyoming, it would bring in the Denver signals. It would do this either by putting up an antenna and bringing them or by using microwave to bring them in. Either way you had to go just outside the Denver area where there was a strong signal, receive that signal and relay it every twenty-five miles by means of a microwave tower. A common carrier would do it or you could build your own. But for the first time in Riverton, Wyoming there was a single local station. I'm using Riverton as an example.
You could use Rapid City, South Dakota, you could use anything you want to. The problem that cable posed was that in Riverton, Wyoming, the station has a total base of about 77,000 TV homes--its very sparse population. And if the cable system brought in Denver, people would then get all of Denver's signals in Riverton and in Moreland and in places like that. They would sign up for cable and if the cable system did not carry the local station, the local station was cut off from reception, people would take down their antenna. People wouldn't put a switch in the back. After all, the thing that people wanted most was not local programming. They wanted the network programming. That's what was selling in America in the time we're talking. And if you can get the "Bonanza" program from Denver, what do you care whether you watch on Denver or whether you watch it on the Riverton station. And the Riverton station, therefore, was saying and the saying is true of Kalispell, Montana that we're being done in. We're not carried on the cable system and our network programs are being duplicated. The station makes money out of the network program by having certain adjacencies for the local Chevrolet dealers and so on.
And if you were watching "Bonanza" from Denver, and remember that the local Chevrolet dealer is in the town, too, and is probably on the cable-‑he says why should I advertise on you, I'm paying a lot of money for Kalispell or Riverton a lot of money and you're not giving me anything. Your audience is watching Denver. So in the late '50s the Commission began studying cable television. They began studying whether cable was a common carrier. They began studying what should it do. And in '59 it issued a report for the first time--the first one of reports on cable TV. In that report the Commission concluded that while they might be able to exercise the jurisdiction over cable based upon an impact theory, a Shreveport theory ... Shreveport is a Supreme Court case that said that the ICC could regulate an intra‑state railroad activity because of its impact on inter‑state.
And while the Commission may have the authority to do this type of Shreveport because of impact, they declined to do so. They did not take any action at all. And that's where the matter stood with the Commission saying they're not sure they had jurisdiction, not asserting jurisdiction and being quite passive in the face of complaints from the small broadcasters. You have to realize, cable is nowhere near any major market. No one believes that cable can operate in a major market at all. It's a way of bringing in needed and missing network signals in the small markets.
Everybody regards cable as a blessing except in markets like Riverton and Kalispell where there is a serious policy issue--will it do in the local broadcast station, will it injure the local broadcast station. You can say what's the harm-‑ you always have the cable system but you have to realize that cable only reached the major cities. You have to smile when you say major cities because Riverton and Moreland aren't your idea of major cities but the fact of the matter is that's the only place you can string cable. If you were going out to the farm houses it would cost you in those days thousands of dollars, maybe $5,000 a mile to string the cable. The guy is only going to pay you about $10. You can't string something for $5,000 a mile in order to get $10 for one so you wouldn't serve the farm houses in as far an area.
Of the 77,000 people within that TV area, only 33,000 homes live in the major area where cable was. I'm just using Riverton as an example-- 44,000 homes would be left without any service if that TV station went off the air. Those are not good numbers. You can't very well say that some people should get a lot of service at the expense of other people getting no service. The other thing that was that the cable service was not a local service at all. Again, you've got to realize back then, all it's doing is bringing in Denver. And so if you had a local race, the mayor's race in Riverton, Wyoming, anything like that, they wouldn't be covered by cable. It was bringing in something hundreds of miles away. Only the local station was covering local news, local weather, local political races. So that you were also cutting off the local outlet.
PAGLIN: Now what advantage would the system owners have seen in this duplication or slighting the local stations--economic advantage--and why should they do that in as much as it's almost certain to stir up some sort of objection, some sort of friction?
GELLER: That's a very good question. I have no idea why when they went to what is called a twelve band the larger band, they still did it. The reason why it began the problem was that the early systems only had five channels and on five channel systems if you brought in distant signals there might be no room for the local. They were all businessmen and what was selling wasn't the local. What was selling, because the local was just what they call cherry picking, putting together all three networks, if you brought the three networks in full from Denver and an independent from Denver or possibly an educational or something, you might be better off as a businessman. And when you got to twelve channel, most twelve channel systems, I think, would carry the local stations. It's foolish not to do it. But even then, there might be a few that wouldn't do it because they might be bringing in Spokane and Denver or something and there might be bad blood.
There's one other thing, too, and that is that none of them wanted to give the local station non‑duplication. The reason why is to do that is an expense. It could cost you several thousand dollars. You have to set a clock in order to do it. The clock sometimes misfires or something happens. It's just a nuisance and no businessman wanted that so that while most of them I think your question is quite good--ought to have carried the local stations, none of them would give the local station non‑duplication. So even if it were carried for the valuable network programming and adjacencies it would just be a matter of luck which one you watched. If you were watching Denver more you'd stay locked to Denver. Why switch the stations. Furthermore, sometimes the local station gets the program after Denver. The distribution in those days, remember no satellites, the distribution in those days might be that the local station played "Bonanza," the episode of "Bonanza" may be two weeks after Denver played it so you would get more current by watching Denver. You'd see it sooner. You had to bring it--it was a different way--way back in the early days of television. And now even in the small market you'd receive it through a satellite dish the same time as Denver would. But it's an entirely different ballgame.
Anyway, what happened then, this is the early '60s, Kenneth Cox came on the Commission first as the chief of the Broadcast Bureau and three years later went on as the Commissioner. He came from the state of Washington. He had held hearings and knew all about cables--CATV.
PAGLIN: The hearing were held here at the Commission?
GELLER: No, the hearings were held on the Senate and Ken was counsel for the Senate. He was the staff counsel. He knew about cable. He came on knowing full well what cable was and he came on with an agenda. And his agenda, because he had talked to small broadcasters, was I want that local station carried and I want its programming not duplicated. This is the time when I began working in cable also. Newt Minow, the Chairman, called me in--I was Deputy General Counsel--and to Max PAGLIN: who was General Counsel he said there was something called CATV and it's a big mess. Find out about it and get the mess off my desk. So I began meeting with two people. One was a man named Strat Smith and the other was a guy named Bob L'Heureux. They represented the Cable Television Association--NCTA.
PAGLIN: Does that still exist in that form at this time or has it been modified?
GELLER: No, it exists. It's going through a lot a membership changes. It's a different organization entirely in the sense of what it's drive is. But it was a national cable television. There is one difference and that is in those days the name of it was called CATV--community antenna. They changed their name some years later. They're called National Cable Television Association from Community Antenna Association because they ceased being a community antenna and began doing origination, doing their own thing. Now you see an industry which is really on the move today and along with VCR's, the challenging force to the established commercial system is cable. Cable is now a $9 billion industry. The commercial television industry is a $20 billion dollar industry. But you can see that it's a big industry.
PAGLIN: If I can hark back just a bit to before Ken Cox came on the scene and you can think back to some of your colleagues on through the '50s as local cable is burgeoning and growing fairly well too, I think, six or seven hundred systems or something like that ‑-maybe three quarters of a million subscribers. Were there clear lines of policy taking positions being formed even then, even before Cox came on the scene and began to press the issue. And can you recall some of the early origins of what later might turn into not policy disputes as such, but different sides of the question taken at the Commission itself?
GELLER: The different sides were really two‑fold. One was to treat it as a common carrier and as I recall a guy named Stanley Newstaff worked on it and worked up a memorandum to argue that cable should be treated as a common carrier. It was a wire. It was similar to telephone. That was not adopted by the Commission. The Commission did not adopt it when Stanley was there in the '50s and finally issued a decision called Philadelphia TV in which it declined to treat it as a cable TV. That decision was issued about 1962. Stanley's work was done in the late '50s--probably 1958/59 before he left for private practice.
The other issue was the one that I talked about-‑ what is the impact of cable in these smaller markets if you don't have carriage and non‑duplication of the essential network programming. That other issue lingers, and has lingered to this day, and it never went away. As I say, the earliest studies of it was ... yes, it's an issue but let's stay out of it.
PAGLIN: How are those studies done? In other words, how would the Commission gather data from viewers, from industry spokesmen in these small markets? Do they call them on the phone? Do they have them come to Washington?
GELLER: They issued, as I recall, a notice of inquiry. And the material came in in the form of comments. You better believe also that the people came in and saw the Commissioner. Those who were hurt would come in and do that.
