Interview Date: October 28, 1998
Interview Location: Athens, GA USA
Interviewer: Jim Keller
Collection: Hauser Collection
KELLER: This is a continuation of the oral history of Thomas C. Dowden. The original history was recorded on July 19th, 1990 at Penn State University by Stratford Smith, then the director of the oral history program. Tom Dowden, as the dedication plaque to this center indicates, is a cable pioneer, a proponent of excellence in telecommunications, a dedicated public servant and a loyal alumnus of The Grady College here at the University of Georgia. We are recording at the Dowden Center for New Media Studies at the University of Georgia and today is October 28th, 1998. Your interviewer is Jim Keller, special consultant to the program. This is one of a series of oral histories and video histories in the Gustave Hauser audio/video history program of the audio/video program of The Cable Television Center & Museum. Good morning Tom.
DOWDEN: Good morning Jim.
KELLER: As you concluded your first interview with E. Stratford Smith of Penn State University, you had just joined Cox Cable Communications from a job with the CBS affiliate in Houston, KHOU-TV. You had met Leonard Reinsch and he enticed you into getting into cable television. There are two questions involved as I see it right now. Number 1) Why did a very conservative company such as Cox Newspapers and Cox Broadcasting want to get into a new and very speculative business enterprise as cable television back in the early '60's; and Number 2) why would you, who had a bright future in broadcasting, want to take the chance?
DOWDEN: To understand the answer to that Jim, I think you have to delve into a little bit of the history or the background of J. Leonard Reinsch. Leonard, who is now deceased, was one of the great pioneer broadcasters, and I believe is a person who helped move the cable television industry forward, from that vantage point, from a broadcaster's standpoint, in the mid '60s through the '70s. Leonard was very far thinking in terms of telecommunications. He didn't think that over-the-air television was the final medium in the telecommunications area. He thought the wired form of transmission of television signals, data and so on, was probably the wave of the future and he wanted Cox positioned in that field. And he did it in steps. The first step was to acquire some small cable systems in Oregon and Pennsylvania and with that he acquired management, who had been in the business since its inception - like Lou Davenport in the Pacific Northwest, Bill Vogle in Pennsylvania. So I think Leonard saw this and had this vision of getting into this new telecommunications medium. Now he was pretty much alone, as I recall, in this direction in the '60s among the executives at Cox.
KELLER: And among broadcasters?
DOWDEN: And among broadcasters overall. There were only a couple of three other broadcasters who had done that. One that stands out is Wrede Petersmeyer at Corinthian. But he went in and got out and he became a very, what I used to call, a "status quo" broadcaster again. But Leonard was always out on the cutting edge of new technologies.
KELLER: Had Leonard been exposed to cable television from an outside source before they first got involved?
DOWDEN: You know, I don't know how he got this bug. I sometimes think that he got it from someone like Sol Taishoff, who was publisher of Broadcasting magazine, but who was also a close friend of Leonard's. I remember that Leonard used to have Sol as a guest or speaker to our executive groups and Sol always had a grand overview of communications. And while he pretty much was a "status quo" person himself, Broadcasting magazine touted the conservative broadcaster line - he also was pretty far-thinking and he was a close friend of Leonard's. I often wondered if they sort of figured out the future of cable. That was the next wave of growth in the industry. But nevertheless, Leonard did not get that much support as I remember, internally. Of course he was the boss. He was going to get the support but it was sort of reluctant, it always seemed to me. The broadcasters, the station managers, the head of the broadcast group at Cox and all of the Cox executives sort of looked at us in cable as the redheaded stepchild. We even had a small building behind White Columns in Atlanta that was an old engineering building. And so that was that group back there that was involved with this Cable TV. It was always that feeling. But Leonard was back in that building a lot. And he was very interested in where this was going. And then of course, after the late '60s, when the FCC instituted the freeze on cable, only to free it up somewhat in '72, things started happening. It was during that period that Leonard had positioned the company in such a way with major market partners in certain markets in Ohio and so on, that he was ready to go forward with campaigns to win major cable television franchises.
KELLER: Explain the "freeze".
DOWDEN: The best I remember, the FCC put a halt to all carriage of television stations in about 1968. It virtually froze any new construction, any new carriage of television signals on new cable systems being built, and when they unfroze it in 1972, which I think was the Second Report and Order, that gave us our scheme of what we could carry. If you remember the "three one and one" – 3 network, 1 ETV and 1 Independent. Which were very, very minor concessions as you know. But during the '68 to '72 period, there was virtually nothing going on in the cable industry. There may have been a few classical type cable systems that were being built, but the FCC would not approve during that period such things as microwave licenses or any sort of technical approvals for cable TV. Now that led to a situation in our company at least, where we thought this may be the end of our career in cable television. But to their credit at Cox Broadcasting, the parent company, they allowed some of us to look at other areas of the company, broadcasting, publishing and so on, but not a single one of us deserted. And we stayed there during that "freeze" period and when we came out the other end, we were ready to make our mark in the major markets.
KELLER: You were receiving a certain amount of revenue from the smaller systems in Pennsylvania and Washington. So you did have a stream of cash flow?
DOWDEN: That's right.
KELLER: Were you consolidated then with the overall Cox balance sheet?
