Interview Date: Thursday January 13, 2000
Interview Location: Rutherfordton, NC
Interviewer: Marlowe Froke
Collection: Hauser Collection
MARLOWE FROKE: Richard Loftus is one of the most widely known people in the cable television industry. Part of that is because he has been with the industry since the very, very early years. Another part of it is that he has covered almost aspect of the industry itself from the engineering and the technology side to operations to public policy to regulatory to legal to marketing, programming. You name it, and Dick, at some point or another, has been involved in that aspect of the cable industry. So he brings, then, to his perspectives on cable, a wealth of experience that has given him a reputation that is sought by people throughout the world.
We’re with Dick at his new venture which is West Point Farm, just outside of Rutherfordton, North Carolina. West Point Farm is in North Carolina, the beautiful western part of the state, not too far from Ashland. Dick has one of the most spectacularly beautiful resort areas that he is developing on his own, now that he has retired, at least partially from the cable industry.
Can you tell us just a little bit about how you got into West Point Farm, Dick?
LOFTUS: Well, I’m a city boy, city born and bred, so I always wanted to have land – a farm. I loved the western part of North Carolina. I loved the climate here. I loved the people. So when I settled here, I started looking. Serendipitously, I found this farm—90 acres, 1,800 feet on the Broad River – that goes from the river bottom all the way up to about 1,000 feet in elevation. The vegetation is farm. It’s an old farm, was a cotton farm. I’ve now got pasture areas sowed in corn and soybeans. There’s a lot of wood, pine – white pine, jack pine – and a lot of hardwoods – maple, hickory, some birch, oak of course. I’ve developed a facility here that is eclectic. I found two old cabins in Virginia. In what is almost like the ultimate recycling process, took them down, dismantled them, brought them down here to North Carolina and reconstructed them here on the site.
FROKE: So what you have is a very unique – well it is a unique …
LOFTUS: It’s a ‘uniquity.’”
FROKE: Yes. That does a bit for the history of the country as well as an opportunity to move away from one’s regular life routine and find something that is very, very relaxing and very, very enjoyable.
LOFTUS: It’s a real place to get away to—rustic, bucolic, peaceful, enjoyable. There’s recreation available. It’s just truly an enjoyable place.
FROKE: Dick is seated in a swing on the porch of one of two of the houses that he assembled. If you look carefully off to the background, you will notice the timbers that were brought from Virginia and were assembled, timber by timber, here in West Point Farm. One of the houses dates back to 1746, and another house dates back to 1858.
Dick, what we’re going to do is interrupt you now for just maybe five minutes and give you and Lori, your wife, an opportunity to give us a tour of West Point Farm.
LOFTUS: Great. I’d love to.
FROKE: Back now for the history of Richard W. Loftus, a project that is conducted by the National Cable Television Center and Museum through the generosity of Gustav M. Hauser, the Hauser Foundation.
Dick, you were born in Washington, D.C. Is that right?
LOFTUS: I was born in a taxi cab in Washington, D.C. at 18th and Pennsylvania Avenue on December 23, 7:00 in the morning, 1938 and my father was driving it.
FROKE: And you haven’t stopped since.
LOFTUS: I haven’t stopped since. The only thing I think that could have been different, I could have been born in a revolving door.
FROKE: What was the profession or occupation of your father?
LOFTUS: He was a cab driver.
FROKE: He was a cab driver in Washington?
LOFTUS: Yes. I was told that story by my mother when I was eleven years old. I had had an argument with my father and I said, “Why is he mad at me?” I used to have a lot of arguments with my father. She told me the story about being born in the cab. She said, “You know, Richard, I don’t think he’s ever forgiven either one of us for the mess we made.” So that’s where I learned the story. She tells me that she got to the hospital – Columbia Hospital – which she was heading to. It’s at 24th and Pennsylvania Avenue. My mother was a nurse, and she said, “Bring me a sterile towel and a wheelchair. This one’s here already.”
FROKE: Do you have any brothers or sisters?
LOFTUS: I have one older brother. He’s three years older than I am. He is an attorney, as I am. He practices law in Warrington, Virginia.
FROKE: Were your father and mother natives of the United States, born in the United States?
LOFTUS: My mother and father were born in the United States in the area around Scranton, Pennsylvania – my father in Scranton and my mother in a town called Old Forge which is right outside of Scranton. Both of their parents, however, were Irish immigrants.
FROKE: And they came in the early 1800’s?
LOFTUS: They came in the late 1800s. My parents were born here in the early 1900s – my father in 1905 and my mother in 1909. Their parents had emigrated here from Ireland in the 1890s.
FROKE: And that was during one of the food crises in Ireland?
LOFTUS: Yes, the European food crisis, a period of time when there was famine in Ireland. Originally they came to Canada, and then they came down from Canada separately. My mother was a Keough, and my father Loftus, of course. Both of their families migrated at the same time, but not on the same boat or not on the same train. My grandfather (my father’s father) went to work for the Lackawanna Railroad, and my mother’s father was a pharmacist in Old Forge, Pennsylvania.
FROKE: Religion has been a very significant part of your lie. Did that obviously begin with your mother and father, then?
LOFTUS: Yes. I was born Catholic, as they say. They were Irish Catholic, and I was raised Catholic, educated Catholic. I went to a Catholic grade school, Catholic high school, Catholic college, and Catholic law school. So I’ve had a very Catholic education. I have a very deep understanding of the Catholic faith and the Christian faith as a result of that.
FROKE: When I say that religion is a strong part of your life in the way that you conduct yourself, I believe that I’m being factual because it goes beyond a strong sense of ethics, which you have.
LOFTUS: Well, thank you. I think that we have an absolute moral responsibility to do what’s right and to seek out the opportunity to do what’s right and do it. I don’t think you can just sit back and not go and do things.
FROKE: You went to St. Bonaventure University in upstate New York. There would have been other Catholic universities, so to speak, that you could have gone to. Why did you choose St. Bonaventure?
LOFTUS: That’s a curious thing. I went to a wonderful high school called Gonzaga High School in Washington, D.C. It’s the best high school in the country. I say that, and I’m going to make an anecdote out of it. My oldest daughter, in her freshman year at Loyola College in New Orleans, when she was there they had a freshman orientation and started talking about where they went to high school. One boy spoke up and said, “I went to the best high school in the country.” And she said, “That’s what my father always says.” And the kids said, “Well, I don’t know where your father went, but I went to Gonzaga High School in Washington, D.C.” My daughter said, “That’s where he went!” That was a Jesuit school and tough, a tough regimen and a good school. Four years of Latin, two years of Greek, etc., and a lot of discipline and athletic competition. A guy who was in my class a lot of people know – Pat Buchanan. He was a classmate of mine. Another guy was a couple of years behind me was pretty well-known too – Ed Bennett, the author and former Education Secretary.
I went to work for a couple of years after high school. My family was poor, relatively, and I saved my money. I was looking around for a place where I would go to college because that’s what I aspired to do. A friend of mine touted me on St. Bonaventure. He said that it would be a very different experience and that I ought to go, look the place over, and think about it. So I did. I bought a train ticket and took the train to Olean, New York, and went to visit the college, and I fell in love with the place, the spirit that was there, the concept of education that was there and the sincerity of it. St. Bonaventure was one of those schools that you have to want to go to. You just don’t walk into it. You just don’t walk by it. It’s in a place that is a place that you have to go to. I felt called there. I felt like I really would go there and could really devote myself to getting a good education at a place that had a lot of good spirit and had a fine academic reputation and a fine athletic reputation. It had a very good basketball school, at the time. The weather was not too congenial with harsh winters in the snow belt of Western New York State. But from the moment that I got off the train in Olean, I remember going out Route 17 and seeing the school come up, and I said, “This is the place for me to go to college” and I never regretted it. It was a great school.
