Interview Date: July 2002
Interview Location: Denver, CO
Interviewer: Rex Porter
Collection: Hauser Collection
PORTER: I'm Rex Porter. We're at The Cable Center for the Barco Library. We're interviewing today Mr. Ed Callahan, a long time cable pioneer from the engineering side. Hi, Ed.
CALLAHAN: Hi, Rex. How are you?
PORTER: Good. Could you start us off by going back to your original roots, where you were born, grew up, went to school, and so forth?
CALLAHAN: Okay. You mean like being born at a very early age, that type of thing?
PORTER: Sure. The log cabin aspect.
CALLAHAN: I was born in Cleveland, Ohio, and I was one of five children. One of my very interesting neighbors was Phil Donohue. I think you probably recognize the name. I got a little Christmas email from Phil last December. I understand he just got a new show going on. But we went to grade school and high school together at Our Lady of the Angels grade school and St. Edward high school in Lakewood, Ohio, and then Phil went on to Notre Dame.
PORTER: Before you get away from Phil, do you realize that the first question ever asked to an interactive TV audience was - do you like Phil Donohue?
CALLAHAN: Really? Was that the very first question?
PORTER: Asked by Qube in Columbus, Ohio. That's the first question that they ever asked the Qube viewers.
CALLAHAN: Well, after Phil got out of college, he went down to Dayton, Ohio and had a radio program and that's how he got launched, and it got syndicated from there and then he went on to national radio and then on to TV, and now back on TV as of this week, I believe. Anyway, I went to a couple different colleges. I went to the Case Institute in Cleveland in electrical engineering, which is now Case Western Reserve, and at that point I decided to get out into the workplace and do both college and do some technical working. So I interviewed with IBM and took a job with them in Poughkeepsie, New York, which is in the Hudson Valley, and I worked there as a young fledgling engineer while I was going to night school. I went to night school at Marist College right on the Hudson River in Poughkeepsie and got my degree in physics. But along about1965... oh, the division of IBM that I worked for was called the advanced systems division, and we were responsible for finding new technical areas of challenge for IBM to investigate, and starting around 1965 we heard cable operators like Bill Daniels talking about cable television and someday it was going to be interactive, whatever that meant, and that was where the future was at. So starting around 1967, we were doing interviews with various cable operators.
PORTER: Now would they come to IBM or would you go out?
CALLAHAN: Actually, both. We would invite them into our lab because one of the things we were doing was playing around with new uses for video, and one of the things that we had in my lab was a video freeze frame, a video frame grabber, and we took a floppy disk drive and make a video buffer out of it. It was only gray scale in those days, no color at that point, but the notion was to bring cable operators in and show them that you could address a frame a video in 1/30th of a second to a device that would capture it and display it on a monitor on a TV set, and we talked about the notions of interactive shopping, interactive education, and that was probably around 1966 or '67 that we were doing that. We kind of felt like we were pioneers in doing what we were doing at that point, but one of the things we found out when we went around and visited cable operators was that first of all we had to explain what a cable system was, and the idea that when you looked at a cable system if you think for just ease of discussion or description you could talk about the headend being located right in the center of the town with the distribution center, and if you looked at trunk lines moving north, south, east, and west out of that facility, you could look at actually each of the trunk lines being separate cable systems. Now certainly you would take all the local broadcast signals, and those would be common on the trunk lines, but you could then take separate programming and insert it on the trunk lines for the various areas. And then when we got that notion across we would start talking about two-way. We discussed how the cable itself, the coax is inherently multi-directional; you don't have to worry about that. It's only when you put amplifiers in, and if you put an amplifier in and it only amplifies one-way, which is downstream from the headend of the subscriber signals can't get upstream. So we talked about putting in di-plexing filters and putting return amplifiers in, and then the notion came up, well, wait a minute now, a lot of the people we talked to understood putting a channel of base-base video over coax, but how did you get all the cable signals? In those days it was 12 channels, maybe 20 if you were lucky, and the question was how on Earth would get all those down the cable system? So I talked about lanes on a freeway and cars traveling on the lanes on a freeway, and as long as cars stayed in their own lane everything was fine and you could just keep stacking lanes up on the freeway. That's how the downstream worked, and then there was a cross-over region to separate the downstream from the upstream, and that's what the di-plexing folders took care of at the amplifiers, and I said that that cross-over region was the median on the freeway. So you could have eastbound traffic going one way, and westbound traffic going the other way, and hopefully the twain never met because of the median or the cross-over region. We met with ATC here in Denver with Monty Rifkin and Doug Dittrick. We met with Jack Porer of General Tire, and you would say, well, why were they interested? Well, at one point General Tire sponsored an over-the-air pay television in Hartford, Connecticut. Do you remember that, Rex? So they were very interested in it, so we met with Jack Porer. We met with the board of Times Mirror, and because they were in the publishing business they wanted to know could there possibly be a future for electronic broadcasting? And then the question of, well, how did people respond to that, how would they ask questions, hence the notion of interactivity? So that was kind of the way we got launched into studying the cable industry.
PORTER: Now, when you were holding those meetings with the MSOs, did you have to also have interface with the equipment manufacturers like Jerrold and RCA?
CALLAHAN: Uh-huh, yeah, we did, actually. I remember taking some of the folks that I worked with at IBM and visiting Jerrold in Pennsylvania, and going through some of their facilities and so forth and seeing how they did things. So it was interesting to see the notion of how these amplifiers got built, taps, splitters, and all the accoutrements for cable television.
PORTER: Because this is back in such early days that most people just had basic cable systems and no other services on it, so you guys actually started the forward thinking that led down the road to the services that we have, we like to call ourselves broadband.
CALLAHAN: Broadband services, right.
PORTER: So now you've got these people together and there is some consensus that this just might work. What happens next now?
CALLAHAN: Well, the interesting thing that happened next was at IBM the Justice Department was investigating data processing versus data transmission, and IBM had a filing that I recall was something about four feet high showing why the good Lord intended for data processing not to be regulated, but data transmission could be regulated because never the twain would meet, you would never be in that business, and all of the sudden here we are studying cable television. And cable television, gee, interactivity, delivering remote databases to subscribers? Boy, oh boy, is that data transmission or is that data processing? So they decided to not pursue that any further, but I remembered one meeting in particular, Rex, here in Denver with Monty Rifkin at ATC, and Monty said, you know, this is all very interesting and we think that this is very likely to happen in the future, but we don't have anybody in our industry to talk to somebody like you and the computer industry. How do we solve a problem like that? And I said, well, Monty, very easy, why don't you hire me? And within the month I was working for ATC here in Denver.