DOWDEN: Yes. We were consolidated with the parent company because the company had spun off a separate Cox Cable stock issue prior to the freeze. The stock issue at that time was called Cox Cable Communications, traded on NASDAQ as I recall, but I do not recall the stock symbol.
KELLER: Was it a minority interest?
DOWDEN: Yes, it was a minority interest. Cox Broadcasting owned 80% and the public owned 20%.
KELLER: But prior to the freeze, you had obtained a number of franchises in major markets. Among them San Diego.
DOWDEN: Before the "freeze" we bought a part ownership of the San Diego system. As I remember it was 16% interest that Cox bought from Hank Goldstein and Lee Druckman, the two principals. And if I remember the number, I don't know why I should remember this number, but Cox paid 150,000 shares of Cox Broadcasting stock at the time for that interest in the San Diego system. I have no idea what that purchase price came to, and I cannot remember what the stock was worth at that point. But that was the first step on behalf of Cox in a major market. And then later, of course, they acquired the remaining amount. But there wasn't very much franchise activity going on during that period. That was really because the FCC "freeze" had bogged things down during that '68 to '71 period. But, we were positioning ourselves with companies like the Cleveland Plain Dealer, the Toledo Blade, the Sacramento Bee, some of the large broadcasters and newspaper owners in the nation. But, as best as I remember, no major market franchise was actually granted during that period. It was somewhat later than that. I could stand to be corrected on that if somebody checked those projects.
KELLER: Had you received the Lakewood, Ohio franchise?
DOWDEN: Yes, we had received the Lakewood, Ohio franchise, but that was a small community in a major market. We still couldn't import outside TV signals. There was no such thing then as "superstations". We couldn't import any stations. Of course there was no satellite, there was no HBO, no nothing. And so we were trying to figure out how local origination, that is creating our own channels, might add enough appeal to the cable system that people would be encouraged to subscribe. So Lakewood, Ohio was one of the first local origination experiments.
KELLER: You did build the system in Lakewood during the freeze?
DOWDEN: We did build it during that period and I would have to say that that was the late '60s. But again, we were still frozen as far as bringing any outside signals into the market other than those that were already there. So we had to come up with innovative ways to try to appeal to new subscribers and local origination, done well, and we felt that with Cox and the broadcasting background of some of the people involved, they would know how to develop the type of programming that might be interesting to the public.
KELLER: What kind of programming were you doing?
DOWDEN: It was typical local events. We had if I recall, some sports events. We did some remote events of local high school sports. We did shows that were put on and produced by local people. There was a full range of those kind of shows. Enough to fill up several hours a day of local origination. And, as I mentioned to you before, Greg Liptak of Jones Intercable, got his start in this industry in Lakewood, Ohio working with Cox. He was working out of a television station, a small market television station in Decatur, Illinois as I recall. I learned about Greg through an associate at the University of Georgia who went to the University of Illinois Graduate School with Greg. I felt Greg would be a good candidate because he was operating a small town television station and they had to put on that kind of programming to survive. I don't think it was even a network affiliated station. So he did that with the closed circuit cable as he was doing in a smaller market for over the air broadcasting. To the extent that our Lakewood system was successful, a lot of the credit goes to Greg Liptak.
KELLER: Was it successful?
DOWDEN: I wouldn't say that it was successful in terms of gaining the subscription that we wanted, the 40 or 50% penetration of the market. But I think it gave us a lot of experience in local origination at that time which later became a viable part of most of the major market cable systems. And I would say that while it didn't bring that Lakewood system to a positive cash flow position, it was good experience. So I'd have to say overall, it was successful.
KELLER: When did it reach a positive cash flow position?
DOWDEN: Well I can't say that I remember. In fact I can't recall whether Lakewood suddenly became part of the bigger Cleveland area CATV system which I believe happened. So I don't think it was singled out ongoing as Lakewood.
KELLER: Did Cox own a piece of the Cleveland system?
DOWDEN: Yes, with the Cleveland Plain Dealer.
KELLER: And of course HBO came on probably in '73 or '74.
DOWDEN: I think it was '75. Mid '70s as I recall, and that of course catapulted all of the systems that were marginal and that were not getting the penetration. That's what moved them on to the next stage.
KELLER: You also mentioned in your earlier session that you were intimately involved in franchising with Cox. Can you tell us some of the markets that you were involved in and some of the stories about the process?
DOWDEN: Right. Well that was my major role at Cox, and I was sort of the franchise point man. I guess if I had an expertise, it was the ability to go into a market and put together a group of local investors. Generally we had a format or a style that we would use and that was essentially that we would go to the local radio, television or newspaper owner in the market to learn if they were interested. It worked pretty well. Cox had a good reputation in that area and of course most of them knew Cox. And so a representative from Cox Cable was usually welcome. I would take it from there.
KELLER: What did the local broadcasters have to say about it?
DOWDEN: Well, they generally didn't like Cable TV, as I recall. But there was an unusual situation in those days in that the newspaper could go into the cable business, but the broadcasters couldn't in their own markets. So again, back to Leonard Reinsch, he had such strong contacts and had such a stature in the broadcasting industry, a lot of times the broadcaster said, well it's inevitable that cable is coming if Leonard is in it. If it's coming I think we'd rather have a company like Cox that knows something about broadcasting and our problems and/ or the newspaper which is an entity within our community than some outside company. Sometimes that wore pretty well. But as far as the franchising, it was all over the country. I've worked on franchises in Spokane, Washington to Norfolk, Virginia. One of my favorite projects was Spokane. I don't know if you remember a great pioneer in our business named Sam Haddock.