FROKE: You majored in literature.
LOFTUS: Majored in English literature, minored in philosophy and history with math and some physics.
FROKE: What do you regard as the most significant parts of your education from St. Bonaventure?
LOFTUS: There was a constant sense of learning, a constant sense of turning the page. You move on. You move from step to step to step. If it’s literature, English literature, you start with “Beowulf” and you go all the way to that book that was published yesterday. Words, thoughts, impressions in a relatively tight environment, not a big campus, not a lot of students. There were students from all walks, from other countries and things like that. But there was always this sense that this is a place where you can learn. Really, the process of learning is teaching yourself. We had professors or other teachers who lead you, but they lead you to learn. So the place really impressed me with that, and I pursued learning.
FROKE: So it was an education that deliberately related the past to the present and also, then, gave you a sense of independence.
LOFTUS: You said it better than I did, yes.
FROKE: I didn’t say it as well as you did, but I summarized with a few pragmatic words.
LOFTUS: I have a certain reputation for verbosity.
FROKE: From St. Bonaventure—and I’ll just mention this in passing and then we’ll go into it in more detail at a later time—you had your first encounter with cable in Olean.
LOFTUS: I had to work.
FROKE: So those two years that you worked before you went to St. Bonaventure were not adequate to cover you financially.
LOFTUS: No. No. I worked my way through high school. But no, I worked. I needed to work, and I did work. One of the jobs I had was tending bar in a little hotel, the Burton Hotel, in Allegheny, New York, which was not much of a hotel but it was a hell of a bar.
FROKE: And I should say that he makes the best Manhattans, and I consume them.
LOFTUS: Once you’re taught how to concoct, you concoct. So I was working in this bar. Most of it was a shot and beer type of bar, a college bar mostly. It was a March day. As is not unusual in that part of the world, a snowstorm came up - a snow squall – in March. All of a sudden, into the bar come walking these guys. They’ve got all this rig on them, and they’re clinking and clanking and clinking and clanking and clinking and clanking. They came in and were cussing because they couldn’t work in the snowstorm. They sat down and commenced to drink a few beers and order hamburgers and stuff like that. I started talking with them and jawing with them. What they were doing is they were expanding the cable television system from Olean into Allegheny, New York, and upgrading it from five channels to seven channels.
FROKE: Did you have any awareness of cable at that time before they came into the bar?
LOFTUS: Other than the fact that I’d heard about it, but I had never seen it. I had never seen a cable television picture. This was 1960. Television was big, but it wasn’t as ubiquitous as it is today, and I was raised in the age of radio and I never spent much time watching television.
FROKE: So it was your natural curiosity with these two people that came into the bar, to learn more about cable and what their business was.
LOFTUS: Well, not only that, but Ray Muldy, who owned the bar, was paying me $.80 an hour. They told me I could earn $1.80 working with them on the poles. Well, no contest! I took off the apron and said “I’ll see you around, Muldy.” What they were doing was when you build a cable system, you’re on the utility company poles. There’s a thing called “framing the poles,” making them ready. The cable was put on the poles by an attachment that’s a hook. Then there’s a piece of strand, a metal strand, that’s put into that hook, and then the cable is latched onto that piece of strand, that piece of metal. That’s how it hangs out there. So my job was to climb the pole and drill the hole and put the bolt in while the other guys were following behind me to put up the strand. I didn’t get paid the $1.80 an hour. I got paid per pole.
LOFTUS: So I thought that was a little bit of a thing. But I wound up climbing an awfully lot of poles very fast. I learned something the very first day. A guy named Greg Tobin, from Hazleton, Pennsylvania, took me out and taught me how to climb a pole with a belt in cold, icy weather. You don’t climb the dry side of the pole. You put your belt up against the dry side of the pole and you kick off the ice with your hooks because that belt is what’s going to save your life and keep you up there and keep you holding you straight. If you go around and you put it on the icy side of the pole, you’ll lose your thing.
FROKE: You’re going to slide down.
LOFTUS: There’s an awfully lot of guys with an awful lot of scars who climbed the wrong side of the pole. That was the first lesson that Greg Tobin taught me was not only how to climb, but how to climb safely.
FROKE: And how to make the installation safely.
LOFTUS: And again, this was a hand bit that you drilled in with. You didn’t have a nice, easy battery operated drill. The power that was up there when you would work on poles that had cable on them, was AC. There were tubes and these huge amplifiers, and it was a totally different experience. Here I was – I came from Washington, D.C. where I would go back to Washington where we had the rabbit ears with the aluminum foil hanging off from them. We’d get two or three or four channels of ghosts in the apartment house we lived in in Washington. And there are these people in Allegheny, New York – they’re getting seven channels of television: New York City, Pittsburgh, Buffalo, color, and …
FROKE: And it was clear.
LOFTUS: It’s a beautiful television picture. I’m sitting there saying, “Something’s going to happen.” This cable TV system in 1960 was owned by a man by the name of Bill Daniels, was run by a guy, managed by a guy by the name of Alan Harmon. Bill Daniels is, of course, known as the “father of cable,” is one of my great heroes. I love him dearly and he is a wonderful human being. He didn’t even know it, but he got me started and introduced me to cable TV. I earned a good living. I then started traveling around and doing installations for other cable TV people in other places around upstate New York, and drops and things like that. I kept a good interest in the business.
FROKE: Did you ever convert the unit-cost pole to an hourly wage? Did it turn out to be about $1.80 an hour?
LOFTUS: It turned out to be about $4.20 an hour because I climbed fast!! I’ll tell you, I was one upset boy the day that I ran out of poles. I’m out there saying, “I’ve never made so much money in my life. Look at this stuff.” And they’re paying me for poles, and I’m up the poles. They’re happy. They don’t have to climb. They didn’t like to climb. Get this scrawny little college kid climb up the pole for us. No, I was making money. Then all of a sudden, okay, yeah, I show up. I got the belt on and the hooks and they go, “That’s it.”
FROKE: In your first encounter then with the cable industry, you demonstrated entrepreneurship which is one of the characteristics that the cable folks talk about as being a part of their industry, a part of their unique business relationship to the country.
LOFTUS: I also had a great experience at the same time. A cable TV engineer by the name of Fred Coryell came to St. Bonaventure. He came to a physics class, and he held in his hand a little thing, and he said, “This is going to change mankind more than moveable type.” The philosopher in me said, “Come on now. Are you Mr. Guttenberg or something?” He was holding a transistor.
FROKE: Okay, okay, okay.
LOFTUS: He went on to explain the nature of solid state technology and what that could do and how it could do it. To a 19 year-old young man at the time, the quantum physics nature of that just blew me away. It was hard enough understanding radio frequency and the transmission of electronic, magnetic spectrum and the power factors of amplifiers and how you could take electricity and modify electricity and modulate and create pictures and sound and send it somewhere. You could broadcast it. And then also you could take it and you could put it onto a cable and a wire and you could transport it. Today it’s so de rigeur.
FROKE: You left that presentation believing him, then?
LOFTUS: I left that presentation overwhelmed. I said, “This is really an extraordinarily exciting thing.” The man was right. He was talking about the fact that, for example, the cable TV amplifier itself used, in 1960 dollars, per amplifier, about $7 a month in electric costs. He said that cost could be reduced to $.07 just by deploying solid state technology as opposed to the powered amplification process. And it has! Look at this TV camera that we’re looking at here. It’s not even the size of a half a cigar box. It has been within that last 40 -year period of time that this extraordinary explosion in technology has taken place since the invention of that transistor.