PORTER: And this is at the start...
PORTER: Yeah, this is the start of a company that today is a giant in the communications field, Time Warner, but back then it was ATC.
CALLAHAN: Right, and as I recall when I joined in 1970, I think they had 330,000 subscribers at that point, so it was really in the early time. One of the things that we were looking at in those days was expanding the bandwidth going from 12 to 20 channels and that was quite a step for us, and then we started looking at this notion of interactivity and two-way, and what should we do to see if there really was something there? Well, in my journeys around the industry, visiting with people, going to the NCTA shows and SCTE functions and other things, I came across a company called EIE in North Hollywood, California, Electronic Industrial Engineering, and it was run by Jack Thompson and Don Chandler. They were making some two-way amplifiers, and they were using them in California with the Foot Cone & Belding advertising agency.
PORTER: This was a division of RCA?
CALLAHAN: Yes, RCA took it over, I believe, in 1975, but this was probably in '71 that we were talking to them. We were talking to them about Kissimmee, Florida, so we installed a test area in Kissimmee, Florida and it used addressable interdiction, and they were pole-mounted jammers and we had two channels of pay TV for the test homes, and I believe it was something like 25 homes were part of the test, and it proved that the technology could work, that if the subscriber could respond to a program guide or a menu of what was available and they said, gee, I would like to buy that program and I see that it's $2.95 or $3.95 or whatever it was for the test they could so indicate on a little remote control that we had with a little interactive device, and they could order that up. So the computer at the head end would then address the jammer serving their house and turn off the jamming and allow them to watch the programming. I remember that that got an awful lot of publicity in the press because the idea of being able to respond to a user's request was something very new, and so I remember that in Kissimmee, Florida. It was very, very interesting.
PORTER: This was a very big and expensive test down in Kissimmee and Orlando. Was Silicon Graphics involved in that up to that point, or did they come in later?
CALLAHAN: No, that was the later thing under Time Warner.
PORTER: Oh, okay.
CALLAHAN: That was more recent vintage within the last five or ten years.
PORTER: So this was Shorty Coryell's cable system.
CALLAHAN: Shorty Coryell was the engineer, yes, uh-huh. At the time, when I first met Shorty he was working for Al Stern, Stern Communications, and he had a lab in Lakeland, Florida, and so we got Shorty interested and we hired him into ATC back in 1970. But the idea of this interactivity was very good, and we then had something, a little bit of a test bed that we could take people in, we had the media come in and so forth, and the interesting thing is, I bet you don't know who ran that experiment in Kissimmee at ATC, a name you might have heard of – Joe Collins?
PORTER: Oh, sure.
CALLAHAN: Right, so Joe Collins was back there and he was an admiral's aide in the Navy, and after he got out of the Navy, Monty hired him to run the interactive, it was called Polycom.
PORTER: Yeah, I remember Polycom. And that was his first entry into...?
CALLAHAN: Into cable, right, in Kissimmee, Florida. So then we started expanding systems, trying to get more bandwidth again in systems, and each time we tried to add another ten channels or so of bandwidth heading towards the goal of being a real broadband operator we always ran into some kind of problems, one of which, and it's well known to you with your background, is that in the early systems the coax was made so that it would pass frequencies up to 220 or 230 megahertz, and there was periodicities in wheels and pulleys and gears in the manufacturing process and the drawing process.
PORTER: And the screw itself, and the extruder.
CALLAHAN: And the screw and the extruder and all those things. All those things caused anomalies in the RF performance of the coax. What they would do at the cable manufacturers, they would put those above the highest channel of interest, those periodicities which would cause return loss problems or variations in the impedance of the cable which could cause ghosting reflections and all those kinds of bad things that you don't want, and the problem is every time we went to increase bandwidth, we looked and we said, uh-oh, we're running right into those things and now we need to...
PORTER: Develop suck outs.
CALLAHAN: Develop suck outs, exactly, and now we need to replace the coax. Well, wait a minute, now if we're going to have more bandwidth didn't those old pressure taps only pass 320 megahertz? Well, then, we had to get directional taps and quit cutting holes in the cable like the pressure taps did. I don't know if the thought originally was that if there was a flow downstream maybe you had to let the flow out so you had to put a pressure tap in to let the signal run out.
PORTER: You had to let some of the water out that got into the old cable.
CALLAHAN: That's true. But in those days it was really interesting because a well-constructed cable system relies on very good mechanical, and I like to call it plumbing. It's hard aluminum cable, in those days, that was before obviously fiber optics, and the connectorization was an issue, the ceiling up or the amplifiers housings, the power inserter housings, the directional taps, all of that required very good waterproofing.
PORTER: And just about that time we had gone from flexible trunks and feeders so a lot of the construction people didn't realize you just can't handle that product the way you did with that flexible stuff.
CALLAHAN: Oh, yeah. You mean the braided cable?
PORTER: Oh, yeah. All of the days of the cable knockers? It turned out that the braided shield in the cable would oxidize, and so there were people that actually went along with a stick and beat on the cable a little bit to disturb that interwoven braid and to cause a good electrical contact again, but with the advent of hard aluminum cable we didn't have to do that anymore, so I guess we put a whole group of people out of business and retrained them to do something other than cable knocking. So, anyway, the bandwidth kept getting higher, then the thing was, well, wait a minute, if we've got all this channel capacity what are we going to do for channels? And around '73 or '74, I don't remember the dates, but Home Box Office in New York was being distributed by eastern microwave on the east coast, and the thought came, and Scientific-Atlanta was the vendor that was pushing the technology for using a communications satellite, a synchronous satellite to deliver cable to cable headends. I remember in 1975 that Monty Rifkin and I went down to Jackson, Mississippi and watched the mayor flip the switch when the Thrilla from Manila fight came on. I believe that at the same time, UA Columbia in Ft. Pierce, Florida turned on their dish. So that was really the start of satellite distribution, and wow, we had one channel delivered by satellite, but you know....
PORTER: And the dishes costs hundreds of thousands of dollars.
CALLAHAN: Oh, yeah, $130,000 installed, and it was a ten-meter dish. I mean, it's not something you hide very easily.