KELLER: Very much so.
DOWDEN: Sam and I worked on the Spokane franchise together. Of course, he had systems in Moscow, Idaho and Pullman, Washington. And Spokane being nearby, he was well connected there, and Sam and his group ended up owning 20% of that franchise as I remember. On the other side of the country, I worked on Norfolk, Virginia Beach, Tidewater area. I must have had 65-70 partners in that project and that was quite a logistical problem, but we were successful there too. And in the middle part of the country, I worked on the Davenport/Moline/Bettendorf/Rock Island franchise. So I was all over the country in those days. As you remember those days of franchising, you had to be everywhere at the same time it seemed like.
KELLER: I was your counterpart at ATC, so I remember that very well.
KELLER: Often times we were faulted by various people in the media, specifically broadcasters and in some cases newspapers, about having "bought" franchises in these markets. Do you know anything about that or did you ever experience anything like that?
DOWDEN: No, one of the things that I was always impressed with is that Cox had a tremendous reputation, as I believe most companies in our industry did, and I got to see all of them on the franchise trail. We had maybe an aberration once in awhile of a company that might have gotten into trouble. I think TelePrompTer may have been one of those early on some franchising issues, but that was blown out of proportion. As far as I could tell, working from my perspective, there was pretty clean competition. You would go in and you'd have your local partners who would be advocates for your side, and the city council would make their decision. The only thing that got out of hand, I believe, in the early to mid '70s was that promises made by companies to franchising authorities seemed to escalate and escalate. And it seems to me that that got carried away, where one company would say we'll give you five percent of gross revenues and the next company would up the stakes and say we'll do seven percent. And that got a little bit out of hand in the frenzy of the franchising business in the '70s and early '80s as I remember. But as far as anything that went on behind the scenes or any kind of payoff or bribery or any kind of wrong doing in that area, I never saw any of that in my whole career with Cox.
KELLER: I agree with you. I worked more than 50 markets and I never knew of anything that had occurred. Incidental to that, there was an organization sponsored by the Urban League in Washington D.C. called the Cable Television Information Center. Tell us a little bit about that and what impact, if any, it had on the franchising process.
DOWDEN: CTIC, that's an acronym from way back in my memory. Again, they seemed to be there. They were funded by the Urban League and they were always at these large city franchise meetings. It seemed they were somewhat like the National Education Association (the NEA). They were always a thorn in cable's side in the early days. They wanted education to have 20% of the channels. And CTIC, I think they were somewhat along the same lines. I don't remember specifically, of any franchise project that I was involved in that they were given very much credence. I'm sure that there were some where they influenced the council or the request for proposal process that may have delayed it, may have been an example of where the company had to give more channels or more promises of local origination or whatever than they should have or probably it was feasible to do, because that group was there. I don't think that they were very effective or that they were very welcome at any of these franchise hearings that I participated in.
KELLER: After your success in achieving franchises in a number of major markets including Newport and Norfolk, Virginia and other places around the country. What did you do after the mid '70s when the franchising kind of came to a halt?
DOWDEN: Well, of course, they continued on, the large companies, Cox and others. I was able to take the expertise that I had developed in terms of franchising and do that for my company that I formed in the mid 1970s. Specifically I took some expertise that I had developed in terms of running elections in the state of Iowa. I had one election for Cox in the state of Iowa, and we had lost it quite badly in the early 1970's as I remember. But I saw the change taking place where the people were starting to see through this business of vote against cable because that's pay TV.
KELLER: Iowa was a pristine market, specifically for that reason.
DOWDEN: That's right. It was the only state that had a statewide requirement where cable had to go to a referendum. And you had to have 50% plus one vote to pass a cable referendum. So I hit upon the idea of doing that in some smaller, middle-sized markets in Iowa. And during the late '70s, I was successful in maybe a half dozen markets. With me as a partner was Heritage Communications and some other local people.
KELLER: Was Heritage a local company?
DOWDEN: Heritage was a local company in Des Moines founded by Jim Houk and Jim Cownie. They had had some trouble breaking this referendum barrier also. But Cox became a partner of Heritage in Des Moines and we were eventually successful there. We were successful in some of the smaller markets too. And so I had this vision of perhaps building clusters of markets where there was some efficiency in the technical service and marketing and some other things and it turned out that there were some economies of scale in doing that. So I built up a group of cable systems in the late '70s, and then in 1980 sold them to Heritage. That gave me an opportunity to develop a larger company in the 1980's, which I did.
KELLER: How did you come about leaving Cox? Did the entrepreneurial spirit finally get to you?
DOWDEN: Well, it was a combination of that and Henry Harris and I didn't see eye to eye in certain areas. That had a lot to do with my leaving.
KELLER: Henry Harris being the president of Cox?