FROKE: In the early 1960s then, he was foreseeing digital communications.
LOFTUS: I don’t know if he had digital, but he certainly … Solid state came from digital. He certainly saw solid state analog.
FROKE: But whether he went farther …
LOFTUS: You were still in the days of the UNIVAC computer and everything else. I think there were still tubes. The real world that you were living in was high-powered electricity. It was exciter tubes and things like that.
FROKE: With the enthusiasm that you generated then from that presentation and then also from your economic status where you did not have money, how did you take your next step, which was a law degree, in your education? How did you put that together?
LOFTUS: I graduated from St. Bonaventure.
FROKE: How did you put it together now to go on to law?
LOFTUS: I always wanted to be a lawyer.
FROKE: Okay, okay.
LOFTUS: I’ll tell you the reason. I had an uncle, my Uncle Mike Keogh, who was a lawyer. He had a Cadillac car. He had a nice house on Garfield Street. He had a cottage in Rehoboth, Delaware. His daughters were debutantes. He had parties. My brother and I, with my mother and father, grew up in a little two-room apartment in northwest Washington. So I had an economic incentive.
FROKE: You were introduced to class structures very early.
LOFTUS: I was introduced to that, and he was like a W. C. Fields type of uncle, you know. “I love you as much as any man can love a nephew.” He gave me occasional encouragement, but he said, “I’m teaching you, Richard. I’m teaching you by example.” He was the first man who ever really confronted me with that and said to me directly. It’s like the idea that if you give a person a fish, he’ll eat the fish, but if you teach him how to bait the hook, he’ll be able to feed himself all his life. And he said that to me. He said, “You know, I can give you money. But that’s not going to help you.” You’ve got to accept the fact that he was born as an immigrant and he made it. “It’s out there for you to make it. It’s the United States of America, the world is yours. Go out there and get after it. It’s the greatest country in the world. It’s free. You can do it. You’ve got a good mind. You’ve got a good body. You’ve got your health. Go get it.” And he encouraged me to do that. And he said, “By the way, what I’ve got, I’m keeping.” I’m making him out to be a lot worse than he was, but he did encourage me that way. He did not indulge in largesse, but a lot of encouragement and positive reinforcement – to ‘yeah, go get it, kid.’
So I did what he did. I went to Georgetown Law School at night, which is what he did. I worked. I sold printing equipment and supplies and machinery. Then I went and took a job in the court system. I was a bailiff in the Court of General Sessions. I clerked to judges. Then I got a position in the United States Attorney’s office. David Acheson, Dean Acheson’s son, was my D.A. When I was at St. Bonaventure, I had worked on John F. Kennedy’s primary campaign. So when Bobby Kennedy became Attorney General, I was able to parlay a certain amount of those connections into an appointment as special assistant to the United States Attorney for the District of Columbia. I served in that capacity for a little bit more than a year. When the president was shot, when President Kennedy was shot, David Acheson was my D.A., and I was his special assistant. He left to go to Secret Service – to the Treasury Department – to reorganize Secret Service. I could have gone with him and been a T-man, but I had had a run-in with the new D.A. who came in, and he invited me to leave. Curiously enough, at that same point in time, I had written an article for the law journal, called “Cable and Copyright – the Coming Crisis.” If you would take that article today and change portions of it, you could make it “Cable and Copyright – the Continuing Crisis.” The issue had been joined, at that point in time, and cable had come into the purview, if you will, of the legal community because of the controversy over copyright. So I had that published. I took it to the National Cable Television Association that was on the 5th floor of 15th and H Street in the National Press Headquarters Building. A man by the name of Bob LaRue was general counsel. A man named Edward Whitney was president.
FROKE: He was the first president.
LOFTUS: He was the first paid president.
FROKE: All right.
LOFTUS: Bill Daniels recruited him from Western Airlines in Denver. Marty Malarkey, I think, was the first president, but he was not paid. He was pro bono. Ed Whitney was the first paid president of the NCTA. They had a mimeograph machine, which is a printing process, in the hallway. A girl by the name of Beverly Murphy was the secretary. So that was the NCTA . The National Cable Television Association was Ed Whitney, Bob LaRue, and Beverly Murphy. I walked in and had this article, “Cable and Copyright – the Coming Crisis” and they put out a bulletin on a monthly basis or weekly basis or whatever. I wanted to get it published. Bob LaRue read it and immediately co-authored it by making changes. Then he assigned it to Beverly Murphy and told her to type it up and put it out. She said, “I can’t do that because the mimeograph machine is broken.”
One of the jobs I had between high school and college was a printer. So I said, “I can take a multilith machine apart in my sleep. It’s like an M-1 rifle. I’ll fix it.” So I went out in the hall, and I took the mimeograph machine apart, …
FROKE: Got all purple ink over you.
LOFTUS: Ink all over me and everything else, but I fixed it. Then Beverly Murphy typed up the article. I stood there with her, ka-ching, ka-ching. It was a hand crank machine. Through that curious beginning and then through my brother who had met a man named Robert McGehan. In law school we had an investment group. We were night school guys. There were guys in the patent office, guys who were accountants, all college graduates. We were all in night school. We all put a couple of bucks together and we had an investment club. I told these guys, “One of the things we ought to look into is this cable TV thing because it’s…” So one of my study group guys, Jimmy Proctor, was an accountant. He was working for Cooper Brothers, Lybrand, Lawson, Montgomery. He said that they were auditing the books of a company called Entron, that there was an investment looking to be made into the company by the Boston Herald Traveler Company.
FROKE: It was one of the early manufacturing …
LOFTUS: It was the company that I had climbed the poles for in …
FROKE: Okay, okay.
LOFTUS: … in Olean/Allegheny, New York.
FROKE: All right.
LOFTUS: They were up there putting in this cable system, and they had the general contractor. Then there was a subcontractor, but it was Entron equipment that I had worked with. I had changed tubes in it and done all sorts of stuff, hauled it up. So I said, “I know that company – Entron. They had the equipment up in Allegheny, New York.” So long story short, we invested about $200 which was a lot of money to us at that time. It was probably about half of our entire investment club funds – Delta Theta Phi – legal fraternity. So we invested. I convinced them. I said, “This is good income.” So we did which, Entron, when we bought it was 1 7/8 - $1.78 per share. Of course one of the guys was a broker…so we bought the stock. Well, the deal with Boston Herald Traveler went through, next thing you know, the stock’s up to $8.00 a share. Everybody said, “Let’s sell this stuff!” I said, “I don’t want to sell out my piece of it.” They said, “Okay.” I got ten shares and they sold off most of the other stuff and had a beer party.
My brother invites me to go over to this guy’s house one day. I go over to this man’s house and the new D.A. has invited me to leave – “Please leave. I want you to go.” And I went over to Mr. McGehan’s house. We get talking, and Mr. McGehan asked me what I’m doing. I said, “I’m special assistant to the U.S. Attorney, District of Columbia.” I said, “What do you do?” He says, “Well, I run an electronics company.” I said, “Oh, what kind of electronics?” He says, “Well, you’ve probably never heard of it. It’s something people don’t have around Washington here – it’s called cable TV.” I said, “I heard of cable television. I know what cable TV is.” He says, “You do?” I said, “Yes. What’s the name of your company?” He says, “Entron.” I said, “Entron? Not only do I know your company, number one, I used to work for you – in a manner of speaking – through one of your subcontractors climbing poles up in Allegheny, New York putting in your LHR 1 amplifiers.” He looked at me. I said, “Not only that, if you go back and check the books, the records of your company, I’m one of your shareholders. So what are you going to do for me today?” That was about 4:00-4:30 p.m. Sunday afternoon. 11:00 that night, in the Entron plant in Silver Spring, Maryland, I became assistant to the president of Entron.