PORTER: You don't want to put that in your backyard.
CALLAHAN: No. Not in my backyard! So once that started then they said, well, are there ways to get more programming on the satellite, and of course that increased and we went to more and more channels on the satellite. Well, now, the cable systems were 12 channels in the early days. Well, the early satellites were only 12 channels. They only had 12 transponders, and then they went to cross-polarization and had 24 channels on later satellites, and so every step, if you will, and every hurdle that we crossed in one field, like expand the cable bandwidth, now we had to expand the satellite capacity, and then the TV sets couldn't handle all these channels so we had to use set top converters. And the set top converters in the early days didn't like a lot of channels, either. You started putting 20 or 30 or 40 channels on the converters they would suffer their own problems of distortion and overload and so forth. So the converters had to be improved, and it's really interesting as I look back over this because every step from the receiving antennas, the satellite antennas, the off-air antennas, the program origination equipment, everything had to be improved, and something would be improved in one area and it would require improvements all the way down the chain, and so it kept leading to more and more improved operations.
PORTER: When you were looking at two-way, obviously all the manufacturers didn't immediately just jump out and start making two-way amplifiers.
CALLAHAN: That's true.
PORTER: How much of a problem as an engineer for one of the major MSOs, you certainly weren't the largest at that time but you did grow to be the largest, how much trouble did you have getting design people at the various amplifier manufacturers to step forward and everybody make two-way amplifiers?
CALLAHAN: It took a lot of handholding, quite frankly because here's this little company, EIE, in North Hollywood, California, and I think there was one other company in upper New York State at the time that was making two-way amplifiers, and they were like voices crying in the wilderness, Rex. The big guys said, well, this is fine for little systems, it's never going to play in the big markets, and so it took a number of years to see product lines being developed but of course once one of the major manufacturers had it then everyone had to have it.
PORTER: Do you think it was the franchise wars from the big cities where they had to get these kinds of services that really made the...
CALLAHAN: Most definitely, yes. I think that was one of the driving features because you were always looking to get that one leg up if you could during a franchise proposal, and differentiate yourself from the rest of the group. Having interactive, two-way amplifiers was certainly one way to do that. With the publicity that ATC got in 1971 from the interactive trial in Kissimmee, Florida, although as we look back it was very rudimentary, two channels of addressable interdiction, but it led just to the thought process of well, if we can do that, what else can we do? And then we said, well, gee, we ought to bring city fathers down and show them, or their cable consultant or whoever, and show them how this is done. So, yes, that very much was a driving factor.
PORTER: You've had a lot of good engineers. We mentioned Shorty Coryell, probably the best hands-on, school of hard knocks engineer that has come out of the cable industry. You've had a lot of other good engineers. You've had Jim Chiddix and other people, Steve Johnson that is very active today, there are a number of good engineers that have come through the years while you've been at ATC. How hard was it for you to find people that could tune in to that futuristic engineering, to accept that those things really could be done?
CALLAHAN: Well, in some cases, I guess I can't generalize, but in some cases it took a little more "I'm from Missouri" kind of attitude and they had to get some hands-on and play with it to see that it would really work, but there were some people that just sort of adopted to it, and they said, wow, I've been building these one-way systems all my life. This is really exciting, now I can see that there's some new technology that I've got to learn and improve myself and learn how to do that. But one of the first things we found out in building two-way systems was the minute you activated the reverse path you built a giant antenna system. Down in Florida we picked up Radio Havana and other things that were coming back on the return path, and we were trying to separate those out from the data signals.
PORTER: Sell that to the government, right?
CALLAHAN: Sell that to the government, that's right. It was called a well-placed antenna service. The idea then around about that time with the interactivity was the notion of data transmission, and initially other than just the few interactive experiments, it was transmitting some downstream data and typically would be used in the vertical interval and stock quotes and things like that. In fact, I remember GI Jerrold had a box called the Star Quote that they field trialed in a few places and – when I had moved to United Cable, so that would have been in the early '80s – and you could actually set up your portfolio on there and then watch delayed stock quotes come across. But anyway, so the notion of transmitting data on the cable systems was becoming very well thought of in those days, and that this could be an opportunity to try new concepts. I had mentioned earlier that we had turned on the earth station in 1975 in Jackson, Mississippi. Well, something else we tried was play cable, and that was with General Instrument Jerrold, as well. That was delivering of interactive games to a box in the homes. So it wasn't true interactivity, it was one-way delivered, but these were video games that would be downloaded to a play cable station or something like that, and the games were rotated so that some games that people seemed to like would stay on, and at the end of the month other games would be taken off and replace, and so forth.
PORTER: Now did you only have this service in Kissimmee?
CALLAHAN: No, that was in Jackson, Mississippi.
PORTER: In Jackson, Mississippi, okay.
CALLAHAN: In Jackson, Mississippi where this was tried. By that point, the trial in Kissimmee had actually finished, so that was another example of services that we tried in seeing what can we do with expanded capacity in a system, and not just more channels necessarily of analog video, but starting to experiment with some of the data services.
PORTER: Some variety of services.
CALLAHAN: Some variety of services, right.
PORTER: So, here we are, we're looking at a basic concept at this point in basic at this point in cable television history that perhaps we can do some business data transmission, perhaps bank-to-bank or business to bank, or business-to-business. At some point, you began to develop the idea that maybe in addition to multiplicity of entertainment channels that we could send data for other purposes, and what I'm alluding to is the advent of the modem perhaps in a customer's home so that he can have a computer or personal computer. That must have been weird as an engineer trying to explain a concept to other people when they just thought that our lines were cable television. Can you talk to us about those early days when people looked at you and sort of shook their head?