DOWDEN: Yes. Henry had some ideas about restructuring some of the early franchise deals that I had put together, which didn't set too well with me. He saw it as something necessary to do and it was his decision, but I saw it as a situation where I had represented people like Sam Haddock in these markets, where one set of circumstances were presented to these partners but Henry decided that something else might be better. We had some clashes and it turned out that I had some Cox stock at the time, some stock options, and it was better for me to just leave at that point, and I frankly wanted to because I wasn't going anywhere. Henry was somewhat younger than me and he was moving slowly up the ladder, and ahead of him was a young man at Cox Broadcasting who was not ready to take Reinsch's place. So no one was going anywhere anytime soon. So I was somewhat in a frozen position and not getting along too well with Henry, so he asked me to leave. It seemed like in the era of 1976 that perhaps that was time for me to try it on my own. And, as I look back on it, I'm certainly happy that all those circumstances came together.
KELLER: I want to get back into that. Let's back up just a little bit. Do you remember, I believe it was in the mid seventies, when there was a proposed merger between Cox Cable and American Television and Communications Corporation. Do you remember anything about that?
DOWDEN: Yes, I remember that it was a nine month project that suddenly had to be aborted because the Justice Department came down on both companies and disallowed it. But for nine months, it looked like we were going to have a Cox/American company, I believe that was going to be the name of it. And you were involved on the ATC side, I remember that, and I was involved somewhat on the Cox side. We had management meetings. It seemed like the thing to do at the time because there was one large company in those days, as you know, and that was TelePrompTer. As I remember, they had 400,000 subscribers and each of us had, I think, 150,000 and had we merged we would have been somewhat "competitive" with TelePrompTer. Well, the Justice Department didn't see it that way, and I never understood the anti-competitive nature of that merger. But it fell apart. I was gone pretty soon after that so I do not remember any Cox history after about fall, 1976.
KELLER: Tell me how you went about obtaining the franchises and then winning elections in the small Iowa communities. How did you sell cable at that time?
DOWDEN: Well, it was like taking a person and running him for mayor. I just pretended I was running for mayor of the town. Only I was selling a concept. Cable television was choice. But I would do everything from hand out flyers at the local Hormel plant in Ft. Dodge to appear before the civic groups in the town. We used advertising, speaking engagements, etc. It was just like a political campaign.
KELLER: You had to get the franchises awarded by the city council which then had to be approved in an election?
DOWDEN: That's right. And many times the city council would say...they would allow you to go forward with the election, without going through the hassle of granting the franchise. Then, you would go forward, pay for the election and if you got the 50% plus vote, you could then go back and it was tantamount to getting approval from the city council.
KELLER: Where was your opposition?
DOWDEN: Opposition in the case of the small Iowa communities was from local over-the-air broadcasters and the antenna manufacturers. They would run ads and they would send out handbills, and all that saying don't vote for pay TV. And it was a very difficult point to get over to the public that it wasn't pay TV, that it was choice. They did not have to give up their "free TV". All they are doing is voting to let their neighbor make a choice. If they didn't want cable, they did not have to subscribe. Their regular TV would still be there. But, if they voted yes for cable, they'd at least allow their neighbor to make a choice of whether or not to subscribe. And that was a fairly effective argument.
KELLER: Do you remember the old ads from the antenna manufacturers about cable sucking the signal from your antenna?
DOWDEN: Exactly. I do remember that. But it turned out that the antenna people and the set and sales people, they survived very well, in fact probably better because once people got cable, they bought more sets and they viewed television more, not less, particularly in these under-served markets.
KELLER: Again, what goes around comes around, because in the very early days of cable television it was the appliance dealers who wanted to sell television sets and got the industry started. Interesting irony. After you developed these small systems in Iowa, did you eventually sell them to Heritage?
DOWDEN: The first group I sold to Heritage.
KELLER: And then what happened after that?
DOWDEN: I restructured with a group of venture capital companies. Narragansett Capital was one of them. Venture Capital Fund of New England, another. I had a great bank named Industrial National Bank of Providence, which is now Fleet Bank. Greg Barber, who was the lender at that time, knew a lot about cable and new start-ups and was very aggressive in his lending. He believed in the industry. And he made my first loan so I could build my systems out in Iowa. Then, that just mushroomed and by the mid '80s I had built up a company of about 50,000 subscribers. This was after I sold my first systems to Heritage.
KELLER: Which at that time was a relatively large company.
DOWDEN: I think we were like 70th if you can believe that looking at the size of the companies today. Anyway, we had restructured at that point with a company out of Boston named Barriston Associates and Centennial Fund out of Denver was a partner of mine. I had bought out all of the venture capital funds, Norwest Venture, Fleet Venture, Noro-Moseley in Atlanta, several others and Narragansett in 1986. I had taken them out by that time, but Centennial stayed with me and we restructured in 1986 and built the company up over the next year to somewhat over 50,000 subscribers. It was just the frenzy of the time that helped me be successful. You will remember the mid, late '80s when everyone was consolidating and buying everything to build their numbers and the prices went up, up and up. And in 1988 Triax Communications out of Denver who was operating in the mid west where most of our systems were located, made an offer that I couldn't refuse.
KELLER: Jim DeSorrento?
DOWDEN: That was Jim DeSorrento. And Jay Busch. And they're still operating. They're operating our old systems and doing a good job I'm sure. But they were aggressive and wanted to purchase our subscribers. My partners and I decided that was the thing to do and I must say the timing was excellent for me and for them because within six months or so after we sold the smaller markets that we had, I think they must have been depressed by 30 or 40% in terms of value.