FROKE: Was this after you had earned your law degree? Very close?
LOFTUS: I had earned my law degree. I had the privilege of arguing cases because of my position in the U.S. Attorney’s office, but I had not passed the bar. I passed the bar a few months later.
FROKE: In Maryland.
LOFTUS: In Maryland.
FROKE: Getting back to Entron at a later point in our conversation, did you practice general law?
LOFTUS: One of the first things …
FROKE: In the Attorney General’s office it was criminal law.
LOFTUS: I prosecuted. I put people in jail, including Gus Hall of the Communist Party. I generally associated with cases … but also did civil. I did a lot of civil pleadings. But most of my efforts were criminal.
FROKE: And then even though you did get licensed in Maryland, you really did not practice law in a general sense? Your cable career was moving ahead so fast that—
LOFTUS: Other than the fact that, well as …
FROKE: You applied it.
LOFTUS: I applied it every day. It’s interesting that law is really … The study of law is a study in the procedure and analysis. It’s amazing it produces so few analytical thinkers. It really is a study in analysis, and it was taught to me that way. Georgetown was a case study program law school. You studied by case. You were taught by case. The question was always asked, “How would you do it differently?” And you were graded in a competitive way. We started in my freshman class at Georgetown Law School with 400. We graduated 92. Look to your right, look to your left, look to the guy in front of you, look to the guy in back of you – because only one of you is going to make it. Only one of you is going to graduate. You had competitive grading and you had to argue against each other in class. When you get guys who are really up on it, and you’ve got a contest with them…but it was a good experience and something I used from the first day I walked into Entron. Here was Bobby Readen who was in charge of construction. Bobby Readen from Bilton, Alabama, who was a boot-kicking engineer, a technical guy, in charge of construction. He knew how to construct a cable system. There was a guy named John Leonard who was the lay-out guy, laid out the system and mapped out the system. They were writing a contract to build a cable TV system in Huntsville, Alabama. I said, “What are you guys doing?” They said, “We have to write out this here contract to get job down in Huntsville.” I said, “Give me that!” I go up to McGehan and said, “Do you know what these guys are doing?” He said, “Yeah, why do you think I hired you?” And I did everything. McGehan had me do everything. I ran the production line. A guy came up to him and asked him—he needed a raise because his wife wanted to move into a bigger house. McGehan said, “What do you mean? I just gave you a raise. I can’t give you any more raise.” This guy ran the production line. The guy said, “If you don’t give me a raise I’m going to quit.” McGehan says, “You can’t quit.” I was there, sitting in his office. The guy says, “What do you mean, I can’t quit? Are you going to give me the raise?” He says, “No, I’m not going to give you the raise, but you can’t quit because I just fired you. Get out of my office.” And the guy did. And McGehan looked at me and says, “Don’t ever let anybody intimidate you. Don’t ever do that. It’s not his company. It’s not my company. It belongs to the shareholders. You can’t make demands upon me. I don’t make improper demands on him.”
I looked at McGehan and I said, “What are you going to do now?” He says, “What do you mean, what am I going to do now?” I said, “You just fired him. We’ve got production going on.” McGehan says, “Yeah, go take care of it.” So I went down, and until he hired another production manager, I’m down there with the guys on the line and the women on the line with the soldering guns and everything else and looking for schedules…
FROKE: I’m going to get back to that in the questioning in a little while. Right now, I’d like to go back to the personal side of your life again. At what point were you married in your career?
LOFTUS: I married a college sweetheart.
FROKE: From St. Bonaventure?
LOFTUS: From St. Bonaventure. We met at St. Bonaventure.
FROKE: And this was Sylvia.
LOFTUS: Her name was Sylvia, Sylvia Mariani. We married while I was still in law school in 1964.
FROKE: And you had three children.
LOFTUS: Three children. We were married for 26 years. We had three children, our daughter Marie, my son Jerome Peter, and my daughter Genevieve.
FROKE: And what is Marie doing now?
LOFTUS: Marie is a teacher in a magnet school in New York City teaching English literature. She got her undergraduate degree from University of Massachusetts and her graduate degree from Boston University. She’s a doctoral candidate as well at Columbia.
FROKE: And Peter?
LOFTUS: Peter is working in the entertainment business. He is currently producing a record with Christine Andreas who most recently was the star of the musical “The Scarlet Pimpernel.” Christine is a wonderful person. She was the female lead. She was originally started out in Broadway. She replaced Julie Andrews in “Pygmalion”—[“My Fair Lady.”] Then she married and had a child and took care of the child who unfortunately is autistic. So she took off eight years to help raise this boy and get him old enough. Then she went back to Broadway shows and was in “The Scarlet Pimpernel”. She’s done one album, and she is now doing another one with my son, Peter producing it.
FROKE: You have a great deal of pride in Peter’s musical abilities.
LOFTUS: I’m not a musician. I don’t have any musical competence whatsoever. I can’t hold a note, I can’t read music. I love music. I love music! Peter is a natural, and he’s also a very good entertainer. He’s a juggler and a good wit. He’ll do stand-up comedy. He now has a role playing the piano in a movie with Robert DeNiro. So he’s still aspiring to …
FROKE: … break into the entertainment.
LOFTUS: … break into that entertainment business where you have to get the break. But he’s been at it resolutely since he was at the University of North Carolina in Asheville. He’s studying under Bob Moog who invented the synthesizer. He’s very adept in the keyboard.
FROKE: And Genevieve?
LOFTUS: Genevieve is here. She’s living here in Lake Lure, North Carolina. She and her husband, Mark, are working in various enterprises that I’m involved in too, as well as running West Point Farms. Also I have an interest in a fish business in Washington, D.C. and they’re in charge of the Internet side of that business which you can do from anywhere. So they’re doing that and living here and we’re very, very happy that they’re here in our community.
FROKE: When Genevieve was married, West Point Farm was the site of the wedding.
LOFTUS: Genevieve was the inaugural event. We first turned on the lights and everything worked. We had 150 people here, she was married in the grotto and her reception took place in the pavilion. She spent her first night here with Mark in the cabin. We had a grand old time. It was a great party. Also I’d go on to say that I divorced my … Sylvia and I are divorced and then I remarried my current wife, name is Laurie. I’m very lucky to have her in my life.
FROKE: And Laurie, then, is very much a part of the West Point Farm also.
LOFTUS: Oh yes. She’s the Girl Friday. She does … You name it, she’ll do it. It’s her garden.
FROKE: She has a strong interest in equestrian.
(Rain and wind interferes with some of the dialogue from this point forward)
LOFTUS: Yes. She’s a good rider. Genevieve was – I brought her down to the grotto on her horse. Her horse is named Miracle. Laurie’s horse is named Silko. Miracle is a great story as a horse, why she’s named Miracle. She was born stillbirth. The veterinarian and the man who owned her—she was a colt. She had come out, and her mother died in giving birth to the colt. The colt was stillborn. This veterinarian and the owner grabbed a hold of the legs and slammed the horse against the side of the barn to start its activity. They did that. Then the horse got up. Of course, the first thing a horse does is stand. So the horse stood. They had removed its mother. So this man who owned the horse walked outside and sat down on a well, on the side of the well, and the horse came walking over to him and started licking him and tried to sit down next to him, actually tried to sit down! The veterinarian said, “This is bad. This little horse is trying to act like a human. He thinks you are its mother or something.” So they went in to Rutherford to Walmart and they bought jars of Vaseline. They rubbed the horse all down with the Vaseline. Then they had a mare who had had a foal that died. They took the mare and they took this colt, all rubbed down with Vaseline, to the mare whose foal had died, and put it with her. She started licking it and adopted this horse and they named it Miracle. She’s a wonderful horse.