CALLAHAN: Right. Well, it was not an easy sell to the information technology manager of a bank or a publisher or someone else who might have multiple offices. In those days we were just looking at data transmission within a city. This was way before internet days, but the idea was if they had branch banks in a city, and they were always transmitting data to them, that we could put a device called a modem – it stands for modulate/demodulate – to modulate the data on to the cable system and to demodulate the data off at the receiving location. One of the prime considerations that the telecommunications managers would talk about, they said, well, we know what our reliability is on the telephone lines because especially on our critical services we used lease lines, and so we know the lease line availability and we have contracts in the meantime to repair and so forth, and so how are you folks going to address that in cable? They might say I'm a cable subscriber at home and occasionally my pictures go off, I know you don't like to hear that, Mr. Callahan, but they do do that, and we have to get on the telephone and call the cable operator and say, hey, we've got a problem out here in this particular area of the city, our pictures are off. So how would you address that? Well, that kind of led... and coupled with, again, a good point you had earlier with the drive or the push from the cable franchising side would be an institutional network, and the institutional network would be something more reliable, designed for high reliability, it wouldn't have a lot of customers connected to it, and so you wouldn't be always connecting into or extending the trunk or doing something like that on an institutional network, and then we used standby power, which was another thing because if the AC power went off at a particular location for our power supply then that whole portion of the trunk line of the system would go off. So that was no good because that was not a reliable data service. So we started powering the amplifiers on the institutional networks, and oh, by the way, the institutional networks were not the same split-in frequency. These were called mid-band splits and so that you had 5 to 108 in the return direction instead of 5 to 30 in the early days, or now it's like 5 to 40 in the return direction, and then from something like 160 out to 300 in the forward direction. And so the notion was, well, there's going to be more data coming back then there would be on a simple subscriber system, and nobody ever thought of computers in the home in those days, and the idea was that we could just put these modems on. Well, these modems were basically point to point devices. You took a little slice of frequency and you went to an Ari Zimmerman at PhaseCom, or Cliff Shirak in, I forget the name of the company right offhand, but anyway, and Bob Dickinson. I think in the very early days they were pioneering that, and I think they were working with Manhattan Cable on the institutional network in there. So they were doing point to point data and that type of thing, but the notion of a whole bunch of addressable modems was still a little bit in the future. This is, now we're talking about the late '70s timeframe. Then in 1981 I moved over to United Cable from ATC, and that was with Gene and Richard Schneider, and they were very open to ideas about how to increase the usefulness of the cable system and make a broadband thing out of it, and the whole idea of addressability then became forefront because if you had premium services you would have to have some way of controlling those, and so the set top converters, which we had done to tune channels that the TV sets, which were not cable ready, in order to tune the 30 or 40 channels on a cable system, we now had to make those converters not only interactive but we had to make them addressable so that we could turn on Rex Porter's converter and allow him to watch HBO, and some systems were experimenting with movies as well, pay-per-view movie as opposed to just a subscription service. At United we decided that that was really the only way to go to increase the bandwidth and the usefulness of the bandwidth. So we decided to put addressability in all of the cable systems. So now if all the cable systems were addressable it was fine, you could address a subscriber and deliver either a subscription or a pay-per-view program. The notion was how do you build for this? And so now you've got back at the computer in the headend, which was the manufacturer, whether it was Scientific-Atlanta or Zenith or Jerrold, the data would be in their computer but now you had to get it to the billing system and that was a leap of faith in itself to try to get meaningful data into the billing system and correct data. Again, United was using, at that time they were using Cable Data. The decision was made to put all of the cable headend computers online with regional United Cable owned cable data centers.
PORTER: Now when you say in the first remark they used cable data, you're talking about the company Cable Data?
CALLAHAN: Yes, good point. Cable Data was the company out of Sacramento. We had, I believe it was six or seven regional billing centers around the country, and all the cable systems, the addressable cable systems in that particular region would communicate and report the data, the billing data to that computer, and then here in Denver, not very far from where we're sitting today, Rex, we had an office and we had... no, I'm sorry, that was in Tulsa, the main system was in the cable system in Tulsa. And Mark Savage, I think you remember, was the manager down there. That system then would take the data from the seven regional billing centers and bring it all back. So we had not quite real time, but very current data on what was selling in all the markets. This was very valuable because you could go to a programmer and say, well, look, this type of program sells. Is there some way you can develop maybe another channel but a little bit different theme, but we think we can sell that and we can give you early feedback as to how well it sells. So that really pushed the notion of addressability.
PORTER: One of the things that I guess we found from an engineering standpoint was with addressability a lot of the cable systems really weren't clean enough to pass the signals, especially on the return path. Could you talk a little bit about one of the most important programs, and we hated it because it meant a lot of extra work, still means a lot of extra work as far as we're concerned, and that was the CLI program. We didn't think our systems leaked. We didn't want to think our systems leaked. We didn't want to think we had ingress.
CALLAHAN: Rex, in spite of those stories about people getting free cable service by having an antenna in their attic pointed at the nearest amplifier and they could pick up the channels? But no, it didn't leak.
PORTER: But a lot of the cleanup that you did out in the cable systems and at the MSOs, and it could have been force fed, it could be argued that we would not have done it if the FCC hadn't of made us do it, but we probably did ourselves a great favor with the CLI program because it solved a lot of problems that not only made addressability a viable thing, but it also led to the advent of being able to take data in the home where you've got multiple messages going in all directions, and we just couldn't have done that.
CALLAHAN: No, absolutely. You're right. The addressable delivery of entertainment services was one thing because those were polled systems, and we polled Rex's converter and we listened. Oops, it got garbled. Somebody turned on a sewing machine.
PORTER: A shortwave radio or something.
CALLAHAN: A shortwave radio, or started up a lawn mower right outside near the cable drop and all of the sudden it wiped out the return path from your drop, and then we would say, well, Rex, we didn't hear you. And of course this was all done at electronic speeds, but still, think if we had to go back two or three or four times to everyone. Now, if you only had a few hundred or a few thousand subscribers doing that I guess you could manage to live through that, but it was not really a happy thought if you thought about putting that out in a system with 100,000 or 200,000 or 300,000 subscribers. You would spend all your time in the overhead of polling and trying to recover that data. So the notion that we had to tighten systems to prevent leakage to keep both the FAA and the FCC happy, and at the same time by doing that we did ourselves a very big favor because we shielded the return path to a great degree from the ingress that we were getting from all the various sources, and we made it really usable. The notion of the internet was coming into play in that timeframe, and people started having some computers at home. It was still mostly business driven. People went to work, they had computers at work, and they would go out over T-1 lines and get on the internet and so forth, and then somebody thought, well, gee whiz, you know, I go home at 5:00 or 6:00 at night but there may be something that I need to get. How am I going to get that? And somebody started lugging a great big desktop computer and all the paraphernalia that goes with it home, but then somebody had the idea, well, let's make smaller computers, and they made smaller computers, of course laptop computers, with portability, but all of which required access to the internet because offline you can do just so much, and then you got to the point where you're saying, gee, I need to visit a website and pick up some information or I need to upload a file to my buddy on the other side of town, and so then the modem service in the homes became a very critical issue. That really caught on, and again, there was the technology, right? We're introducing cable modems in the home, and it's not just the banks, it's not just the shopping malls that are going to have business data. It's going to be all the homes, potentially, you'd like to think could be your subscriber and you're going to have to have a system tight enough to do all that. So here's where we introduce another technology, and we bootstrapped ourselves up and cleaned up the system, and oh, by the way, we stopped the radiation so we could meet the CLI, the cumulative leak index. So all those things, it's just interesting how all these things... it's sort of like a recipe, Rex, you put it in the bowl and put the mixer on and see it all stirred and all of the sudden it comes out a cake. Well, we kept baking new cakes. And not all of them were fruit cakes either.