KELLER: The entire industry was devalued in the late '80s and early '90s.
DOWDEN: Right. I held onto some systems and I kept my staff in place in Atlanta, because I wanted to do the same thing again. I was of an age I still wanted to stay in the business and keep building. But they offered us such a fantastic deal in 1988 that we almost had to sell and I did.
KELLER: What was interesting in that '89, '90, early '91 period when not only the economy was very depressed, but there was a threat of re-regulation and rate regulation by the FCC and a number of bills had been introduced at that point. But frankly, people were pretty scared about the industry.
DOWDEN: That's right. In the financial community the equity market had dried up for smaller entrepreneurs and I guess it filtered up but it dried up fairly quickly for us smaller operators. Being out of the business at that time, other than just on the fringes of system ownership, I can see, looking back, that it was quite a transition that happened in the late '80s, early '90s. And the whole thing moved toward the consolidation of properties.
KELLER: It gave an impetus to consolidation because the major companies were able to buy out a lot of limited partners at a relatively low price. And that's caused an awful lot of class action lawsuits. At that point the industry had taken a substantial decline. You were right, about 30 to 35%.
DOWDEN: I think that's right.
KELLER: Then what did you do?
DOWDEN: Well, after that I just kept the company going as best I could and those systems that we maintained I sold in the early '90s and kept some which I still have.
KELLER: Which ones?
DOWDEN: I have some small systems, a thousand or so subscribers in northern Illinois and southern Wisconsin. And a long time friend of mine and an excellent manager, Curt Melcher, manages those for me and he manages other systems too. And they're pretty much self sufficient. They're a very good investment, nice to have my hand still in the cable market and I get to talk to Curt from time to time about budgets and about new services and rate increases and so I get to keep a little bit in touch with the cable industry that way. But primarily I went on and did some other investments in real estate and cellular, and I must say I did take my cable expertise to Great Britain where I was successful in a venture over there.
KELLER: Tell us about that.
DOWDEN: I put together a group in Wales in Newport, a small community on the eastern side of Wales near Cardiff.
KELLER: How did you get involved?
DOWDEN: I met some prominent people in London. I travel over to England quite a bit for golf and other things and I happened to meet these gentlemen that were interested in getting a franchise from the British telecommunications agency for this area of Newport. The telecommunications agency was keen, as they say, on granting franchises during that period of the early '90s. And so we were able to acquire an 80,000 home market in that area in Wales. And that found its way into a larger company—Sid Knafel and his company, International Cable, now called NTLI. They've merged two or three times, but it's a public company, listed on NASDAQ. But the partnership was successful in going forward with the telecommunications agency there in London, which granted the franchise to our combined company. Later we folded it into Sid's company. He later put it into a larger company and the shareholders got some public stock. So that was quite interesting.
KELLER: But you had expertise?
DOWDEN: That's right. And it was following the same lines as in this country as far as the channels. It was like the early days of cable as we remember in the '60s and '70s. The only difference is you dealt with a national telecommunications agency and there was no local involvement to speak of, no local approvals needed. It was mainly on the federal level. What we call the federal level. And so that was successful, and then I've done a couple of things in the cellular business in terms of licenses with my friends at the Centennial Fund in Denver. And that's been a lot of fun.
KELLER: Have you actually been building and operating cellular systems?
DOWDEN: Actually, we acquired the licenses for small communities throughout the Midwest. Essentially, we filed for the licenses to build cellular systems in these small communities. We were prepared to perform, Centennial Telecommunications and its investors. But, a larger company, Nextel, came to us with an offer to fold it in with their nationwide network. And so that's what we did. They are the owners of these licenses now and are performing on them.
KELLER: Did you ever envision a day when you would be involved in an entirely new industry and become an entrepreneur in that industry and help develop it?
DOWDEN: Well, I can't say in the early days that I envisioned myself going out and building a cable company as I did. All of that happened, some of it my doing, some of it was just happenstance. Some of it was timing. In the '70s and early '80s obviously with the beginning of this industry, the small entrepreneurs could do that. I don't believe there's much opportunity in this particular industry today for that, so again, it's timing. I guess I've always had an itch to be an entrepreneur as evidenced by I'm getting in an altogether new business now which I know very little about. That business is real estate development. But it's a challenge and I think I saw that in the mid '70s, and I've seen it through the '80s, in the things that I've done and somewhat into the '90s. But I just find it exhilarating to build something, whether it's a franchise or take a piece of property or whatever and build something. I find that very challenging and that's what I've enjoyed doing. I didn't have any specific plans to do that early on, I guess. I pictured myself after graduating from the university here and the experience I had in the broadcast industry probably to be a director or producer or general manager of a TV station. I thought that would be quite a nice thing to do. I could have taken that direction I guess with Cox but I took the cable TV direction instead and that led to all these other things, including my ability to have some financial freedom of my own in these other ventures.
KELLER: Was that a conscious decision that you made to go with cable rather than broadcasting?