PAGLIN: Did you ever talk to any of these visitors to the Commission?
GELLER: I didn't. They saw Commissioners much more than I. Maybe I did, but I don't recall. I was not a big part of it. They wouldn't come down to me. I didn't begin working in this until '62. At that point, believe me, I began talking to an awful lot of people and was inundated with it but I did not talk to them in the '50s at all--was not involved with it at that time. I would assume that the guy who ran that in the General Counsel's office--a man named Buck Slosberg--talked to a lot of people. But he was the architect of this '59 report, the Shreveport report, that said yes we can do it but we're not going to do it. I think it's fair to say that that report in effect has kind of sloughed the issue, put in on a back burner. What it said was, yes it's there but we don't want to handle it and we'll wait and see what develops.
PAGLIN: Could it be foreseen that certainly developments would occur that would press this upon the regulators at some time, perhaps in the not too distant future?
GELLER: It might have. You might have been able to foresee that it would continue to grow. There was an enormous appetite for television. If you didn't bring television in, and you have to realize that what this is is a failure of the Commission's allocation plan, that they were not bringing people service they needed. Cable was rendering a very good service in bringing in that. People want all those networks. They're entitled to them. They ought to get them. This was a failure of the FCC-‑ not bringing valuable service to the American people.
PAGLIN: And that dated from the Sixth Report and Order?
GELLER: The Sixth Report and Order simply mucked this up. They did not do the job. And as a result of that, as I say, this is a demand. They were filling a niche that the customers out there were screaming saying, "we want." It's true that the penetration levels off at 55 to 60 percent. But 60 percent of the homes out there were saying we're willing to pay to get this service. They were withstanding the test of the market. You could figure that it would keep growing, that there was this appetite for network cable, for network television rather and therefore the problem wouldn't go away. It would continue to fester.
PAGLIN: And perhaps the appetite for augmentation of services, origination and those kinds of things would ...
GELLER: That was not anticipated. No one thought it was going to do anything. We were all lulled into that. CBS issued things that cable could only succeed where there was a missing network service. That's their belief. I'll give you chapter and verse put out by them and others that it can only succeed where they are missing over the air networks.
The two big shocks that cable produced was that in the early '60s (1961) cable went into San Diego. San Diego has all three networks. On the other hand, terrain is a little bad and it's within the range of the Los Angeles signals we had cable. They don't need any microwave. All they have to do is stick an antenna up and you can start distributing a dozen signals. But cable began moving in San Diego and that came as somewhat a surprise. There are no missing network signals.
The biggest surprise occurred in the mid '60s beginning in '65 where cable begins to enter the larger markets. And the reason why is that you're building microwave carriers or bringing Los Angeles signals all across New Mexico, Arizona, into Texas. You're bringing Denver and Chicago signals all the way around. Again, the microwaves are going out so that to drop a spur off them is nothing at all. The New York signals--the independent, WPIX, WOR, the Yankee baseball games--are moving out from New York and going all across New York State and Pennsylvania and are proposed for Dayton, Ohio.
At this point we're getting a little ahead but we might as well state it, there are two other developments. One is that the Commission did the All‑Channel Law in 1962. The Commission had botched the allocation of UHF and VHF by intermixing them. UHF wasn't succeeding. To break that open, and remember the FCC had allocated an enormous amount of spectrum to UHF, 70 channels-- it had gone to Congress and said that every set sold must be capable of receiving UHF. So the American people are making investments in sets, and the Commission had staked a great deal on the success of UHF.
In Dayton, UHF was beginning, for example, to come on the air. But at the same time, cable is bringing in New York stations. A real possible threat. You could argue it both ways. You could argue that, "Oh well, UHF is a handicap even with the All‑Channel Law." When you're on the cable you receive just as well as a V. So it does help there. On the other hand, it fractionates the audience, too. If you are a Dayton UHF independent, or UHF independent in San Francisco, you have the whole market to yourself. If you begin with cable in the cable home you can face very powerful competition from New York and WGN in Chicago, from all kinds of ones and the audience is being fractionated a great deal.
PAGLIN: And for beginning UHF stations that's practically impossible.
GELLER: Well it causes a difficulty, no question about it. There's another factor coming in here--two other factors that ought to be acknowledged. One of them is that there is an Association of Maximum Service Telecasters that is a lobbying group--the Fat Cats, the VHF broadcasters largely. They're very powerful.
PAGLIN: I've never heard anything about them. Let's hear about that.
GELLER: They're still in existence. AMST, the Association of Maximum Service Broadcasters, hired Covington and Burley. It had a very powerful lobbyist named Lester Lindow, close to Magnesson and others. It hired a very good law firm, Covington and Burley. The chief job that they were doing in the late '50s and early '60s was to fight off VHF dropping. If you dropped in a VHF, it was adding competition to all these fat cats and they wanted to fight that. And, therefore, they supported, for example, all channels because they didn't mind UHF competition. They could beat the hell out of UHF. They just didn't want the drop in of VHF's.
They won that fight in '62. Because with the all‑channel law the FCC gave up the drop‑ins. We figured we would get much more by getting a nationwide system of UHF. The drop‑ins would only help, at the time maybe about 12 cities. So they made the deal. The reason why I tell you this though is that trade associations don't like to go out of business and when they won the VHF drop‑in fight they wondered what's the next fight we can do and there was cable. Cable moving on to Dayton, Ohio. Cable threatening to fractionate their audience. And they began fighting cable. And they were fierce fighters. They're no longer, but at that time that was powerful organization. So AMST, in order to stay in existence I believe, began training its gun on cable.
Other factors that you have to bring in is I have no interest and never had any interest in protecting the broadcasters with the exception of the small broadcasters in Kalispell. I really did believe that cable ought to carry and not duplicate its programming. I believed in competition. I've always been a strong advocate of it. My problem was, and always has been and still is with cable, that cable seemed to me to be another means of distributing programming. And that it stood outside the competitive TV programming market. It was getting its program just by picking it off the air and moving it around. If I sold a program in New York--I'm MCA or Warner Brothers or anybody you want--and I sell a program in New York City and I sell it exclusively to the station in New York, he bids and he pays for it and everybody agrees that's reasonable. I can get a movie package for five years if I pay enough money and I have the exclusive right to that packaging in New York City. And I trust everybody says that's fine. That's the way the market works. The same way you bid on movies out here and you can run a movie for six months or whatever in a theater.
Cable didn't pay any attention to that. It was not within the 1909 Copyright Law. There were suits to bring it within it. The first suit was called Fortnightly and it was brought in West Virginia-- Bluefield, West Virginia--Clarksburg and so on. Clarksburg was the actual city. I was horrified by cable's ability to move signals around without regard to the market. It didn't make any sense to me. In Dayton, Ohio when the guy went to sell his program he'd find that the program had already been brought in by a cable system bringing it in from New York. The same movie package ... he goes to sell it in Dayton and he finds that it's already there in Dayton on the cable. And that didn't make any sense to me. I'm a strong believer in competition. The competition ought to be fair and fair competition is that everybody stands and bids for programming. You don't reach in and say to a UHF station, "I'm going to give you some programming free because I want you to succeed." You don't say to RCA, remember when they were doing the disc, "My God, you're having a terribly hard time. How can I get you some programming?" That's not the way the market works. The creative guy, the guy who takes the risk, the programmer, deserves to control his product and to sell it to the highest bidder.
If you have a prize fight, for example, a heavyweight fight, you can black it out and make everybody come. You can sell it to closed‑circuit television. You can sell it to theaters only. You can sell it to broadcasting but black out New York City if it's in Madison Square Garden. All those things are reasonable judgments by an entrepreneur who is taking the risk and wants to maximize his return and that's the American system. You don't step in and say, "Gee, we want everybody to get that prize fight." If you put it out and give it to one station, anywhere in the U.S. it can come back into your blacked out area. It doesn't make sense to do that.
PAGLIN: In terms of the dichotomy of that very issue that you're looking at now, how did people in Congress line up and who were some of the prominent names that come back to you in terms of what they said to the Commission, their relation with the Commission and the industry and so forth?
GELLER: What was happening was that there was a suit in court to say this was a performance under the Copyright Law and so Congress is waiting on the court suit. The cable industry did make a massive effort to cultivate a few key Congressmen and they got to McClellan, and he headed the Copyright Committee of the judiciary. They hired his son to work in cable and they gave his son stock. They gave McClellan some stock, too. They went all out to get that key figure and they got it. I think it's just a bribe, you can quote. I think it's terrible what went on. But they do it all the time.