FROKE: That’s an amazing animal story.
LOFTUS: True story, true story, and a great one.
FROKE: In addition to West Point Farm that you’re developing as an enterprise for the recreation and resort field, you mentioned the fish, as you characterized it, business in Washington. The name of the company is Ocean Pro. We have talked earlier about what the rationale for the founding of that company was. Could you talk just a little bit about that?
LOFTUS: There was no real rationale. I had a small interest in a restaurant. A young man who worked for me in the cable TV business by the name Gregory Kasten, started working for me when he was 13 years old. He was running this restaurant. He had graduated from college, went to Bentley College in Massachusetts, graduated from college, went to Washington, D.C., went to work in this restaurant of which his uncle is the principal owner. I was a small limited partner. He couldn’t get good fish, couldn’t get consistently good quality fish, and it’s a seafood restaurant. It’s called Tony & Joe’s. It’s on the waterfront in Washington. It’s a great restaurant. If you’re ever in Washington, go to Tony & Joe’s. So he came to me and he says, “We can’t get good fish. Washington, D.C. doesn’t have a good company that puts out good quality fish. I want to start cutting our own fish. I want to start a fish company.” So I said, “Fish. You want to be a fishmonger?” But long story short, I said, “Okay.” So I lent him $10,000. The company is now doing about $22 million a year gross volume in fish in restaurants in Washington, D.C…Baltimore, Richmond, Annapolis, greater Washington, D.C. metropolitan area. If you get a piece of fish at the White House, you got it from us. It’s a very high quality cutting house.
FROKE: And what it was was an emphasis on customer service, emphasizing fresh fish.
LOFTUS: We were the first, and still are, the only company …
FROKE: … that guarantees freshness.
LOFTUS: Not only do we guarantee it, but 24 hours a day, 7 days a week, we’ll deliver a fish. What happens in the restaurant business is that you can get these … all of a sudden here all these people show up. They all started ordering from the seafood restaurant. If it’s a Sunday and a crowd just shows up and you start to run out of salmon, you don’t want to have people say, “I’ll have the salmon” and you have to say, “Sorry, we’re out of it.” You call Pro Fish, Ocean Pro, and we’ll deliver it to you. We’re always available. We’re not the cheapest to the restaurant owner, but we’re consistent, high quality, dependable. We’re now expanding the business going off on the internet, and we’re selling prepared foods, smoked. We have a line of fish. We have jerky - we have fish jerky. We have trout burgers. We have shrimp burgers and tuna burgers and salmon burgers and crab cakes.
FROKE: I would imagine, as you go on to Internet with your marketing, some of the international experience that you’ve picked up in cable is playing a part in your role in the fish business as well.
LOFTUS: It’s not a hobby.
FROKE: You’re serious about it.
LOFTUS: I’m serious about it. I’m an investor. I’m a director of the company. I’m a shareholder. I’m not the principal shareholder.
FROKE: And you’re serious about it in a broader way, too, which is environmental.
LOFTUS: Right. I think that fish, as a source of food, is the last source of food that human beings have depended upon the hunt to obtain. We’ve hunted it out. The hunting grounds for fish are depleted. Georgia’s bank is depleted. There’s no fish there. There’s no cod. There’s no haddock. It’s not there. And it’s not just that we’ve polluted things – and we’ve done that. But we’ve fished it out. The technology came to the point where these huge boats with huge netting capacities and the electronic technology to spot one single fish 600’ down and go get it. So the fish didn’t have a chance. We plundered and squandered our fishing resources. Alaska and Georgia’s Bank, the Atlantic coast, the New Bedford fishing fleet is now fishing off of Florida because there’s no fish off the shores of New Bedford, and there’s plenty of boats for sale in places like Gloucester and what have you. People who used to make their money from the sea cannot make their money from the sea anymore because the sea has been plundered. So what is now happening is the technology is evolving and fish are starting to be farmed – not starting – it’s being farmed. For example, probably about 80% of all salmon consumed today is farmed, either in Norway or Scotland or Ireland or Canada or Chile where the environmental characteristics of the area support that type of activity. They’re difficult to farm. Salmon are born in fresh water. They swim upstream. They’re born in fresh water and then they grow in salt water. Trout are born in salt water and then grow in fresh water – that’s sea trout. Mountain trout which are raised here, there’s only a handful of places in the United States of America where you can raise trout.
FROKE: It’s significant.
LOFTUS: Significant – and cost effective –I mean you can raise them in a bathtub. In a cost effective way, you need a lot of water. The water cannot be below 52 degrees. It cannot be above 72 degrees. It has to be constantly running, and you have to feed them, control them, contain them, and all the rest of that. Also, every single trout, rainbow trout, you go to a grocery store, a restaurant and you order trout, trout on the menu – it has to be farm raised because all the laws in the states now prohibit restaurants or retail stores, grocery stores, from selling wild caught fish. So fish has to be farm raised. That trout, when it’s about 6” long has to be inoculated with an antibiotic because otherwise the attrition factor for a disease that affects them can wipe out the entire colony. So when you eat a piece of trout, fresh water trout, you’re eating a fish that has been vaccinated. It has received an antibiotic. I’m learning all these things about this part of the chain. We have our own sources of supply down in Chile for salmon. I’ve found that the salmon are being fed by certain salmon farmers a diet which is high in protein but it’s vegetable. It’s soy, soybeans. And the fish love it. And they chomp it right down and they get all fat and beautiful. The problem is that you may get three oils in the fish which is the healthy part of the fish are going like that. That’s because their diet, which is supposed to be sardines and smelts and other marine product that they used to eat, has been doctored and they’re being fed vegetable protein. So they’re high in protein, but the real benefit of fish, the Omega-3…
FROKE: …fight cholesterol.
LOFTUS: …fight cholesterol, they fight heart attack, etc. etc., all those things – the brain food side is going like this. Not our fish. Our fish are fed marine based feed so it’s a natural process for them. But it’s part of the things I’m learning in terms of the quality of the business, in terms of how you are able to provide this product into a marketplace. It’s been a real education.
FROKE: Dick, when we began visiting today, and the date is January 13th and the place is West Point Farm in western North Carolina, the temperature was up to about 70 degrees.
LOFTUS: It’s now down to about 50.
FROKE: And I do notice …
LOFTUS: I’m sitting here thinking “why did we ever come outside here?”
FROKE: I do notice that you have a sweater over your shoulders so if you’d like to take that sweater off and put it on, …
LOFTUS: I’m not uncomfortable.
FROKE: You’re not?
FROKE: Are you sure?
LOFTUS: The 70 was … I went to St. Bonaventure, you know! Are you kidding? I used to do a radio show at WHDL AM radio for Pam Edsel. I used to come out of the dorms and be in snowdrifts up to here, walking a mile.
FROKE: If you don’t stop that, I’ll start talking about South Dakota which was my home.