DOWDEN: Well, actually back to Leonard Reinsch. He convinced me that I should go into cable when I had an interview with him in 1964. I had known Leonard and his family prior to that and I had actually gone by White Columns one day just to speak to him. And he said "You know, we're doing some things in this cable TV you really should look into it. I know you're with Corinthian Broadcasting down in Houston, but they are a very "status quo" company. But we're doing all these exciting things in new technology. And I was a 27, 28 year-old, newly married, wanting to get back to Atlanta from Houston and all of that, and Leonard's pitch to me was very appealing. So he offered me a job to come into the cable television division, working under Mark Bartlett, John Campbell and those folks. And the rest just unfolded then.
KELLER: Tell me about your activity involved in the politics of cable television over the years. Not specifically the details that you went into in your earlier session, but how you got involved in it and what are some of the things that you received from your experience in Washington?
DOWDEN: During this freeze period that we talked about in '68, two or three companies including your company, ATC, provided people to work in Washington. During the "freeze" the whole battle cry became "free cable". The idea was to lobby the House or Senate telecommunications sub-committees and the commerce committee to have hearings and set up some rules and guidelines for cable's development. And so there were several of us that went to Washington on a regular basis to perform this lobbying. In fact, I remember in 1969, I spent every other week in Washington, working with NCTA, with Bruce Lovett whom you will remember was the general counsel then. We worked tirelessly with communities, with mayors, with groups to bring people in to testify before the sub-committee hearings. We worked with groups to tout the advantages of cable like the education groups and so on. So we had an agenda dictated somewhat by the NCTA board, and the folks at the NCTA at the time. But there were three or four of us that seemed to put the most time in. One of them was your man from Missouri, Tom Leegan, who did an excellent job. TelePrompTer had a fellow from Illinois. Also, we worked with Chuck Walsh who was a cable attorney. Chuck was a very aggressive and competent young man, did a good job. Marty Malarkey was kind of our senior advisor in all of this. In fact, between Chuck and Marty and myself, I think we might be considered sort of the fathers of the political action committee, Cable PAC that was founded in 1969. And that led to some activity in that area to get people more aware of lobbying, of trying to get our points over. I remember one of the people we retained with some of the funds that we raised from the companies was Gene Keogh of New York, who was a former Congressman. And we went to New York to interview him, and he worked with us during that period of '69. We also had a reception at our 1969 San Francisco convention, which I believe was the first PAC reception that the cable industry sponsored. And we had a good turnout of some of the congressmen and some of the people who were attending the convention. I remember Torby McDonald from Massachusetts Chairman of the House communications sub-committee, and others being there.
KELLER: I remember very well.
DOWDEN: And we had that affair at the Fairmont or the Mark Hopkins, didn't we? But that was successful, and that was in June of 1969. I remember that because my third child, my son John, was born the week before and I had to be out there working on this when my son was born.
KELLER: Over the years, obviously you've had some difficulties. Did you ever have any difficulty with the telephone companies as many people in the industry did over the years?
DOWDEN: We had some in the early days in Iowa but I won't say that we had serious problems. This was Northwest Bell, and they were really pretty cooperative with us. Maybe it was because we were in the smaller communities. But I didn't have that kind of relationship in these small communities that I could say that I had a real problem with Bell telephone. I know that there was an element in our industry that did have that but I can't say that I ever encountered any serious problems.
KELLER: Never were offered a lease back arrangement?
DOWDEN: No, but that was talked about in Toledo, and Ohio Bell was involved in that. I think that later led to some kind of lawsuit in Ohio.
KELLER: That's also when the Consent Decree finally came out.
DOWDEN: That's right. But again, by that time Jim, I was fighting my battles in the small communities where if you had a good relationship in the towns and you had good management and you performed on your franchise and did a good job, things worked out pretty smoothly.
KELLER: Your relationship with broadcasters especially when you were with Cox, was probably very good because of the respect the broadcasters had for Leonard and for Cox Broadcasting.
KELLER: How about after you got away from Cox?
DOWDEN: I had a couple of partners who were in the broadcasting business even in my small communities in Minnesota and Iowa. And maybe it was because I had been somewhat schooled in dealing with broadcasters because I had put together several groups of newspaper people, broadcasters. But then that formula worked well for me too, and I continued to pursue that. And they were quite helpful. They were minority partners, generally, but they were interested in being involved in cable. And I had a couple of newspapers in the small towns, one in La Mars, Iowa, very outstanding newspaper there. The publisher was one of my partners. So I put together groups similar to the type that I put together at Cox, which worked for me.
KELLER: Well tell us, in addition to getting broadcasters and newspapers involved, when you would go into a community, how would you put together a group of local investors. Who would you look for?
DOWDEN: My goodness, there's no standard operating procedure for that. Again, I would look for the people who were the most influential people in town.
KELLER: How would you find them?
DOWDEN: Generally I would have a name of an attorney. Then, one thing leads to another. And I would generally go to an attorney or I would go to the owner of the radio station or to the newspaper. And it just took some digging. And you usually could have this intelligence built up before you went into the town. Or someone would recommend that you should see so and so. They're interested and they're well connected in town. So it really didn't follow any sort of formula. It ranged from where I knew an attorney in a small town in Iowa, retain him, and he would say I have a classmate who's the most prominent man in this other town, and I would contact him. And this just fed on itself. And so when I finished, I had about seven or eight different groups in the small towns which altogether gave me a cluster of cable systems.