PORTER: It's really funny, some things we hated the most turned out to be the best for us. It's like medicine that doesn't taste good, but it sure cures the ill. And some of the things we've gone through... as a vice-president of engineering, once again, for a leading, cutting-edge company, what was it like to go to the shows knowing that you've been discussing all these things? It must have been kind of intriguing before the show started because you knew ahead that there were going to be new products that would come out from Jerrold and from Magnavox and from Phillips and from Scientific-Atlanta, all of those companies, you had some fore knowledge before you got to the show. What's that feeling when you hit the floor, Ed, and you know that you're going to see... you know to ask for that equipment. Everybody else is going what's new? You're going have you got it yet?
CALLAHAN: Well, it was always very interesting because sometimes the vendor was ready to actually push it in a big way in the booth, but if Ed Callahan and his company were the only ones interested in that maybe it wouldn't be pushed that much, but behind the curtain or in the hotel suite, come on over and we'll show you the latest.
PORTER: Private showing.
CALLAHAN: Private showings, that was the big notion, and I remember in those days, Rex, it was funny, I almost had to look for a side door to get in, but you couldn't, you had to display your badge and have the security guard, and I would come in and try to cut this way because people would be standing there and say, Ed, you've got to come to our booth. And I said I honestly will because I did, I made it around to everybody's booth. I made a point of doing that, but it was really exciting to see things that we had talked about in the concept stage, and now here they were either ready to sell or almost ready to sell.
PORTER: Well, that's intriguing. I think that a negative aspect of being in your position is that because you are cutting edge, because you're always looking out you know that things are going to happen out in the future, you have to work with a little bit of aggravation, too, and that is you're going to get products that because only you and your company is willing to try that technology you've got to pay a lot of the upfront costs because to make a limited edition of a product for a company like ATC or United that's willing to try these new things, if you're only going to make 50 of them for one of your systems you're going to pay out the nose, yet you know that the rest of the industry's going to take advantage of all the aggravation that you had to go through. What's that feeling like? There's no way we could understand that, but you must have had to put up with it.
CALLAHAN: Well, the whole notion would be, Ed, you got us into this, now you go and describe to the vendor and you tell him what forward pricing means. Tell him that they can't get all their unrecoverable engineering costs, tell them they can't get all those on the first 50 units that we're going to buy, that they're going to take it on faith. I said, well, that's easy to say but at the same time they've got shareholders, too, and they've got a bottom line, and I think that's one of the things that I did feel good about in all the years that I've been in the industry is that I would always try to look out for the vendor as well because they had their bottom line, just as we as an operator had a bottom line. So there was mutual interest, so if you could try to figure out how to help them they would try to help you as well. Maybe they couldn't completely forward price, but maybe they could do a little bit to help you and make it a little bit more palatable so that I could go back to the Schneiders or Monty Rifkin or Doug Dittrick or whomever at the time, and say, well, they are going to try to work with us.
PORTER: It's only fair because if you say I'll do a test bid, I'll do a test bid in Kissimmee, and everybody's going not me. When Ed proves that it works then I'll jump on board, and all of the sudden you have a line of products that was unheard of before you were willing to do it in Kissimmee, and you have seven other MSOs that now jump up and say I want it. First of all, they shouldn't jump in front of you getting your source because you were the proving, and there ought to be some way that if you paid for that first Kissimmee equipment at a premium price, somewhere down the line when you're lining up saying if it hadn't been for me we wouldn't have had this two-way communication equipment to begin with, I've been paying you $800 for an amplifier, you now can sell it for $400, but you've got to sell it to me for $300 because I've got to make back all the $800.
CALLAHAN: Those were interesting discussions, Rex.
PORTER: And it's only fair marketplace discussions, too.
CALLAHAN: Exactly, exactly.
PORTER: In a sense, you became manufacturers' field lab, research and development laboratories. They could come out into the system, see how you were doing it, see how well it's working, but it's the only way they know what public acceptance of that concept and equipment does. It must have been some fun times.
CALLAHAN: Well, I remember one fun thing, going back to Jackson, Mississippi again, at ATC. I don't know if you ever heard the story of the killer pole, p-o-l-e, the telephone pole, the killer pole?
CALLAHAN: Well, we and Jerrold, who provided all the distribution equipment for Jackson, Mississippi at that time had a problem in that one amplifier kept burning out its internal power supply. We had surge protectors, we had everything on it, and it kept burning out. I remember Mike Jeffers, who you know well, Mike Jeffers at Jerrold, and Mike says that can't be happening, there's got to be something wrong. I said, look, we 1000% checked these before we put it on the pole, and it always dies after it's in service for x amount of time. You remember Jack Ford? Jack Ford would come down. He said, Ed, we've got a problem. We don't know what's going on, what can be going on? Anyway, long story short, it was sheath current. It turns out the power company along that stretch of trunk amplifier had a very poor grounding system, and guess what was the return path of the generating plant? It was our cable sheath. When we finally thought it couldn't be that, could it be? We actually pulled out the power director plug so that the AC, at that time 30 volts AC coming in at the center conductor couldn't power the amplifier, we pulled it out and the amplifier kept running. I turned around to Mike and I said, look perpetual motion.
PORTER: I bet they did a tech node on that one. Every system must have a...
PORTER: So you're at United well before the use of internet modem to modem to modem.
PORTER: Are you doing mostly international work? I know as vice-president of engineering you probably touched on all facets, but had United begun to do more international work then?