LOFTUS: That’s worse. I know. I’ve been there too, you know – cable TV – I’ve been in every single state. You travel around, you meet people and they say, “Where are you from?” And I say, “Horseheads, New York, or Oshkosh or Wichita, Kansas.” They’ll say, “Wichita, Kansas? Yeah, you know Ted Hornel? Judge Hornel?” I said, “Yeah, I know him. We chased a cable TV franchise there about 20 years ago.”
FROKE: You got to know a lot of those then as you began in what I would identify as the first major cable job that you had as special assistant to the president at Entron Corporation. Entron, then, was one of the manufacturers of early cable equipment.
LOFTUS: Manufacturer and system operator. They owned systems too.
FROKE: They had systems too?
LOFTUS: It was common for … Jerrold owned systems …
FROKE: Okay, yes surely. Entron got into it too.
LOFTUS: SKL owned systems (Spencer Kennedy Laboratories). It was common for the early manufacturers to also own cable systems.
FROKE: Was Jerrold the first manufacturer of equipment that was specialized for cable purposes?
LOFTUS: There’s some controversy over that, and I can’t really speak to it because I wasn’t there at that time. There are other pioneers who were who could speak more accurately than I can. I do know, for example, Spencer Kennedy Laboratories I’m pretty sure was the first company that had the front end equipment that they manufactured.
FROKE: So it depends on what specifically you’re talking about in the cable line.
LOFTUS: Very much like the computer industry today where it grew like topsy - this product would come from this and this product would come from this and this product would come from this manufacturer and they put it together. It’s like cable…75 Ohm cable because of what was available in war surplus. So the entire industry comes up around the fact that they said, “Hey, this is great. You want to get television from the mountaintop, down here. How do we do it? We do it with cable. Where do we get cable?” You just didn’t walk into a—Radio Shack didn’t exist. You didn’t walk into Radio Shack and say, “Give me some cable.” You went home and said, “Where do they have cable?” Cable that was lying around was the cable that had been manufactured for military purposes during the war. It was field cable…and it was 75 Ohm cable. That’s what guys used. And the next thing you know, you’ve got a $75 million industry – analog.
LOFTUS: Digital is different.
FROKE: What was the unique position that Entron tried to establish for itself in the competition for cable equipment?
LOFTUS: One of the founders of the company was a man named Hank Diambra, a pioneer. He invented the coupler, the multi-tap. Television signals flow best through air. When you put them on cable, you have to have a way to get them into the house. The way that they originally did that was by drilling a hole into the cable, literally drilling a hole into the cable. They put a device on top of that and they put a little pin on the cable and that gave you the connection. Then they ran that cable into your home. So you had an actual physical connection from the cable going from the back end of the TV set to the cable on the pole, and it was physically connected. Needless to say, that created problems. One of the problems that existed was the fact that the cable, more often than not, had electricity on it. So you had that problem. Then also, the cable was in an open environment so there’s all this twisting and turning and twisting and turning and what have you, etc., so the thing could work loose and you’d have—
FROKE: … the connection
LOFTUS: … deteriorated signals and all the rest of that stuff. So there were a lot of problems. That was called the fast t-tap because there was a little “t” that went in there. Hank Diambra conceived of an ability to take the signal into a larger device that was a tap off device and put it in a circuit so that you could then plug in and change values and things like that. So Entron had this multi-tap, and I won’t say anything about whether or not any other company stole the product or copied it and other things like that. Entron also had front end, high powered modulators, and they were a very good, high end technology company. But they had a tube philosophy in their engineering, and they were in the hunt. We built a lot of cable TV systems, put a lot of amplifiers out there. Some of them are probably still out there, still working, in its day.
But it then ran in to two problems. One, it was behind the curve on the solid state approach. It also got hit with a very curious problem in that it designed an entire amplifier series, and the company put all of its resources, financial resources, into going solid state, going transistorized. They bought transistors from RCA, and the transistor spec, the specification sheet on the transistor, speced at 8 watts mono and they put it into the circuit at 8 watts.
It turns out that the specification sheet was misprinted. The 8 watts was maximum. Entron put out this series of amplifiers. They would go out and the amplifiers would be installed in the field and they’d work fine for several hours and then they would fail. So they were modular, and they were pulled out of the modular housing and sent back to the plant. People got them back to the plant, put them into their test rigs, turned them on, and they were fine. Said there’s no problem, sent them back out in the field, worked for a couple of hours, it failed. What was happening was the wafers in the transistors were opening up so the conductivity of the signals failing. But as soon as they cooled down, they’d come back together again.
So the company went through this horrendous period of time when its electronics, on which it had based its reputation, were failing, and nobody knew why until there was a visiting engineer from RCA. We brought in everybody to look at this problem. The visiting engineer from RCA said, “Oh, you’re running these things at max, wide open.” The engineer sat there—this was all the first step with this technology. These engineers were sitting there going, “What do you mean?” They pulled out the spec sheet and said, “It’s nominal. Oh, no. We changed that. That’s a misprint. It’s max. It’s 5 watts nominal. 8 watts are max.” So they were gunning these things up with too much power. But the transistor didn’t blow like a tube. It just failed and then healed and failed and healed.
FROKE: Did the correction get in in time to save Entron at that time?
LOFTUS: What happened at that same time is the company went through a management upheaval, Bob McGehan was forced out. Boston Herald Traveler had bought the company, the company had good cash flow, the Boston Herald Traveler got in big trouble. They had lost channel 5, they’d lost their newspaper. They had channel 5 in Boston, Massachusetts. They lost their license. So that television station was a cash cow for the newspaper, and the newspaper wasn’t producing positive income, so they stuck a straw in Entron and sucked out all the cash. So the cash that was being generated from the cable TV systems, that was being used to support the manufacturing, was taken and siphoned off for the newspaper business. There were management fights over that, management upheaval, and the company failed. A big lesson. You could see it happening. I saw it happening all around me. I said, “This is crazy.” But I literally watched the company be destroyed.
FROKE: At what point did you leave Entron to go with International Telemeter?
LOFTUS: 1967. Entron was obviously an accident waiting for a place to most conveniently happen. That was very obvious to me. Also, when the management changed, I was tainted. It happens, the politics of the situation is such. So it was time for Richard Loftus to move on. I received an offer from Gulf and Western, Paramount International Telemeter in California to go and be their director of marketing, marketing vice president. And I took it – moved to L.A., wife great with child, one little baby, another one on the way. I went to work for International Telemeter, Gulf and Western Industries, Paramount Motion Pictures – a big conglomerate thing, global enterprises. Again I had a lot of duties across the spread of a whole phalanx of Gulf and Western subsidiary operations , although my major focus was at International Telemeter, which the original pay TV company. They were the first company that developed a cable television converter. I sold the first cable converter in the cable industry, a set-top box, which is now universal, ubiquitous. We were the first company to manufacturer these, we had the patent. George Brownstein, Bill Rubenstein, Pat Court had the patent on the original device. I was with them only a year.
FROKE: They merged with Prime Cable? Is that right?
LOFTUS: No, they came to me and said were shutting down the manufacturing division, just shutting it down. I was given that task. I had to go fire my boss, Bill Rubenstein. They shut down the whole plant. So I had to go from Los Angeles to New York City every single Monday just about. They just wanted to go get franchises. So I was chasing franchises. But also they shut down them. I says, “Remember being given the order,” and they said, “Shut it down.” “You mean all the manufacturing?” “Yes.” “What about these converters?” “Sell them. Find somebody else.” Chuck Dolan stepped in, and he bought the rights to a conversion head – Oak Manufacturing. It was the first time I ever had an experience with Chuck Dolan and realized what a genius he is, sharp too by taking advantage of opportunity.