KELLER: Earlier on, you mentioned that in the Tidewater area you had as many as 64 local people. How did you get involved with so many of them?
DOWDEN: Well, each group lead to the next group and they kept feeding on the momentum. You'd have one key person in a town - let's say in Virginia Beach. He would say, "Well, we can't get this done unless we have this person." And this person would say "We need these two people because they're very prominent, and they go into new ventures and they would want to be involved." And the next thing you know, you multiply that by four or five markets in the same metropolitan area and you've got a slew of partners.
KELLER: All in one organization?
DOWDEN: Actually they were broken down. We would have Cox Cable of Virginia Beach, Cox Cable of Norfolk and so on. So they were different. All of these franchise
projects were going forward at the same time.
KELLER: Do they ever get in the way?
DOWDEN: Not really. You had one, two, or three key people that you dealt with. And only occasionally would you see all of them at the same time.
KELLER: What would you expect from your local people?
DOWDEN: Mainly to be your advocate at the city level, to say that we were a good company. Here's their performance record. Cox is a New York Stock Exchange company. Cox Cable is a listed company. They own San Diego. And a person who has lived in a community for many years can say that better that an outsider. Someone coming in like myself saying the same thing was not as effective. Essentially, local partners would be an advocate for you and they could be tough on you too. They would say, "We want to make sure you are performing the way you say". You would go through the due diligence to show them that you were going to perform, you had the financial wherewithal, you had the technical know-how and so on. Then, that had to be translated to the city for them to make a decision.
KELLER: Now when you went from Cox to your own organization did you again have to prove that you had the same capabilities?
DOWDEN: Exactly. And that was harder to do, because starting out, I didn't have an engineering staff. I didn't have a marketing staff. I did have the financial commitment from the banks and from my partners in the beginning. But again, back to who you put together, they'd say "Well look, this person was with Cox for 10 or 12 years. He got experience there." And so it really is a credibility question.
KELLER: Did your local partners make a cash investment?
DOWDEN: Yes. They always did. I never gave the local people who were my partners a "free ride" as they called it.
KELLER: Cox did though, didn't they?
DOWDEN: Cox did. Sometimes upward of 20%. Back to the situation with some of the partners, I think I made some 20% carried interest arrangements in markets I worked. Later, they pared that down somewhat, and it caused some hard feelings I think among some of our local partners. But I was gone by then, but I understand that probably that reduction happened.
KELLER: After the founding of the cable PAC, what were your other political activities in Washington, on the national level?
DOWDEN: In 1976, when Jimmy Carter ran for president, I had an opportunity to work on his campaign with his Atlanta advertising firm.
KELLER: You spoke the language.
DOWDEN: I spoke the language. And they knew exactly what I was saying, as long as I didn't get too far north. But Jerry Rafshoon, who was Jimmy Carter's telecommunications advisor in the White House eventually, was his advertising agency man in Atlanta. And it was out of that agency that I conceptualized and ran a cable television project that entailed the cablecast of a 20 minute tape having to do with President Carter's candidacy. If I remember the numbers, we ran that tape over something like 150 cable systems that had the capability for local origination. And in 1976 there weren't that many, but more than you think. In fact, we reached approximately three million homes with that campaign. That was throughout the United States. And I still have a copy of that tape and I'll send it to you. I should put that in the archives somewhere.
KELLER: Wasn't that played at the national convention? I can't remember which one.
DOWDEN: This lead to President Carter agreeing to speak to the cable convention in Las Vegas in 1978. And I worked with Jerry Rafshoon to set that up. And TCI was very helpful in providing the equipment, the uplink from the White House. And so President Carter went on live. This was the first live uplink from the White House, which was beamed to our convention in Las Vegas. And there were some questions on the program. I remember I asked Bill Daniels to ask a question or two. He did. But that was the first example, and I felt like that when you say what political activity, I felt like what we did for Carter in the '76 campaign came back to us in some positive ways later on. Because it was during that era up through 1980 that the cable industry was freed up somewhat from the very heavy regulation that we had had for so many years. And I always felt that there was some sympathy on the part of that Carter Administration for what we had done for it in the 1976 election.
KELLER: Were you ever involved with C-SPAN and Brian Lamb?
DOWDEN: I wasn't involved directly with him. I never sat on his board or anything. I've always been supportive of Brian, in fact when we dedicated the Center, the DOWDEN: Center for Telecommunications Studies, here at the University, Brian was our keynote speaker. So I knew Brian to that extent, and he's a great fellow and has done a great public service to our industry and to the country.
KELLER: I had the opportunity to interview Brian a few weeks ago and it was a delightful experience. I thought CSPAN was something the industry needed in the worst way, although he doesn't consider it to be a public relations venture. He considers it to be a public service venture.
DOWDEN: I've heard him say that. But those are the examples. The Cable PAC, I worked on the CTAM originally. I was on the original board of directors, with Greg Liptak and helped conceptualize CTAM. The uplink at the White House---those type things I consider were my contributions in the '70s to this industry. We worked hard and spent a lot of hours in Washington and elsewhere.
KELLER: After you sold your Iowa systems to Heritage, you said you kept a few of them. Where did you put your efforts after that?
DOWDEN: Well actually, for the next eight years it was building up DOWDEN: Communications. We sold to Heritage in 1981 and that gave me the wherewithal to invest and go on to the next step.