CALLAHAN: We started to do some. We were looking in the UK at that time, and we were looking at doing a management contract with a system in Scotland. We went over and had several visits with them and talked to them. I believe it was a publishing group, again, the local newspaper was going to be one of the lead factors in developing the cable franchise. I'm trying to think of when that was. Would that have been around 1985, perhaps?
PORTER: '85, '86.
CALLAHAN: Somewhere in that timeframe, I think, Rex. So I think that was really one of the first things that we saw, but again, we were still so busy with total addressability, interactivity, data transmission, and what was that newfangled thing, what was it called? Fiber optics? That was coming along then in the late '80s. Let me think, let me jump back just a moment. One very early experiment that we did with fiber before it ever really got introduced into general usage in the cable industry was you could deliver one base-band channel of video on a fiber. This was again going back to ATC, so this would have been in the late '70s.
PORTER: Now is this not because of the fiber but the laser itself? The laser transmitter?
CALLAHAN: Well, it was multi-mode fiber in those days, and not single-mode fiber. The sources were just LEDs, and limited bandwidth, but CommScope had a small company that they affiliated with out of Massachusetts as I recall called Valtech, and Valtech had this one channel system. At Southwestern Cable, which was the ATC system in San Diego, the studio was remote from the headend and we thought, gee, what a good opportunity to try fiber. And I can remember out there literally in the trenches, and it wasn't all that long because you couldn't go that long on multi-mode fiber, but we strung down through a downspout, itsy-bitsy spider, the water ran and washed him out. We dug a trench, we went down a hill, I think we might have had to bore a little bit under a parking lot and up in the headend, and sure enough, we could get the one channel of video, and so that was my first exposure to fiber. We thought, gee, that's terrific, but where's it going to go from here, and that was in the late '70s. So it wasn't until the late '80s that we really started talking about fiber and talking about using a laser to modulate the signal. The lasers up to that point had been used by AT&T Bell Labs, they were digital lasers, and it's very easy to turn a laser on and to turn it off, you don't have to worry if it's linear. All you have to worry about is coupling the light in to the fiber and getting it down to a remote location and either repeating it, if it was to go on further, or to a receiver and then come back and generate the original signal again. Telephony signals were something that was very easy to do for them in those days. So they were turning lasers on and off, but not trying to modulate them in a linear fashion.
PORTER: At this era, at this time in cable engineering you're still at United?
CALLAHAN: Yes, I was still at United. I'm trying to think what timeframe. That would have been probably around '87, '86, '87, somewhere in that timeframe. Something new that was starting in Colorado here was CableLabs, and being a cable operator at the time I was on the technical side of CableLabs. I was actually on the TAC, technical advisory committee steering committee, and was one of three or four people that were picked to actually analyze some competing bids we had from outside consulting companies, Rex, that were looking at this newfangled thing called fiber to see if it would really mean something to cable television, and we had bids from several different companies. I remember after presentations from each of the companies that our sub-committee looked at that and finally decided that we would go with Arthur D. Little and actually have them investigate broadband fiber to see if we could use it in cable systems in any good way.
PORTER: So Little would do a research paper?
CALLAHAN: Right. They would go out and talk to vendors and they would visit some research labs, and they would collect data and they would come back and present to our sub-committee, and our sub-committee would present it to the CableLabs management and say here's something that looks like we really ought to be spending some time on. We think it's really going to have potential impact on our industry. I would guess that was around '87 or '88 that we were doing that.
PORTER: And this was before or about the time that Chiddix would have started his heavier use, or was it even before? I guess about that time he started his heavier use of fiber in Manhattan, in New York?
CALLAHAN: Probably. I think it was contemporary with that, yeah. And I remember that there was a company, Anixter, and John Egan was the chairman of the Anixter cable division, and he had friends back at Bell Labs. This was, I believe about 1988, and he was talking to them and he said if you can turn a laser on and off, isn't there someway you can modulate it in a linear fashion and then we can use it in cable television. So they thought about that and they worked on it. The very early efforts led to Laser Link 1, the Antec Laser Link 1 transmitter and receiver combination, and it was designed for 12 channels. Remember, the early equipment, yes, it transmitted the signals but it had some modulation issues and so forth, but again, it was a groundbreaking product at that time. That was the first start of getting broadband fiber into the system.
PORTER: So Antec has now worked in cooperation with AT&T Labs and AT&T has now come up with a linear laser.
CALLAHAN: Right, right.
PORTER: And now we're off to the races.
PORTER: And this must have been the start of the major rebuild the cable industry underwent that really introduced us to what we today lovingly call HFC networks.
CALLAHAN: Right, hybrid fiber coax networks, exactly, and the thing that intrigued me right away when I saw the first demonstration of 12 channels over a very long length of fiber, I said, wow, now we can do away with the bridge painting technique of balancing long trunk lines, cascades of 20 to 25, some people even pushed them, as you know, in the old days out to 40 and 50 amplifiers, but you would tweak each amplifier and measure levels and set the tilt and the gain and everything all the way down to the end. By the time you got to the 20th or 25th amplifier it was time to come back and start at the beginning, hence the name bridge painting. We said, well, gee whiz, now we can transmit signals from the headend all the way out to a distant point optically and have nothing in between there. There's no sources of distortion or anything like that because now we have a linear laser and maybe it was only 12 channels initially, and barely 12 channels, but...
PORTER: Better than that one channel LED, right?
CALLAHAN: It was better than the one channel LED, exactly. And it only took ten years to get there, or twelve years to get there, Rex. The notion was that now we could have transparent signals, pun intended, because we were transmitting them down transparent fiber cable and we would take an entire group of, let's say that the signals went from say 50 to 550 megahertz or the entire bandwidth of the system, whatever it happened to be, we could take that and here's a laser now that we have optimized for linear transmission, which means that hopefully it doesn't add any distortion of its own, which is not entirely true, but you know...
PORTER: Pretty close.