I was out there, and I had reached a stage where I said, “Wait a minute. If I’m going out there and getting all these franchises for Gulf & Western (which later got acquired by TCI), but if I’m going out there and getting all these franchises, I think it’s time for me to go into the business…on my own.”
FROKE: And that’s when you founded Am Video then?
LOFTUS: That’s when I founded Am Video.
FROKE: That would put it about 1968, 1969?
LOFTUS: Yes, December 23, 1968, my 30th birthday.
FROKE: A good way to remember – a very significant event.
LOFTUS: I was 29 when I started, but it was incorporated on my 30th birthday.
FROKE: You incorporated in Maryland?
LOFTUS: Delaware. It was a Delaware corporation. But I had moved to Massachusetts. I left Gulf & Western. Sylvia, my wife, said she wanted to live in New England. I said that I was going to go off on my own, I saved money, had low cushion, and had gotten some commissions from the sale of the converters and stuff like that. I said, “I’m going to go off on my own. Where do you want to live?” So she said New England. A guy named Bob Brooks had made me an offer to join him at SKL and go out and run a whole division of cable TV systems operations and have a piece of that. So I moved to Boston. Unfortunately, within a matter of months, Spencer Kennedy failed. That’s when I just decided to go off on my own. I made some contacts with some people, raised some money, and started a cable TV company.
FROKE: You started it at a time when cable was not moving that fast.
LOFTUS: No. There were worse times prior to that.
FROKE: Than the early 70s.
LOFTUS: There were bad times when the FCC first came out with their First Report and Order. I had a great teacher in law school. His name was Harold McManus. He said anytime a government agency is created to regulate an industry, it’s only a short matter of time before that industry ends up running the regulatory agency. And that’s what happened in the Federal Communications Commission. (Wind blurred dialogue).
The broadcasting industry controlled the FCC in one way and another. The FCC saw its responsibility as being this protectionist, regulatory agency to the technical broadcasting industry. Not that broadcasting is wrong or bad – it’s not. It’s good.
FROKE: But the underlying operation was scarcity.
LOFTUS: The underlying operation was scarcity and a refusal to the opportunities for diversity and choice that cable presented because the broadcasters were in fear, and the movie theater operators were in fear. “Stop cable TV” was on the marquee of all these motion picture theaters – everywhere. It was like cable TV was this great demon. So when the FCC came out with its First Report and Order, it literally struck down the industry. That was the final straw at Entron. It just…
FROKE: And SKL too?
LOFTUS: And SKL. All these companies just could not recover from the fact that they were literally put out of business by the government. There are other things that could have happened as well and did happen. Jerrold survived. It’s now General Instruments. Magnavox and a few other companies that were out there did survive.
FROKE: From a broader base.
LOFTUS: From a broader base. They had more cable TV systems and other things and what have you – bigger, richer parents and things like that. So there are some survivors, but there are an awfully lot of dead companies out there, engineering companies and electronics companies, that literally are government …
FROKE: … victims.
LOFTUS: … killed by government policies. So I became very suspect and continually suspect of government policies vis-a-vis electronics or any other type of industry like the government thing about Microsoft. Microsoft could go broke in a minute. It literally could. You could have all sorts of breakthroughs in software and they’re happening. There’s the government who wants to come in and say that they’re going to say, “Here’s how we’re going to regulate this thing. And here’s how they’re going to regulate this Internet,” and all the rest of that.
We have to be very cautious. Every night when I was in law school—I lived over in an area in southwest Washington. From Georgetown, I went to law school at night, and I would walk past the Robert Taft carillon. There is an inscription in the base of that carillon. It says, “If we would keep democracy permanent in this country, let us abide by the fundamental principles that are set down in the Constitution. Let us make sure that the government remains to serve the people, and the people do not become the servants of the state.” That, believe me, is important and great words. We have to be very careful. So this industry, the cable industry, had, not only competition, but it had enemies. Those enemies were the broadcasters.
FROKE: And the government had a tendency, then, to back up the competition which made it that much more difficult for the industry.
LOFTUS: Henry Geller was the General Counsel of the FCC. We were in a debate, and he said to me (there was a debate going on), “If we wanted the people in Annapolis, Maryland, (where I had built a cable TV system) to get the television pictures from Philadelphia, then we’ll just have the television broadcasters in Philadelphia put more hype on their tower and more power on their transmission.”
FROKE: Which suggests that he didn’t know a great deal about physics.
LOFTUS: One of my favorite guys, I don’t think he knows much about law…
FROKE: Initially, Am Video did very, very well to the spread from Maryland, Virginia, to Delaware.
LOFTUS: Well, we were saved by HBO because what had happened is that the FCC again had come in with another set of rules, all sorts of gerrymandered things as to what signals you could bring, what signals you couldn’t bring, grade A contours, grade B contours, 35 mile rules, everybody was out with protractors drawing circles and everything else and trying to patchwork up to ... and what have you. Literally, the cable depression set in in 1974. But something else also happened – that was the gas crisis. So people stopped going to the movies. Hollywood started taking the clothes off the women, and they came out with R-rated movies. R-rated movies could not be shown on broadcast television. So a brilliant man by the name of Jerry Levin, who had been taught at Chuck Dolan’s knee, and something called Home Box Office, said, “Here’s a real opportunity.” So he went out and bought the movies. With Dick Munroe and a handful of supporting people at Time-Life, started HBO. It had been founded by Chuck Dolan but it gave a lift to it and came out with the movies.
I had a cable TV system in Hoboken, New Jersey, and North Bergen, New Jersey. They were languishing. They were cash flow break-even. And Annapolis was languishing, cash flow break-even. Little system down in Lexington Park, Maryland was making money. A system in West Virginia was making money. The others were languishing and the company was literally stopped. One of the things that we had in New Jersey was the home games of the Knicks and Rangers on Madison Square Garden network. So we had the Madison Square Garden games so if you wanted to watch the home games of the Knicks and Rangers on television, it had to be on cable. Time Life-HBO took that over. Then I met with Jerry Levin. We had these converters, and so with a company called A. J. Wood Marketing Company, they went down to (originally it was going to be at Allentown, Pennsylvania) Wilkes-Barre, Pennsylvania. They interlinked the junk from One Columbus Circle on a telephone line that came across to my headend in North Bergen, New Jersey. From North Bergen, New Jersey we went to Bob Rosencrans’ headend in Wayne, New Jersey. From Wayne, New Jersey we went to a tower that John Walsonovich had in Sparta, New Jersey, from Sparta down into Allentown and from Allentown on over to Wilkes-Barre on the microwave. A guy named Bob Stice and a woman named Minnie Harker and myself were on the streets in Wilkes-Barre, Pennsylvania, knocking on doors and installing the converters so people could watch a movie (“Sometimes a Great Notion”) and a New York Rangers hockey game for $6 a month – you got two movies a night that would cone on at 6 o’clock and the sports games. We were getting 18-25% of the people taking that at $6 a head. So I called up Bob Rosencrans and told him, told John Goddard who had a system out in Long Island that was languishing too. I said, “This thing’s going to work!”
FROKE: The response is that good.
LOFTUS: It was that good. 20% …All of a sudden, “Hey, guess what guys – cash flow!” The two nicest words in the world are “cash flow.” So suddenly we get cash flow.
FROKE: You then began moving it into your systems?
LOFTUS: Yes. I put one right away.
FROKE: What took you to Wilkes-Barre to participate in the marketing?
LOFTUS: They needed converters. They needed my converters so I was the one who supplied them.
FROKE: Okay, okay. All right.