PAGLIN: Was it well known that that went on?
GELLER: You can look it up in TV Digest that they hired his son for an Arkansas slot. They cultivated McClellan like mad. They couldn't get copyright legislation passed but they could certainly block it very well to McClellan. And meanwhile the suit is progressing. I thought, and now we come back to something, that if I could hold up the development of cable until the copyright suit would decide, that cable would then be brought within the competitive TV market. That's all you needed. We would then grandfather the old systems. It would be too disruptive to take them out and they were bringing needed service. They would be grandfathered. They didn't matter a hill of beans anyway because all the revenues are coming out of the major markets and remember cable isn't very developed in the major markets at all. You grandfather all the systems that are out there. You require carriage and non‑duplication and you forget about anything else. You don't need anything else. And you only require the carriage and non‑duplication as to the grandfathered systems.
As to all new systems, they are like a guy named Pat Weaver in California. Pat Weaver started something and the government didn't have to interfere in that. That was something that was totally in the market. So you didn't need any government intervention here at all. It was another means of distributing programming to American people and there was no reason to intervene anymore than when VCR's came along years and years later. Why do you need the government to intervene on VCR's?
PAGLIN: Well, if that was your idea at the time, what were the ideas in the heads of other people at the Commission in policy making positions?
GELLER: There were different ideas. Some of the commissioners wanted to stop cable because they were influenced by AMST. And they wanted to stop it because they felt that it would menace UHF whatever reason AMST had lobbied them. They really wanted to stop the competition.
PAGLIN: These were commissioners appointed mostly by who?
GELLER: Bob Lee was very strong for UHF therefore he believed very strongly to stop the competition. Rosel Hyde wanted to stop the competition. There were people at the Commission working in the cable areas who were strong advocates for cable. I was general counsel at the time from '64 on and I wanted to halt cable's growth in the major markets until it came within the competitive TV programming market. And you had various factions. Some of them pro broadcasters; some of them pro cable; some of them, as I say, pro what I call the competitive TV programming market.
PAGLIN: Well I've run you through your allotted time today. I want to hear more about these factions next time. This is exactly the kind of thing I wanted to home in on and I'll come prepared with more questions. This is fascinating to me because I've been reading all about it lately. Thanks again for your time today, Henry, and have a good trip to Munich.
GELLER: I'll be back in a week.
PAGLIN: All right, we'll be talking to you then.
End of Tape 2, Side B
PAGLIN: Good morning. Today is March 12, 1987. My name is David Paglin. I'm the Oral Historian for the Golden Jubilee Commission on Telecommunications and I'm in the office of Mr. Henry Geller for the fourth in our interview series with pioneers of cable television. Could I ask you to describe the process of the FCC generating any one of the important legal positions say in '59 or '66? How did the components interact? What was the role of the Cable Bureau--contacts with Congress, lobbyists and so forth? And as it proceeded from day to day to the point where decisions and rules were made, what does it feel like to be there as interacting as part of that formative process?
GELLER: The reaction really was to events more than anything else. From '59 until a period in the mid '60s, the reaction was to the fact that there was a need to solve the problem of cable in the smaller markets. It shifted with the explosion of cable out of the smaller market and its appearance in San Diego and Dayton, its being carried by microwave across the country and at that point there was a different issue in cable. It was cable now entering larger markets and what were the problems that it holds. But in each case it wasn't that the FCC would come and say, "Hey, let's reach out and do something about it." It was almost always a reaction to something happening out there.
In the early days it was at a station in Riverton, Wyoming and Kalispell, Montana. Some small stations would say this is not fair. Cable has invaded my area. I'm not being carried by the local cable system. My programming is being duplicated. I serve a sparse population. I will go under and the people will be left without service. Do something. And that lets the legal issue do something, to have jurisdiction over cable. If you have jurisdiction, jurisdiction would be watched. And if that issue concerned the Commission in the late '50s leading up to the '59 one.
When the Democrats came on board and Ken Cox became the chief of the Broadcast Bureau in 1961 it became a driving concern of the Commission at that time because Cox had been counsel on the Hill. He was thoroughly familiar with the issue and he was determined to take action. But again, Cox's reason for taking action didn't stem out of a vacuum. It stemmed out of Hill hearings. People coming. Broadcasters coming saying, "Do something."
What I'm saying, too, is that the activity of the Commission stemmed a great deal from industry yelling that there's a problem and the problem has to be solved. And I would always separate the problem in two forms. ‑One is the problem of cable in the small market which occupied the Commission up to a point in the mid '60s, and the second and more important and more difficult problem of them is cable in the major markets.
And then finally when you reach the '70s you have cable as an antigen to itself developing its own programming because the satellite has come and made possible an entirely different form of cable operation. So you have a third face of cable regulation because of the coming of the satellite. But you can divide in kind of those three parts.
PAGLIN: Were there prominent personalities that emerged whose voices you can recall who may have made contacts with congressional committees before pressure was put on the FCC? Prominent people from some of the trade association you were mentioning last time.
GELLER: I think one of the things you have to recognize here, I was not that active in the cable area until Newt Minnow asked me to do it in 1962. Prior to that time I'm not helpful to you because I did not participate. Bud Slosberg did in getting out the '59 report. Other people did. Cox as I say was very active in it. My activities stem with Newt Minow calling me in in '62 saying we have this problem with cable television. I want you to work on it and resolve it. Before then I just was aware of the symptoms and was watching the problem from a different vantage point. After that I became integrally involved in it and stayed involved in it for the rest of the time.
The industry people whom I was involved with to begin with on the one hand was NCTA represented by Bob L'Heureux and Strat Smith who was obviously not active also in the matter. When I picked it up in '62 those were the people. They in turn are reporting to a number of industry figures--Malarkey, George Morrell, the Midwest Video. There are a whole group of people who are very actively involved in the industry. But my dealings are with their two representatives, L'Heureux and Strat Smith. We had meetings on how to solve the problem, what would be the appropriate legislation to solve the problem and we were talking about both administrative or legislative resolution to the problem.
There is one other factor that enters very strongly from the broadcast side. It is not the small broadcaster. It reflects in my opinion the fact that industry association needed a cause. There is an association called the Maximum Service Telecasters, referred to euphemistically as the Association of Fat Cats. Up until 1961/62 its cause was to prevent VHF drop‑ins. What happened was that that cause ended in '62. And the reason why it ended was in the way that AMST lobby was, and I worked on it very heavily, was that with the All‑Channel Law passage in '62 ended the threat of drop‑ins.
So you had an association out there headed by a man named Lester Lindall. You had a lawyer, Covington and Burley represented by Ernie Janess, a very able lawyer and they needed a cause. Associations need a cause. The last thing they want to do is say, "Gee, everything is wonderful and you don't have to contribute any longer to the association. You have no danger. Let us disband. You don't have to pay us. Lawyers for the association want cause and the association chiefs want cause. And there was cable. AMST picked up the cause of cable and the way they picked it up was the drop‑ins and the entire fight about all‑channel had been to promote UHF and with the turn in the early '60s of cable now going into San Diego and beginning to move out and going a few years later into Dayton, proposing to go into Lima, Ohio and into Texas.
The microwave links were beginning to pick up and move Los Angeles signals east and New York signals west--New York independents. You would just drop them off in town after town. Remember at that time there were no satellites obviously like the distribution there is today. AMST becomes very active and they are pressing for regulation also. So what you have on the one hand is a festering problem in the west about the small market one and the beginning of a problem of cable invading San Diego, Dayton, Ohio, the UHF stations are coming in.
The All‑Channel Law is meant to be effective and you have AMST coming in saying, "For God's sake protect the UHF." The negotiations that I had at that time with Strat Smith and L'Heureux focused first on the problem of the small market. The resolution of it by carriage of the local station and not duplicating its network programs, the local adjacency, fifteen days before and after.
PAGLIN: Was it difficult to work that out with those two guys? I'm wondering how long a period, was it a lot of wrangling?
GELLER: It was a lot of wrangling. We had meeting after meeting after meeting. I think my recollection is, and you can check with Strat Smith who is still alive, we must have conducted these negotiations over a good nine months. I thought we finally made a steady progress on where to go. We were hung up a little bit on some technicalities that are going to be looked back on that aren't very important. But there was general agreement on our concept of carriage and non‑duplication. There was some question about how long, what's the hierarchy, how many stations? But you've got to remember that these are small systems. A big system is a twelve channel system.