CALLAHAN: Pretty close to it for all intents and purposes. We could take that entire band of RF signal and apply it to the laser and actually modulate it around its linear point. At the distant end we would have an optical diode that would receive that and take the entire group of RF signals and bring it back into the electrical domain again, RF domain. There was no maintenance assuming you didn't have a backhoe cut in the fiber, but there was no maintenance, there was no intervening devices, and you were like whew! What a relief that now we... and almost in essence you can think of it as you've got another headend out in the field because the signals are so well carried out there that whatever the quality was back at point A is the same quality at point B, and so now you have a lot of point Bs all around the service area and from that point, if it was an RF signal you would put it back on, what were they called, bridging? It was an optical to electrical converter and then a high-level distribution amp, I guess is the best way to describe it. And then you would go off and have a feeder cable where the subscriber tapped, so that was still a coax system at that point, but again, you had a very limited number of amplifiers and cascade, so they didn't add an awful lot of distortion to the signal. Subscribers would say right away, gee, Ed, you must have done something to the signal.
PORTER: Especially the farthest down the line.
CALLAHAN: Exactly, exactly. They would say the signals look so good, what did you do? And I would say it's thanks to fiber optics.
PORTER: You should have told them I just moved the headend closer to your house.
CALLAHAN: Yeah, that's right. We built a headend just for you, Rex. It's right down the street. By the way, here's the power bill. But the other thing was that you didn't have to standby power that whole length of fiber because there were no active devices in it, only the transmitter and the receiver. So it just cleaned everything up considerably. So the thing is that now we had the fiber in the trunk line replacing the coax trunk, and then the coax distribution system, hence the name hybrid fiber coax system.
PORTER: And now you get to the point that... you probably always thought I came from the pure computer industry to this silly cable industry, and now you're at the point in time where the computer really means something to the cable operator. It's a chance to make money. So that must have made you feel awful good.
PORTER: You didn't waste all that time!
CALLAHAN: It was a long learning process wasn't it?
PORTER: It wasn't yours, it was theirs.
CALLAHAN: It made the whole idea of not only carrying entertainment signals in the analog fashion, but now we had, of course, all the signals being delivered digitally from satellite and we could carry many, many more channels within the same six megahertz and carry them in a compressed digital format to a set top decoder in the home. But with the advent of fiber and having the very clean signals, it made life very much easier. Now you still had a bit of a problem with the reverse path being an antenna picking up signals, but it was much more localized. You didn't have the entire north side of Denver, as an example, all of that being an antenna funneling all that noise back in. You had a fiber node serving anywhere from a few hundred to a few thousand subscribers and that became much more manageable of a situation.
PORTER: Now was United... had United at this point that we're talking, now at this point in time...
CALLAHAN: The late '80s.
PORTER: Yeah, had they not decided to move more in the international market and sell their systems or give their system over to United Artists prior to TCI?
CALLAHAN: Well, let's see. That merger was in '89 with United Artists.
PORTER: And then United Artists stayed around, but Gene decided that United itself would become more of an international concept, wasn't it about that time?
CALLAHAN: Right, it was in 1989, that's right. It was in June of '89 that the merger between United and United Artists happened, and after that then, Gene went and started United, I think it was United International at that time, the UIH, United International Holdings, and that was a time that he was really going international.
PORTER: Now at that point, did you leave and go out independently doing engineering consulting work?
CALLAHAN: Yes, I did. In '89, June of '89 I actually opened up Callahan & Associates consulting company and did consulting for a couple of years prior to joining Antec in 1991. One of my first customers was a company in Canada and they were making equipment that would go in the home or in the business, and it would provide telephony signals in the home or in the SOHO, the small office/home office concept.
PORTER: Northgate? What was it?
CALLAHAN: No, it was...
PORTER: I just remember we had a meeting one time.
CALLAHAN: West End Systems.
PORTER: West End Systems, that's it.
CALLAHAN: West End Systems, right.
PORTER: The idea was that the parent company that they were part of had already developed all kinds of interfaces for telephony, but more in the commercial area and now they were trying through West End Systems they were trying to get into the residential market. So my job was to take them around to all the cable companies, the Time Warners and Cox and on and on and introduce them at the highest engineering levels and talk about what the product concept was and whether this was something that they would be looking at as a potential new source of revenue. So I did that from '89 to '91, and then John Egan approached me and asked me if I would consider taking over technology for Antec, and so I said, sure, I'd certainly like to try that. So now I'm in the company that helped, along with Jim Chiddix, linearize the laser back in the late '80s.
PORTER: But your work proposed at Antec would be more toward the telephony side? Their entry into telephony?
CALLAHAN: No. No, I jumped back again. After the Canadian company... unfortunately the product was very high-end, and it was built like the proverbial tank, and it was designed for commercial, failsafe, all that kind of situation, so I'm afraid it was too much of a premium product to play in the cable marketplace for the residential, broadly penetrated service. So that company never actually made it into the cable area. And so when I went to Antec they were heavily into the Laser Link 1. It was even delivering very good pictures at that point, and we're going onto Laser Link 2, which was a much wider bandwidth system.
PORTER: Had they already started into the telephony, their cornerstone product?
CALLAHAN: No, not at that time.
PORTER: I thought maybe they brought you on. Once again, Ed is at the forefront of the cable telephony side now and they brought you on because of that, but that's not so.
CALLAHAN: It was probably around '92, end of '92, and of course I was visiting AT&T Bell Labs all the time, and taking cable operators back and showing them the next advance in linearization of laser. Every time we could linearize it, we could increase the amount of load, load being the number of channels both analog and digital that were applying to the laser. When we would do that we would say, well, what else is going on back here? So the notion developed at one point about doing a cable television based telephone system. That led to the CLC 500, the Cable Loop Carrier 500.
PORTER: Is that an Antec product?
CALLAHAN: That was Antec and a joint product with AT&T Bell Labs, and the first customer for that was going to be TeleWest in the UK, and it was a very, very interesting time for me because we were working with many different vendors, vendors of making modem chips, making modulators, demodulators, all the telephony interfaces, worrying about what the standards were, now you're in the UK, the UK has different telephony standards then the US does, so you had to make sure it would meet those requirements.
PORTER: And were you still with CableLabs, sitting on their committee at that time?
CALLAHAN: No, not at that time because being now a vendor I couldn't be part because you have to be a cable operator to belong to CableLabs. Now the professions that were open to vendors, I was always there and participated in those sessions.
PORTER: So how long did you stay with Antec on this run?
CALLAHAN: This would have been '91 through '95, and so we had telephony, we had wider band lasers, we had broadband taps through the Regal division of Antec, and so again, everything would pull something else along and we would get more capacity, better picture quality, more reliability, all heading towards what would be truly considered a very dependable, reliable broadband two-way system. And then in '95 I decided to go back into the consulting business on my own and I still have my business cards, Callahan & Associates, so I decided to do consulting again for a while.