LOFTUS: I lent them my converters. I had a big receivable, a big payable to HBO for the Knicks and Rangers games. My systems were not generating enough money to pay the bills.
FROKE: All right. Okay.
LOFTUS: So I was willing to do anything. If I lost the Knicks and Rangers games, I’d have to shut down the system. So they carried me. Jerry Levin carried me. I was on his arm.
FROKE: There was a lot of that going on in the early days of cable.
LOFTUS: If you didn’t do it…
FROKE: Scratch the other person’s back in order to keep the industry going.
LOFTUS: Right. I remember building cable systems. I borrowed money from Jerrold’s Cy Pomeranz. I remember him coming up to me, wrapping his arm around me saying, “Can you give me something, give me something. You owe me $286,000.” I said, “I can give you $18,000.” “That’s a good boy, that’s a good boy.” It was that type of stuff. We were begging from Peter to pay Paul. You have to remember that when we built this stuff – we put in a cable system – you had to put all your money out there. You had to get the franchise; you had to get the license; you had to go get the contracts from the telephone company and the power company to get up on the poles; you had to get the link ready all done and you had to pay for that up-front to the telephone and the power companies; you had to have insurance; you had to have bonds and all the rest of that stuff. Then you had to go out there and get the equipment. You had to design the system, have the engineering done. You had to go out, climb those poles, hang the cable, put in the amplifiers, and knock on the door before you had one sale. Then you got all that stuff done, and you’re out there doing it and then the federal government came along and went, “You can’t have that and you can’t have that. You can’t do this, and you can’t do that.” They even had a ruling that said that Home Box Office couldn’t show a movie –it was a private company—Home Box Office couldn’t show a movie that had been produced within the last 5 years or that was older than 20 years.
FROKE: Again protecting the broadcasting industry and the motion picture industry.
LOFTUS: I said, “What kind of horse nonsense is this? Who do you guys think you are? This is a private company. We have a right to go out and buy a movie and show the movie. We have the copyright rights.” They stepped in and said, “No. We’re the Federal Communications Commission, and we’re going to tell you that we don’t care what the copyright holders say, you’re not going to be able to show it. Only broadcast television stations can have a movie that’s younger than 5 years old or older than 20. So they’re going to determine who got the product. The federal government, right? And every time they do it, see, and they did it and they said it and we took them to the Supreme Court, we take them to court, take them to court—we beat their pants off them every single time. All the way up to the Supreme Court. I can remember Mr. Justice Brennan with Louis Nizer making a statement in front of him. And Mr. Justice Brennan said, “Now wait a minute. If I put an antenna on top of my roof and I get a signal through Philadelphia, can I watch it?” And Louis Nizer said, “Yes.” He said, “What’s the difference from that or some company coming in and putting up an antenna, getting a signal from Philadelphia and bringing it to my house?” And Louis Nizer started talking about how all the people who depend upon copyright and the little guys—the actors and actresses and grip men and everything—and Mr. Justice Brennan just turned back in his chair—my God, what is this? And I just sit down and I’ll never forget—I was sitting next to Bill Holdensteen, the president of … we won. We won. And they’re right…
FROKE: Then satellite communications came along and microwave, which end the telephone lines, which were expensive and probably were not feasible for national networking of Home Box Office. With satellite, Home Box Office expanded, exploded; programming expanded, exploded; and suddenly cable television was something more than it had been.
LOFTUS: Right, because an extraordinary phenomenon took place and it’s like water seeking its own level. The true programming: intelligence, education, learning—it’s going to find its own level. You can’t stop it—you can try. You can try. The Soviet Union tried. Chinese Communists tried. Castro’s trying, right?
FROKE: The FCC tried.
LOFTUS: The FCC tried. Even in this country, they try. They tried to stop it. And you can’t; you see, you’re not going to do it. People are entitled to it. It’s their entitlement. You can’t protect the cable television industry or you can’t protect the telephone industry and you can’t protect any industry. You don’t do that. You have to let the energy flow because it’s going to and that’s human nature. The glorious thing about this country is we have a Bill of Rights. We have that right of free speech, freedom of expression. And the right to not only speak and the right to say it …
FROKE: And those rights have a tendency to support the economic system.
LOFTUS: They absolutely do because it could grow. One thing I’m really proud of—two or three things in cable. One of them is I really created a lot of jobs. I mean there’s people out there working today feeding their family, what have you, in our economic situations that didn’t exist, you know, on the day I was born, the day I started in the business, they didn’t. And other people have done that, too. The thing I’m really the proudest of is C-SPAN. Gavel-to-gavel coverage of Congress to open to people’s homes … of course I then remembered seeing Teddy Kennedy walk out of the dressing room, dusty around his collar after he had all his makeup done. I’m sitting there saying, oh my God, what have we done?
FROKE: What are we coming to now?
LOFTUS: At any rate …
FROKE: Your Am Video grew. The last figure that I saw in reading about your background was 7200 subscribers in about 7 or 8 states. What was the maximum subscriber count with the stimulus of HBO? In other words, before you sold Am Video, how big did you get as a multisystem operator?
LOFTUS: 37,000 subscribers. Something like that. We were one of the largest independent operators.
FROKE: What would you say characterized your company’s—what personality traits, what business practices did you bring to Am Video that were unique?
LOFTUS: The ability to talk other people into giving me money. [Laughter] And franchises—yes, we can do that when the … alone can do this …
FROKE: Consumer service: that’s what I was leaning toward. Was there anything unusual with the service that you gave your subscribers? You promised a certain product and you delivered that product. Did it go beyond that?
LOFTUS: I’ll give you one example. I was president of the company and at one point in time I think we had 64 employees or something. I was in North Bergen and all of the service personnel were out. A phone call came in from a customer who said his cable wasn’t working. And we said, well, we can’t get somebody there until like 8:00. He was an Orthodox Jew and he said, “I’m going to go into the religion at sundown on Friday.” It was a Friday evening around this time. Four something. And he said, “You can’t come into my house after sundown. You know, I’m Orthodox …” Of course, I’m sitting there saying to myself, so he’s going to watch television?” At any rate, I said, “OK, where’s he live?” I got in my car and drove to his house. I went into his house and he had the TV tuner tuned to a different channel. This happened a lot in the early days when we first started using converters because we had to have converters there. The TV channel had to be set to channel 3 or 4 or something like that … you did all your tuning with the converter. So they hire a babysitter or something else and they had came in and wouldn’t know they had cable and weren’t familiar with it and you spin the dial. So I go walking into his house, 4:30 or something in the afternoon, Friday afternoon. He was there with the yarmulke and he’s getting ready to light the candles and I walk in to look at the TV. I turned it to channel 3 with the home converter and I said, “There you are.” I was in a business suit and he looked at me and he said, “What are you? You’re a service fellow or an engineer?” I said, “No, I’m president of the company. And there’s nothing more important to me than the customer.” I said, “Leave that TV set tuned to channel 3. Don’t turn the dial around. That’s all you had to do to fix this thing …worse than that.” He said, “Wow.” He took the time to write a letter to me, a personal thank you telling me how impressed he was the president of the company went out on a service call so he would have television on Sunday when he wanted to watch a football game after the holy day, the Sabbath was over.
FROKE: We’re going to stop at this point and then pick up our conversation tomorrow. I mentioned earlier in the conversation if you were getting cold you could put the sweater on. You said you could survive. But my dog, who we brought down here to Lake Lure, is beginning to whine in the background and I think my dog is getting chilly.
LOFTUS: Now my worker is coming in here with his hours…
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