The thing shifted somewhat with the entry of cable into the major markets and that became a more difficult issue. What you have coming there is Cox pushing to use the microwave link first to assert jurisdiction. We issued a first report on that in '65. The first one, the Carter Mountain case. That was a very difficult case but that established our jurisdiction over the microwave and CATV. Using that victory in Carter Mountain we went ahead to do the first report.
PAGLIN: By victory, which courts heard the case? Do I understand the Supreme Court upheld you but didn't hear the case?
GELLER: We won in the Court of Appeals. Don Obaum argued the case. We won. It was not an easy issue. They sought court denied cert and therefore we had the ability to move forward on microwave systems. The people who worked on the first report were essentially Ruth from my office and your father's office and the other one was Joel Rosenblum. Joel was working out of the chairman's office. We're now talking about Bill Henry's time. Joel worked with Ruth and I was kind of in overall charge of it. We presented the item then to the Commission and that is the first report in '38 FCC. I thought it was a rather good report. I think Joel and Ruth did outstanding work on it. It was well written, well analyzed.
We moved forward then with notice after the first report to deal with all the cable systems even those that are off air. To do that, at this point, I'm picking it up rather than Joel and Ruth and that second report was done, jurisdictional argument, was done by Mike Finklestein in my office. Mike and I worked up the legal theory. The legal theory was, I think, a very simple one. The divisions of the Act are applicable to interstate communication by wire radio. Cable, we said, came within the definition of interstate wire radio. If you look at the definitions, it fits it because it's extending the service of a radio station that's interstate and comes within the definition of communication by wire or radio. Therefore the provisions of the Act are applicable to it under two‑way.
We therefore could use our rule making authority to carry out the provisions that are applicable. The provisions we looked to were 303H and 303S. 303H said we could define the service area of stations and 303S was the All‑Channel Law saying that UHF was to be [???] and we said the carriage of cable, of distant signals could pose a problem to the development of UHF because distant signals being brought in were largely independents. They would bring in a network they were missing but they were largely independent. The new UHF's were largely independent and therefore you were fractionating the audience. That posed a problem we wanted to look at.
The second thing that we said was that the competition was unfair and it was unfair because the cable system stood outside the competitive TV programming market where as the independent stations had to get their programming in that market and well over 40 percent of their costs were involved in programming and yet the cable systems had no programming costs, they've seemed to have picked it up. We therefore adopted the second report. The Second Report essentially froze cable development in the top 100 markets. It froze it saying there had to be an evidentiary hearing before you could bring them in. We did go for it with an evidentiary hearing.
PAGLIN: Now what is that like? Tell me as a non‑attorney what an evidentiary hearing accomplishes?
GELLER: It is a huge spanner in the words because the evidentiary hearing takes several years to finish. That means that in effect no one could start a cable system carrying distant signals in the top 100 markets because they would have to go through a two to three year hearing. At the end of that hearing they might also lose. At the end of the hearing in San Diego we did hold that you could not bring in the distant Los Angeles signals and the result was, this is in what is called the Midwest Video Case, the result of that was that in a sense cable could not develop in the major markets, the top 100 markets with distant signals.
But it was through procedure and process. It was a conscious strategy. I want to go back and say throughout it the strategy that I was following was one that depended upon one thing and one thing alone, and that is that cable stood outside the competitive TV programming market. That made no sense. It was a manner of distributing programming, and therefore my strategy was to wait for the copyright cases, to hold back cable's development in the major market until the copyright case was decided. That was a case called Fortnightly in 1968. My view of the matter was that cable was sure to lose the copyright case because after all it was looking at the precedence.
Cable was doing a performance picking up the programming and moving it around. It was moving it around using enormous equipment, head end, tremendous repeaters, distribution. You couldn't call that putting on a TV set. That had to be a new performance just as if a new TV station had picked it up. Therefore they would be found to be within the Copyright Law, and once that was so our job would fall away. I thought there would be legislation and grandfather cable in small markets subject to the FCC rule. In other words, you weren't going to deprive the people in Riverton, Wyoming of service that they had been getting for years. But the new cable, as it developed in the major market, would be subject to the new copyright ruling and would be in the marketplace and we could relax because that meant that anything cable did was fair competition.
I had never been concerned, for example, about Pat Weaver's operation in California. I thought that was a perfectly fair operation. I thought it was a pity that he was unfairly strangled by movie interests and others. But what he was doing was developing movies, developing sports. Every product he got, he got in the market. I believe in that marketplace. The problem I had with cable was that it seemed to me to be totally unfair. They were using the Hollywood product. They stood outside the market and the whole thing was crazy. Just because somebody released a TV program, a movie in New York didn't mean they were releasing it in Lima, Ohio and with no compensation. And therefore, the key was popular and all I was doing was holding on.
The court cases proceeded and the copyright case went well in the district court. The programmers won. It went well in the Court of Appeals--the programmers won. It then went to the Supreme Court and along with it at the same time, Southwestern Cable arrived which was our jurisdiction to do the freeze. Our jurisdiction over cable television. The whole thing came apart in '68 unfortunately. That whole strategy because while we won Southwestern and we had jurisdiction to freeze cable, the programmers in an astonishing decision by Supreme Court, lost the copyright. It was held and it was a matter for Congress to bring cable within the copyright law. The cable was not a performer. I think that's one of the most stupid decisions that the Supreme Court has ever rendered.
PAGLIN: How then it come about in terms of the justices rendering the decisions, the evidence that was argued, and your expectation that it would come out otherwise?
GELLER: I think that the answer to the thing mostly that the Supreme Court legislates and they did not want the copyright industry to have control over cable and therefore they thought what a good way to do it. We'll tell Congress to do it and in the meantime we'll let cable continue to develop but we don't have to worry about it running awry because we've given the FCC the power to check it. So cable will be checked by the FCC, Congress will solve it all and we have struck a good balance here. FCC, you have authority to control its growth but copyright owners you can't stifle it. If we hold for you cable is dead. It was just a mistake on their part because the real solution was copyright and not FCC and they just mucked it up.
PAGLIN: What then do you think would have been the direction in which the industry would have developed had they made that decision?
GELLER: I think it would have developed pretty much the way it did in '76 but without distant signals. When Time Life came along and developed HBO that you then had following it USA Network and ESPN and Arts and all that. There would have been a development of cable from the mid '70s on but without any super station, without any WTBS, news from WGN and we would have all lived happily ever after.
That would have been sound government policy and because of the litigation, Niser did a very bad job of arguing the two--it antagonized the court. I don't know whether it would have come out differently if he hadn't. They kept asking him to talk about performance and he kept saying I'll get to that later. And one of them came in saying we really are genuinely concerned about performance and he insisted on sticking to his way of presenting the case and he simply never got around to arguing the performance point and he irritated them very much.
PAGLIN: And that cost him?
GELLER: Well, I don't know if it cost him, you never know. Maybe it would have come out the same way. I must say, he botched the argument. But whether it would have come out differently if he hadn't botched the argument, I don't know. He acted rather, I thought, arrogantly toward them, he wouldn't answer their questions in the order.
PAGLIN: You were there for the entire duration of the trial of the case?
GELLER: Oh sure. I argued Southwestern ahead of Fortnightly. Fortnightly followed Southwestern. And after that I sat and listened and died. It was just a pity. The registrar of copyrights very much wanted the case to come out the right way. I remember I had a similar reaction. He came out shaking to the core and said he could not believe what he had heard about the performance and all that.
PAGLIN: But it was evident by that time that this decision would have to be a fairly momentous one, given what had happened in the '60s had happened. What I'd like to hear you comment on now is what was the industry and public response to the apparent resolution of the dilemma. Could you see a change in terms of the temper of the broadcasters' responses? Could you see that the directions were changing at that point?
GELLER: Most broadcasters wanted to compromise the problem and the reason why is that broadcasters were always heavy investors in cable. They always owned about a third of the cable systems. Some broadcasters had stayed outside the cable end and they were the AMST type broadcasters. They were very vehement for resolution that was favorable to the broadcast side. My strategy, I told you, came to nothing. I don't know if I said it before, but it was one of the biggest mistakes I made and if I could go back, one of the things I would now do, it's all hindsight ... I never thought that the Supreme Court would do what it did in the Fortnightly case.