PORTER: Do you do international as well as, well, anything that pays money.
CALLAHAN: Well, you know how consultants, work, right?
PORTER: Anything that pays money, right.
CALLAHAN: So one of the companies that I was doing some consulting with, and I had known Ron Hranac from our work together at Antec, and Ron had started a company literally in his basement at home here in Denver called High-Speed Access, and the notion was to provide a turnkey, high-speed, two-way modem service for cable operators, and he had two flavors of it. One was for two-way systems that had return amplifiers in place, and another one was a one-way system using a telephone return, and the idea was, well, most of the data coming back from the typical user was keystrokes. You're not talking about file servers out of the user location because that's not the intent, but the market was the second and third tier cable operators that a) perhaps weren't comfortable with the technical notion of data. Yes, they wanted to make more money but they weren't really comfortable with doing it themselves. The idea was that we at HSA, High-Speed Access, would go in and design the system, provide the headend equipment and provide the link back to the internet and actually run the system, have a call center, a help center, do all of that for a price and then split the revenues with the cable operator.
PORTER: You had a call center here in Denver.
CALLAHAN: Right. And then one in Louisville, Kentucky. It turns out that when Ron was looking for financing, after the initial tests showed that this looked very good, I think he was working with Joe Gans in Pennsylvania, and they needed financing. Well, one of the companies he went to had invested in a company in Louisville, Kentucky doing similar things, and they said, sure, Ron, we'll fund HSA but we're going to put you together with this company in Louisville, and then the surviving company will be called High-Speed Access Corp, and we had two headquarters. We had one in Louisville, Kentucky, and then one here in Denver. About that time we had moved out of Ron's house and we were big-time and we actually moved into an office building.
PORTER: I just interviewed Ron Hranac yesterday, so he was a counterpart, one of the people that worked with you. And now HSA, HSAC, has sort of been bought and folded into Charter Communications, as I understand.
CALLAHAN: Right. Charter bought the operations that were in Charter systems. They bought that from HSA, and so HSA at this point, I think, I'm not sure exactly what's happening.
PORTER: We always have the idea that whatever is happening in cable is what's going to be happening in the next ten or twelve years, and we're rudely awakened as we move along. We're real happy with saying, well, we have HFC systems now, and we have lots of good digital, and analog signals, and we have high-speed cable modem service, and we have telephony. What do you think, Ed, that's not out there that's going to be out there? Any ideas that... you've seen so many of these things happen. Is there something that sticks in your mind that you know we just haven't done that? Anything with video streaming? I know we've had companies like Malone's that's talked about maybe putting servers not in the headend but moving them out within the nodes and then people can just pick whatever service they want at that particular time without having to transmit it all over the cable system, they'll pick it up fairly local to their home. And that seems to be a rather novel idea. I've always, for the last few months, wondered why we have to get programming over satellite since we have such beautiful abilities at transmitting things by video streaming. It's kind of inconceivable that people in New York or people in Los Angeles, or wherever the signals come from, aren't thinking about we've got too many middle men between the programming itself... I can kind of foresee cable systems with major multiple servers in their knots or their headend and actually receiving programming by video streaming, a week's worth, don't download it, don't ever have to worry about the satellite as a problem, or we have weather problems. Just video stream it from some central location. Now I can see the MSOs going in and negotiating their own rates directly with Hollywood or directly with United Artists. How far out of... is it a...
CALLAHAN: I think it's certainly in the realm of possibility and that's more things under your control, as you say, although there is going to be somewhat of a middle man.
PORTER: Well, there's always going to be a middle man.
CALLAHAN: Of some sort, on the fiber backbone, transcontinental fiber from Hollywood to New York or something like that, but that's certainly in the realm of possibility, and as you say, you can get the programming stored in distributed locations around the system so all the demand isn't going back to the headend, it's going back to the local server.
PORTER: Well, if we'd have talked in '70 instead of now in 2002, and somebody said, well, you have to get programming, distant programming has to come through microwave and somebody said, well, not always, you would have said heresy. Of course we have to get it by microwave. Well, you know, we've just fallen to the idea that you have to get stuff by satellite. You just don't have to get it by satellite. We've got such intriguing data possibilities and video streaming, I think it's a wonderful technology. I just think that it's going to change the face of how we do things in our networks. I don't even call them cable systems anymore because I think we departed from that.
CALLAHAN: Telecommunications networks?
PORTER: Yeah, and I just think we're going to see wild and wonderful things over the next ten, maybe fifteen, but I foresee the day when we take all of those drop cables out of the home, and take down all those feeders. I think it's going to be chaotic, but at some point we're just going to go fiber to the television set. Technology doesn't stand still. We're going to do that. We may not see it, but it's coming.
CALLAHAN: Well, probably the next step would be certainly fiber to the neighborhood. The neighborhood's getting smaller and smaller.
PORTER: Maybe fiber to the curb.
CALLAHAN: Fiber to the curb. And coax still is a very effective means of distributing the signal within a building whether it be a home or another type of smaller building, but it's very easy to tap into within the home and make connections and so forth, but the technology is there to do it all with fiber and then you start talking about dense wave division multiplexing and you push it way out into the future. There's Rex's wavelength, here's Ed's wavelength, and here's somebody else's wavelength over there, and you have a wavelength all the way back to where the server is storing all the programming that you're looking for.
PORTER: Well, I guess to end this, we have to come to an end sooner or later, I guess to end this wonderful interview, I guess what I'd say to you, Ed, is I hope that we always have people that will come from other industries and from other side technologies and be willing to help the broadband industry with these new ideas like you've done for the last few decades. I won't say how many, we don't like to talk like that.
CALLAHAN: Oh, it's been a very, very interesting career. As you know, I retired, or semi-retired. How do you ever retire from a fun business like cable? But I've really enjoyed the whole time and seeing the developments come along. I remember the early discussions talking about cars and lanes on a freeway and from all up until where we're at today, and talking about eventually having fiber right into the TV set.
PORTER: Well, thanks for all that you've done for us in the industry, and thanks for joining us today at The Cable Center, and I hope your next 50 years of innovation is as happy as the previous has been.
CALLAHAN: Great. Thanks very much, Rex.
PORTER: Thank you.
CALLAHAN: I enjoyed it.