I thought I was being too clever by half letting the courts do my work for me. If I were doing it again in '65 and in '66, I would go back and simply propose a rule that paralleled 325. 325 says that a broadcast station cannot do retransmission of another broadcast signal without the express consent of that originating station. I would have held that cable is in effect the equivalent of a station retransmitting and that there ought to be parallel. And the requirement and therefore the only regulation I would adopt is go get the consent of the originating station.
The point is that the originating station would not give consent because of the fact that he had copyright clearance only for his area. So if you went to WGN and you said I would like to consent to carry your signal, WGN would not give consent and could not under the copyright law give that consent. And then I would have done the equivalent of what I wanted to happen in Fortnightly--an FCC rule. Whether I won it or not in court, I would have been fighting for what would be the solution I wanted. And I was aware of it.
Remember, if you go back and look at it, that solution had been proposed. NBC, in comments, kept proposing that this is the way out. And I looked at it and said sure it's a way out but why should I take the risk of throwing the dice to see if I win that. All I've got to do is freeze cable, its development in the major markets until copyright comes in and I win everything to a case that's already there called Fortnightly which I thought was a lead pipe synch to be won by the programmers.
PAGLIN: Tell me, how could you publicize your point of view in non‑legal channels given your position? Were you able to write in the press or speak to gatherings? So it was impossible to get out from behind the scene.
GELLER: I never did. The people I had discussions with, Sol Schildhause then was in the Commission, was a strong advocate of cable for the CATV Task Force. Sol would say, "What the hell are you doing Henry? Why are you picking up the chestnuts of the Fat Cat broadcasters?" And I would say to Sol, "I don't give a damn about the broadcasters." I believe in competition to the broadcasters. What I want is for cable to come within the programming market. It doesn't make sense for cable--you know Westinghouse, TelePrompTer, and all these people who own cable--to be outside the competitive TV programming market. And as soon as that's resolved, we'll let go.
I have no great interest in stopping cable. I believe in cable. I believe in the diversity of cable. I don't believe in what is, I consider to be an outrageous practice, of cable just being a pirate. And then as soon as we get over the piracy, let cable be cable. Let it do what it wants, free of all government regulations. There is no need to regulate it. It's in the market. It's another distribution force in the market. And it's operating fairly. It is not a pirate. And that's what was motivating me.
Now, I gave no speeches to that effect. I never went out and said that. You couldn't possibly do that. If you give a speech, just think what you are saying. When I was arguing Southwestern in the Supreme Court and the Court of Appeals, I was saying we're genuinely concerned about what happens to UHF television and the impact of cable on UHF and that's why we've frozen it. I didn't say we froze it so that we were waiting for the Fortnightly case.
PAGLIN: Can you tell me a little more about the Commission's predisposition in favor of supporting UHF to achieve diversity? What was really going on there? Were there powerful lobbyists?
GELLER: I must tell you, and I don't mean to cop out, I don't know what really did motivate them. I think that Bob Lee, a Commissioner, was genuinely motivated by the UHF to protect UHF. He was known as Mr. UHF. Some of the other Commissioners may have been motivated far more by AMST and AMST didn't really want to help UHF. What AMST really wanted was to keep out competition and cable bringing in distant signals is competition. Therefore, their goal was to stop this new competitor.
Whether a particular Commissioner was just using UHF as a stalking horse, I don't know. For that matter, some of them may have had the same view I did. I never had a frank discussion with them.
And my view is not that I was that concerned about UHF, although I thought it might have been a problem. I didn't know how the UHF thing came out. On one hand, if you're on cable you've got perfect carriage and you can compete a hell of a lot better against a VHF because in the cable home you're the equivalent of that. On the other hand, they are fractionating your audience more. I didn't know how it came out. I told you my motivation straight, was I wanted them within the competitive TV programming market. I was holding on for what I thought was a sure copyright victory for the program. Whether other people had different motives--some of them may have been in AMST's can--they didn't want the competition. They were inside of the Fat Cat's VHF. In that case, I don't honor them very much because I agree with Schildhause, why protect the Fat Cat VHF?
PAGLIN: As an insider, it strikes me that you must have had a kind of unique vantage point from which to observe what channels were open through to the Commissioners and how input was received by them. Who were the people in touch with them?
GELLER: To be honest with you I don't really know fully how they went about doing it. They certainly saw them. By that I mean AMST's Mendall. And they would bring around broadcasters who were friendly to Commissioners.
PAGLIN: And that's considered okay?
GELLER: Oh yes, it's okay. And they would proselytize the Commissioner about this is terrible you have to do that. They would certainly go to Hill allies. Pastori was an ally to broadcasters. I don't know that Pastori called before decision. They didn't call me and the Stafford people didn't call me.
PAGLIN: Were there lawyers on the Hill committee staffs? Must have been.
GELLER: Yes, that's Nicholas Apple. I have no idea whether they called. People were fighting very hard for the congressional committees. The broadcasters were fighting and had an ally in Pastori. The cable people had an ally in McClellan. The cable people had an ally in Orin Harris when he was there. There were just fights for the one. I was not involved in those fights and I did not get the phone calls. I assume the Commissioners got them and they were in various camps. Some of them, their position was fore ordained. Somebody like Bob Lee had to be for UHF. Where the other ones were I don't know--all over the place. There were different motivations. The motivation of VHF was to keep out the opposition.
PAGLIN: I've been reading that at the period the views of economists as opposed to attorneys and engineers began to be relevant, began to be listened to. Were there economist‑type professionals that you knew or spoke to that interaction with the Commission or the Hill committees as opposed to the attorney's congressional staff?
GELLER: Yes, but this was never a decision that went off on analysis. There's a book by Rowlo Park you ought to pick up and that is the role of analysis in cable television decision. And when you read it you'll find that it simply didn't play much of a role at all.
PAGLIN: You mean financial analysis?
GELLER: No, I mean economic impact analysis. The analysis you're talking about. What will it do? At the time of the first one, the cable industry hired an NYU economist. The broadcasting industry hired a brilliant MIT economist I believe named Franklin Fisher. I tell you the problem with economic studies, and it's been said by many, many people, are what assumptions you make. If you make assumptions and then do your analysis based on certain assumptions, it comes out that there's no impact at all in cable and broadcasting. If you put in different assumptions and run the equation there's enormous impact. And you end up discounting them. They're nothing but horrors.
The one thing you'd say about lawyers is they're out and out advocates. You hire them and they would do all they can to advocate the position. The economists pretended to be independent but if the cable industry hired them, they were for cable. If the broadcasters hired them, it was all broadcaster. If you read Parks book later on you'll find that analysis played no role. It did not enter into it at that time.
PAGLIN: Well tell me, did negotiation between the supposed adversaries play a role? That is, I have read, in some ways the FCC was attempting to get broadcasters and cable owners to negotiate with one another, but the CATV owners tended to resist not caring that compulsory licensing procedures could eventually be tougher on them. Why was that an impossibility for the sides since there were some economic interests in common to negotiate positions prior to '65 and '66?
GELLER: There were attempts to negotiate it out. A number of broadcasters did try to do it. It was difficult to do because the interest of the cable people at all times were to be able to carry distant signals and bring distant signals in. And as you heard, people like myself and all that, our interest was to make them stand in the marketplace. So far as I was concerned they insisted upon being able to carry distant signals in the major markets and I didn't want that. I didn't see any compromise that I could work out.
Later on there were compromise agreements. In '72 there was a consensus agreement. My own view was that it was impossible to compromise because there was one basic issue that separated us, and cable would not give up that issue. Cable still won't give up that issue. I think people are beginning to kick them again on it. The present chairman of the Commission says that you have no right to a compulsory license that doesn't make sense. They've been kicked and kicked and kicked. They won't give up that issue. Until they're willing to give that up I really don't see how we'll ever be able to resolve this mess. The cable industry is just totally in the wrong about that issue.
PAGLIN: I'm wondering whether now, given the hindsight that you have and the interesting things we've been talking about, can see the regulatory history of that period on the performance of the Commission and the industry has in some way broadly reflected the temper of the times, the economic concerns, the governmental and social issues. Is that too general a connection to look for?
GELLER: No. Let me say that if you're really looking at it from the outside most people say that it was protectionists. But the Commission simply stands condemned as wanting to protect the broadcasting industry against the cable industry and I must say that there may well be a fair indictment of it. You have to violate Morgan VUS and get into the thinking of the Commissioners about what motivated them. Were they motivated by the AMST position of simply trying to protect the broadcasting industry against the cable industry? And if that's what they were trying to do then they deserve all the criticism.
I can only tell you what my own motivation is and I was the architect of these policies. I believe that my motivation is completely defensible and I would do it again with the exception that I would do it now out in the open. I had no notion that we were going to lose that case. I'm just astonished and one of the biggest mistakes I ever made. If I go back I would take that Commission and move heaven and earth to get the retransmission sent through and just fought it out in the Supreme Court on retransmission.
My motivation was never to protect the broadcasting industry. My motivation was to have an industry that was operating in a sensible one of fair competition. And cable, and I see it today, cable is a thief. It is a pirate. It does not deserve the government intervening to get its product anymore than the government should intervene to get products for the UHF.
PAGLIN: Given that it doesn't take the creative risks in the program.
GELLER: Yes, and it's more than that. It's a big boy. It was always a big boy. It's a big company. Why on earth should the government intervene to get products for a multi ... this is a $10 billion industry now, and the government is still saying, "Oh no, no you have to get your product and we'll specify what you have to pay." Why doesn't the government do that for the disc industry or the VCR industry or the UHF industry or make it out to multi‑point distribution industry. You poor people, we have to intervene to get you products. It's dopey, the dumbest thing I ever heard. I just blew it in the '60s.
My wrap up though on it would be that I'm not sure the criticism isn't valid that the Commissioners, the Commission was motivated to protect broadcasters. I can only tell you that that was not my motivation. My motivation was to bring about what I considered fair competition and I thought I had a peachy‑keen scheme to do it, a sure‑fire and fallible one and that by God I couldn't miss. I was using a freeze to wait for a case that I was sure was going to be won and the way I wanted and then we would all live happily ever after at the seashore. And I just blew it. And once I blew it, I never could go back and do retransmission. I tried but my time had come and gone. I had control of that Commission to do it in the mid '60s and once I lost control of it I never could do it thereafter and it was gone.
PAGLIN: Thank you very much for your wrap up. It's been a most informative interview. I will be seeing you again on our next appointment.
GELLER: Very good.
End of Tape 3, Side A
PAGLIN: Good morning. This is David Paglin, the Oral Historian for the Golden Jubilee Commission on Telecommunications. I'm once again in the office of Mr. Henry Geller for our final interview in a series of oral histories with the pioneers of cable television.
I'd like to begin by asking you about the question of how the FCC handled a particular problem that was coming to the floor before 1972. That is the problem of federal versus local regulation of franchises as franchises began to multiply and of course local governments and city and citizens groups as well as broadcasters were demanding their share of fees. There were problems with utility companies and common carrier facilities so I'd like to know how you remember the franchising criteria being developed. What were some of the critical elements that you recall?
GELLER: If you take it in sequence, right after the Supreme Court's decision we needed to react. We were shocked. Our reaction was a notice of proposed rule making called retransmission consent. But what happened was that the commissioners, led by Rosel Hyde, spurred on at a conference in Belmont that involved Ken Jones, a professor of Colombia, tried to regroup. What were they to do? What came out gets back to what I told you was my big mistake before and that was just in effect paralleling the retransmission part of the Act. The Act says in 325 that no broadcast station can retransmit the signal of another without its express consent and that's what Jones recommended. We're back to ground one. The problem was that the industry had gotten much more powerful and while we could put it out as a notice of proposed rule making it just sat there as another way to freeze. The industry tried one experiment with it, I believe, but it really was full copyright.
The only way you could get consent of the originating station was if the originating station had the ability to give it. And only a Ted Turner and the TBS‑‑which did not exist at that time--only a Ted Turner can give consent because he's the only one who controls the Atlanta Flames, the Atlanta Hawks, the Atlanta Braves and who buys programming or develops programming a way that he can give consent throughout the nation. Most people when they get consent, get consent simply for their area. WGN, for example, could not give consent. The copyright owners sold it only for Chicago. Retransmission consent went out but it was too late. We really should have done it way back in the '60s, in the mid '60s. When we did it and put it out after the decision in '68‑‑we put it out in '69 as I recall‑‑it just sat there and was a way of freezing television.
At that point, Dean Birch comes on the scene in 1970 and when Birch comes on the scene he wants to get cable moving. He is a competition guy. He may also come out of conferences with the White House and others who weren't exactly in love with the networks. I don't disagree with what Birch wanted to do. He wanted to get cable moving. There's one other thing that happened then, and that is not only did I cease being General Counsel, but at that point the cable television task force became a bureau. They took it over. Sol Schildhause is now in charge, he has a whole group of people under him, Bill Johnson, Steve Effros, Rick Brown. He has person after person in there. And at that point, the cable television bureau, with Birch as backing, it's elevated now and it takes over and it wants to free cable.
PAGLIN: Did you feel they had power anything comparable to the older, more established bureaus like broadcasting common carrier or was it awhile before they acquired that?
GELLER: No, it wasn't that. They only had power in their area. It was a narrow area but they had Birch's backing so that in the cable television field they now were the top dog in the staff. I had been running it as General Counsel. Never mind there was a CATV Task Force. We ran roughshod over them. There was a new General Counsel, Dick Wiley, but it was being run now by Schildhause. Wiley was just a kibitzer. And as special assistant to Birch, I tried to play a role but I was no longer the dominant role at all.
PAGLIN: A kind of mediator role would you say?
GELLER: No, I would make my suggestions and push. I would win some, lose some. I lost a lot of them. One of them I lost, for example, from the very beginning, was that you should protect the copyright owner in the major markets. Birch just didn't want to do it and neither did Schildhause and the result was they didn't do it. There was no exclusivity built in, no syndicated exclusivity. I kept yelling that's a mistake. And eventually I won, but the only reason why I won wasn't my winning, it's that Pastori, in effect, called a halt to the whole thing saying I don't want you to put anything out until I give approval. They realized that they really had to deal. They went then to a consensus agreement. That consensus agreement was mediated by OTP and by Nino Scolia and Henry Goldberg.
PAGLIN: I was just going to ask you about OTP and what they had to do with it this time.
GELLER: They came in and in order to get cable moving, they realized they had to reach an agreement among the three industries. They went back and forth among the three industries keeping us informed. They showed us what they were doing. We had input into it. But the fact is they were the catalysts, the middle man. And what was worked out among the industries was an agreement. The agreement that was worked out changed what Birch had wanted to do, had hammered out with his commissioners unanimously. Nick Johnson objected and blew up. I wrote Birch's concurring opinion that hit out at Johnson. We went at it hot and heavy.
The changes were not earth shaking with one exception. There was a change in the definition of what is a local signal from 1‑2 percent. We don't have to go on to the nitty gritty, it would bore the hell out of everybody. But it's very complex. The main change that came in was that exclusivity was now recognized for the broadcaster. He could get complete exclusivity for syndicated and film programming markets 1 through 50 and in markets 51‑100 it was very complex again, you need to be a Philadelphia lawyer. But there was very limited one. Below 100 there was no syndicated exclusivity. But that was all hammered out in the agreement.
Part of the agreement also was that all parties would support copyright legislation and that the cable would come under copyright--that was in the agreement--and that if they could not reach an agreement on what were the proper figures to be paid they would use compulsory arbitration. The cable entered in agreement and signed it and then under pressure from the large cable owners reneged. Cable is just not very trustworthy and they reneged on it. Birch, I remember, was indignant when he heard about it.
You could not blame the guy who was then in charge. A guy named David Matthews. It was just that he didn't have control over the big member. Members didn't want to pay copyright. They'd sign anything. I don't want to make them more rotten than the broadcasters or the motion picture industry. They're all rotten. But I want you to know that I would never, never enter into an agreement ever with cable. And you can publish that. They don't keep their word. They sign and then they renege. In reneging they said it's not our fault. Senator McClellan insists. What a crock. Senator McClellan insists because the big cable owners went to him--people like Moral, whom your father knows, and others--said renege. McClellan didn't have a thought in his mind unless he was told by cable people who reneged. The cable industry reneged. They signed an agreement and then reneged. Their word isn't worth a damn.
PAGLIN: Was Senator McClellan's posture attitude at the time typical of what some have said was a strange absence of guidance from Congress and congressional committees given that this was a kind of transitional period where they could have made their force felt more strongly?
GELLER: But people were lined up. The broadcasters had gotten to AMST, have really gotten to Pastori. You have to understand that Pastori was mad at cable anyway. They gave their word to him and then undid him on some legislation by lobbying against him by a very close vote. That legislation went the other way if you remember. And cable just did not keep its word. It's famous for not keeping its word. So he was madder than hell at the cable industry. You don't want to shake hands with a Senator and then lie to him. It's a mistake. They made an enemy out of Pastori. They deserved his enmity. As I say, a very untrustworthy bunch of people. Then they did the same thing to Burch in effect.
I remember Burch just being furious and disgusted that they had signed and that. So what happened is that broadcasters owned Pastori, he was in their corner. The cable industry owned McClellan. They'd gone to a lot of trouble. They had given his son a job. They had at one point given McClellan stock, as reported in TV Digest. They owned McClellan. The messages that were coming were coming all right. Pastori was saying I'm going to take you apart unless you do some accommodation and McClellan was in there fighting for the cable industry.
PAGLIN: Did you feel the industry at that time had, I don't know if you'd call it a covert design, for the way they wanted to see their industry developing but something they weren't being explicit about that they saw being worked out in the next five to ten years?
GELLER: I think what they saw, and I myself have seen it and believe it in every industry, is that you can sign up for any amount of restrictions. The restrictions disappear. In other words, get a green light to do something. Get some benefit and then agree to all kinds of detriments because it doesn't matter. The detriment or restrictions wear away over time. In the case of the '72 Act, and remember Schildhause is the main guy ramrodding this through, he had help from the chairman's office, Chuck Lictenstein. I worked on it from the chairman's office, I was special assistant to the chairman. But it was essentially his work--his with Bill Johnson, Steve Effros, Rick Brown and all these people.
Schildhause had always been for the cable industry. But there were all kinds of restrictions that were put on there to get votes of H. Rex Lee, Nick Johnson. The restrictions would say that you've got to do public access. You've got to do leased access. This is where your franchising comes in. At all the franchising conditions came in. They had to hold a proceeding. They had to make sure that there was equitable construction throughout the area. They had to limit the tenure, the duration of it to no more than ten to fifteen years. There was a limit, this is for the cable industry, no more than 5 percent, 3 percent you could make a special showing, and could get up to 5 percent on the franchise fee. They had to be regulated as to rates and quality of service. All these restrictions came in. All of them came in. They had to originate programming.
It turned out that over the course of the years, with the exception of the 5 percent one, which the cable industry wants, all the other ones faded out. There was a restriction against leap‑frogging. You look at all of them. They're all gone except for the 5 percent franchise fee. Restrictions disappear. That's true everywhere. Look at the modified final judgment of Bell Operating Company. Anybody will tell you that several of those restrictions will disappear this year and by 1995 there will be no restrictions. I'm telling you that the one bit of wisdom is that restrictions go over time.
PAGLIN: Do you feel that in connection with what we know now has happened, the climate has caused some of the restrictions to disappear? That at this point the regulators, yourself included, people in Congress whose business it was to stay informed, were aware of some of the coming technological advances, namely GO stationary satellites that would, though not at that time being used for communications, would signal profound changes?
GELLER: No, no one was aware of it. No one mentioned it. More than anything else the cable industry was made by this satellite, by the domestic satellite and the open skies policy. RCA was up there with satellites. HBO Time deserves enormous credit. They went, tried it, it worked and that revolutionized the industry. They made leap‑frogging obviously something stupid.
Let me say one thing when you get done with all this ... the government policy, while it was a significant factor, was not really the critical factor in the development of cable in the major markets. The critical factor was technology and the satellite.
PAGLIN: Most historians would agree with you.
GELLER: It's clear, if you were putting it on a scale of 100, you'd put the satellite up there around 90, that high. You put all these government policy things we're talking about and the others, they go down around 10.
PAGLIN: And yet even though many cable technological advances so to say, appeared to come on the scene so quickly as to almost be accidental. It seems to me that policy makers, of the Commission at least, made an attempt to be fairly responsible in anticipating what directions the industry would move in in relation to UHF and to network broadcasting and so forth. They attempted to make policy in an anticipatory way.
GELLER: They did attempt, but the policy the majority of the commissioners felt in the 60's‑‑I don't know whether it was good faith or bad faith‑‑was that we have to protect UHF, that they're moving signals around, they're becoming drenched with distant signals and this is crazy. We'll have New York and Lima, Ohio or Dayton, Ohio rather than having local ones. I have never known whether that's true or not. I believe that it is possible that cable helps more than hurts UHF because it gives it parity with VHF, it fractionates its audience because there's so many choices. It also does wonders for its reception.
The main thing that I told you I was influenced by was not that but the need to bring cable within the competitive market, TV programming market. Dick Wiley deserves some credit for at least getting them to the table. As I understand, in the mid '70s Dick Wiley said to them, "You aren't going to get anything out of this commission until you agree to come within copyright. You have to barter." So they went out and they agreed but they had all the cards. Valenti didn't have any cards and so what they agreed to was this compulsory license with sweetheart figures. I think Valenti made a mistake agreeing to that. I think he can see that now because he keeps screaming. But he's stuck with it. At that point they are within copyright but they have a governmental blessing to steal because the compulsory license is there and it's fixed by the government.
At this point, as I say and just to run it all together so we finish copyright, at this point, under Wheeler, the cable industry becomes greedy. You don't really want to gain too much power, it's a mistake. It's that old thing about if you get your dream you'll regret it. They got their dream. They got a chairman, Farris, who was in their corner and Tom Wheeler goes in there and he gets what he wants. Farris, in an astonishing decision deregulation any number of distant signals. There is no syndicated exclusivity. They're in the catbird seat. To every action there is an equal and opposite reaction. The copyright royalty tribunal comes in and says we'll fix you because this is crazy. Everybody will be entrenched. You can move a hundred signals around at that rate‑‑it's so cheap. So they ratcheted it up to 3 3/4 percent. Wheeler and Farris thus did a disservice to the industry. They were much better off under the old system and that's where we're at today.
PAGLIN: Was the copyright and royalty tribunal a little late, as it appears to me, in getting into this?
GELLER: Well no, it was late but it got in after the Commission acted. They acted within a couple of years saying that'll be 3 3/4 percent but that took a lot of guts. I honor Tom Brennan for doing that. I meant him on the street once and shook his hand just saying, "You are a great American." What he did was right. Understand it is totally arbitrary. There is no more reason for 3 3/4 percent than for the square root of 3 3/4 percent. You abandon the marketplace so that the government doesn't know what the hell it's doing. What he did was stop the expansion of the distant signal. You'll carry a few of them‑‑WGN, WTBS, KTVU--but there are going to be very few because at 3 3/4 percent it's too expensive to carry. So that kind of halted the thing and undid the Commission's deregulation.
Brennan and the CRT undid the deregulation. We stand now with a cockamamie system that makes no sense that is hurting Turner and hurting the cable industry and is hurting the broadcasters and is hurting, in my opinion, everybody. It is just a dumb system. But cable won't recognize it, and stands there with their thumb up their assholes saying, "No, no, no you must let us steal this way." I think in a couple of years cable will give it up. They are so wrong on the compulsory license that they have no where to go. But the whole history of this has been a history of mistakes. My mistakes and not duplicating retransmission way back in '65, waiting for the Supreme Court to act correctly, ho, ho, ho. That was my mistake. Wheeler's mistake in saying oh boy, I can win the whole ball game, and life doesn't allow you to do that, so he's mucked it up‑‑Wheeler and Farris. And everybody's mucked it up.
PAGLIN: Well, in one regard at least, it appeared to me that the Commission was wary of the possibility of mistakes and that originally it intended, or at least it had hoped to play a major role in the development and regulation of the industry. But they were very uncertain about this tri‑level system of federal, state, and local regulation of a medium that is essentially still protected by the First Amendment and I'm wondering if we can look at that 1972 period once more. Did you have any particular concerns that you expressed at the time and discussed with others at the time about the problems inherent in that tri‑level regulatory system?
GELLER: As the Commission's lawyers, when we were General Counsel, realized that the Commission could license cable systems and take over the licensing because it would literally fit the definitions in 301 Section 2. It was a transmission of energy by radio because it was an apparatus designed to extend. If you look at the definition, the Commission could have licensed. There are thousands of them out there. How in the hell could we conduct their licensing. So we opted instead for this system of federal and state regulations on the ground that was the only thing that made sense. Furthermore, the city did have a real function. You did need to get to the city to get to use the streets. So you got the city, state, federal tri‑level on the one even though we could have taken over the regulation other than the use of the streets.
PAGLIN: Was there broad concurrence on that from the state and local authorities generally as you canvassed them or was there a lot of controversy about that?
GELLER: Well no, the state and local authorities wanted in. They wanted to be the franchise giver, they got money out of it. They regarded it as no different than any other franchise they had to give out. We knew we were dealing with some corrupt areas in the sense that when you get stuff out of the city, you hire the mayor's nephew and you do things like that. We were aware that the federal level while it had its problems was proceeded generally on a much higher, moral and ethical plain than did the cities. That's just a necessary way of getting over the hump, and that's kind of it.
PAGLIN: And what were some of the monitoring procedures in that, though setting of broad criteria and then monitoring them? How do those work themselves out?
GELLER: It really wasn't going to be monitored. It was impossible just as it was impossible to license in theory since it was our regulation that said you had to conduct a proceeding, you had to do ten to fifteen years, you had to do this and that. People could appeal to the Commission saying I wasn't getting what your rule said. In practice we didn't want to hear from anybody because we didn't want a big House of Lords for 5,000 cable operations. It's impossible. And I told you, it very soon wore out. It came in at '72 and they were gone by '78 as I recall. They were chipped away in '76 somewhat and by '78 they were all gone.
PAGLIN: Was there something you thought ought to be done at the time to at least maintain the elemental, important federal rules that you perhaps wondered about, that you perhaps anticipated might be eroded away?
GELLER: Not really. Remember talking about franchising‑‑it seemed to me that it was a local process and unless the feds wanted to take it over legally they had to let it go. That the one thing they couldn't do was be in it a little bit. I didn't see how you could do that. I thought there was a severe legal problem of being in it a little bit. You're really redrafting the Communications Act and in fact what the Commission was doing was writing the Cable Act of '84 in 1972 and there was some question whether it had the power to write the cable act of '84‑‑that type of act in '72. I don't know that they did have that power to do it. I thought they had the power, oddly enough, to take over the whole thing. But I didn't think they had the power to go around drafting acts where they meet it out, we'll give you this, we'll take that. There's not anything in the Act that will allow you to do that.
It allows you to say we are the licensing authority. We're going to do it but there's nothing that says we are the licensing authority and we're going to evolve a new act that gives the states this much power and we're going to review it. I didn't see where the Commission had the power to do that; legal power. So that I wasn't protesting in the 70's or anything. Those things did not come from me, they came from the Cable Bureau. I, all along was a little dubious about the Commission legally doing a mini Communications Act for cable on its own. Where did it get the power to do it. It was never really tested on that aspect, it just disappeared.
PAGLIN: You explained that very clearly. I'd like to, I think, probably wrap up that look at 1970‑72 just by asking you if you had any strong views or if you can recall any particularly colorful or illustrative controversies that rose over some of those requirements. I guess the five or six main ones would be: limited carriage, protection of explicitivity, origination rules, let's say mandatory local origination, and ownership and diversification.
GELLER: We had strong views. We lost a lot of them. I had strong views that the copyright owner ought to be protected with full copyright protection in effect in the top fifty markets because he gets 76 percent of his revenues where I argued for it. I lost but Pastori gave it back to me through the consensus agreement. I have very strong views that cable should not be allowed to control the content of all these channels and should be really limited to a certain number of channels and that's it. I lost that, Charles won that. I thought that cable should be able to control the content of only a very few, some percentage of channels, and the rest of them ought to be free and not under their control. It was another loss on my part. I thought that we ought to ban cross ownership in the same area of cable and newspaper just as there is a ban on cross ownership of cable and TV.
PAGLIN: Was that pretty prevalent at the time? Were you beginning to see a lot of that?
GELLER: Oh yeah, quite a bit of newspapers owned the cable system and I lost that. I lost a lot of things at that time. There were a lot of controversies going on, there really were quite a bit of them. The '72 rules were compromised. They were compromised in the best sense of that word. H. Rex Lee got his educational channel, his governmental channel. Nick Johnson got that plus access. He got into the access channels N + one, they always had to provide access. All these things disappeared, you understand.
PAGLIN: Johnson was also a strong advocate of a mandatory local origination as I've been reading.
GELLER: Yes, and that was independent that was knocked off also. There were compromises all over. Birch on the other hand wanted to let them go with lease restrictions, lease impositions and let them develop more in the marketplace. But he wanted the votes of H. Rex Lee, Johnson, and others so they agreed to it. In the one sense I think the cable industry is very shrewd. They didn't mind agreeing to things because they knew that they would disappear.
PAGLIN: Could I ask you, perhaps, to name a name or two as to who the leading entrepreneurs or spokesmen were in that period as opposed to the late '50s or mid '60s from the industry?
GELLER: I can't really tell you. You really ought to interview David Matthews who is around and is heading the one. The shots were never called by the head of the one. He was important but you've got to remember this is an association. In an association the shots are called by the large, in this case what's called MSO. And the large MSOs were TelePrompTer then, and I suppose Times Mirror was in there, Cox Broadcasting, Cox Cable was in there. There's a whole series of larger ... Westinghouse, you remember, was in cable. Morrell was in it for Midwest Video. I knew Morell because he made contacts with me and he was a very vigorous one and he was important to the industry because he was the link to McClellan. There were other links there and I really am not privy to who did what. Was it Irving Kahn for TelePrompTer, was it the guy who ran Westinghouse Cable, the guy who ran Cox Cable? Who were the most important industry figures? They didn't see me. They didn't come to see me.
And you ought to ask Matthews who was calling the shots. It's not Matthews who's calling the shots anymore than today Mooney can call the shots. You notice Mooney was talking a great deal about the First Amendment. There was a meeting recently where they said soft pedal this First Amendment stuff. We don't know that we're not doing ourselves in with it. Principle with a "ple" is never as important to the people as principal with a "pal" and that's what they look for. I don't know who is calling it. I really can't tell you.
PAGLIN: Well, can you tell me then how you'd respond to this view? We've been talking about the erratic nature of the relationship between regulation and the progress of the industry but at least one view that I've looked at supports the view that by creating the relevant concepts, the Commission actually helped launch and develop the industry and move it. That is, the Commission actually did some good for the industry because it created and refined the concepts around which policy was built and around which the industry had to structure itself.
GELLER: Well I suppose you could say yes but I would have a qualified yes. The Commission refined the concepts and pushed the concepts of public access. The funding for public access has never been there and Congress has allowed the 5 percent to be used for anything. So that you've got a concept of public access but it doesn't work very effectively without the money. And remember, 5 percent of a $10 billion dollar industry is $500 million that could be used for programming and it's not. There is no national access programming. Local access varies-‑ some is good, some is bad. The concept was pushed by the Commission. Leased access was pushed by the Commission and it never really arrived because the terms and conditions can be set by the cable industry and you have to go to court if you don't like them. So it's out there‑‑the concept, but never really used. And you can go on and on.
Yes, the industry has grown up that way but not really well. The one thing I would say finally, to you, is that when I got on the cable commission here in D.C. I went to the mayor and I said to the mayor, if you want public service you can't get it this way. All that you get are promises, promises. You'll select an applicant, won't recognize the applicant within a few years and none of the promises will be carried out. That's been the pattern all over, it will be the pattern here.
PAGLIN: Is that Mayor Barry, mayor of Washington, D.C.?
GELLER: Mayor Barry. And I said if you want it and I've got memos to this effect, I'll give you public service. If you don't want to auction this and take the money and use it for public service, create what is called an Economic Development Corporation. It's a city corporation. And when you create that corporation, they would then retain somebody like TelePrompTer, or anybody you want; Westinghouse, Rogers, to run the cable and they would get the money. They would have the telephone company develop them but they would through bond get the development. The company would run it in the leanest, meanest, toughest way. It would get profits. You would pay the company one-third of the profits and you would retain two-thirds. Then you could use those two-thirds for public service. If there are no profits, there's no public service. But then you shouldn't be doing it if there are no profits.
But this is the only way you will really get educational cable services and other services because you've now set up a structure that works for you. You've set up a structure that works against you. You've taken a business and said you want them to act in a nice, charitable fashion. Why should they do that? They're going to de-maximize their returns. He wouldn't do it, he'd pass it out the same way everybody did to local cronies and that's what happened. I regard what has happened in this industry on the local level as absolutely stultifying and silly for the most part. It's an example again of government regulation that is very poor because it is not well thought out and cannot possibly succeed. It's bound to erode. It's bound to keep on eroding.
PAGLIN: Well you've summed up really beautifully the way you have regarded what's happened and also magnificently for me in that you've served my purposes.