KELLER: Which was?
DOWDEN: Which was DOWDEN: Communications Stage 2 I guess you could call it. So from '81 to '88, through restructuring, through my venture capital partners, and then through selling and the later in '88 selling the entire company. So during the '80s, I put together probably over 100 million dollars of financing, both equity and debt and built this 50,000 subscriber company and sold it. So that was my main effort. I was the day by day chief operating officer and brought the people together. I had an office, my home office was Atlanta. But we did our franchising activity and most of our work in the four state upper Midwestern area.
KELLER: Parenthetically, has the banking interest that you developed in the early stages stayed with you today in your new ventures?
DOWDEN: No, not really. The early banking, cable bankers, were an unusual but unique breed of lenders. They understood the cash flow nature of the cable business, they understood that they didn't have an asset, per se, to look to. They understood that their collateral was only that wire running down the street. And they had to understand the quality of management. Obviously, they understood that they were dealing with somewhat of a monopoly in the sense that there was not usually more than one franchise granted for a 15 or 20 year period. So the banker understood that. He had to understand that if anything happened to the system, he had very little salvageable equipment out there that he could have collateral on. And that's a different type of lender than a lender that's going to help you build a series of condominiums or something like that.
KELLER: How about cellular?
DOWDEN: I think they may be of the same mindset that would be a lender to cellular.
KELLER: You haven't tapped into that?
DOWDEN: I have not, no. Again, we folded our cellular activities into Nextel so I'm not in that. I'm more in the real estate development business now which has opened up a whole new type of lender and opportunities.
KELLER: Tell us how you developed the DOWDEN: Center.
DOWDEN: This was something, Jim, that was close to my heart, being from the University of Georgia and being from the Grady School of Journalism, the Grady College. It used to be the Grady School of Journalism. But the Grady College was where I got my degree, and also I got my Masters here at the University. And I always wanted to give something back and this was my opportunity to do that. So after I sold my company in '88, I arranged with the Dean of the School here, Tom Russell, and with the University Foundation to make a contribution to the school that would fund a telecommunications studies program. And that's led to this Center which is called the DOWDEN: Center for New Media Studies. Dr. Scott Shamp manages and runs this effort for the college. He does a very good job. We're now expanding the Center. We've gotten into a lot of the new Internet disciplines, it's a resource center, a research center, and a teaching center. I'm very proud of the fact that we're graduating a lot of students out of this Center that are going right into the whole discipline of internet, computer, the whole world wide web, the things that are on the cutting edge of telecommunications today.
KELLER: Is this different from what you had originally conceived?
DOWDEN: It's somewhat different. This Lab has evolved from the early telecommunications studies effort. We saw the early effort as more of where people would come together and discuss telecommunications issues, policy issues, and in fact our first conference drew people from all walks of the telecommunications industry, including some cable television people, including Brian Lamb and Jack Cole, the attorney in Washington. In 1990, when we founded this, that was the direction it was going to take. More of a think tank policy center dealing with new media, mainly cable, which was my interest. It's evolved into, with the advent of the Internet and all of the new media, into more of a training lab as you can see from all these work stations and monitors. The students now learn the discipline here under the tutelage of Dr. Scott Shamp and his staff, and then they go out from here when they get their degree from the Grady School, they go out from here to Turner Broadcasting, to Cox, to any of the Internet companies that are springing up, both in Atlanta and nationwide.
And so we're feeding these well educated, very bright computer literate students into the workforce in the South and the Southeast, this lab is also becoming recognized throughout academia in other ways, due to Scott's effort. He travels a lot, he deals with other universities and colleges around the country, and they do a lot of talking about cyberspace together.
KELLER: What degree would be awarded?
DOWDEN: I'm not sure it's a specific Internet or cyberspace degree per se. It is a discipline. They have four different schools here. The radio, television, advertising, newspaper sequence and the public relations. This one would be probably in the broadcast cable discipline with a specialty in this area. But the people who are trained in this, who have that kind of training on their resumes are in high demand. Everyone of them is placed, Scott tells me they're placed in a position before they graduate. So we're proud of that. And we have plans to expand this. One of my goals has been to be competitive with what they're doing at the telecommunications curriculum over at Georgia Tech. They're a big rival of ours. So we're on our way here to being recognized as being one of the top internet disciplines and training centers in the state.
KELLER: It keeps me interested in the point that in the last 30-35 years, we went from selling advertising spots on television in Houston all the way through to cyberspace today, all the way through telecommunications. Would you say it's been an interesting ride?
DOWDEN: It has been an interesting ride and I can't believe it's been 35 years. But the calendar tells me that. But it has been fun. It's an exciting field and anytime I get a chance to talk to the students here, Scott or the Dean asks me over, I try to give them that overview, that broad perspective on how exciting this field is. And there's so many opportunities I feel. And so at any rate it has been a great ride. I hope it goes awhile longer though, Jim.
KELLER: How do you view the three way marriage between telephony, computer and cable distribution systems as we go into the future?
DOWDEN: It sure seems to be coming together doesn't it. I'm not sure that I'm so versed in what is happening.
KELLER: Look into your crystal ball.
DOWDEN: Obviously, with the telephone companies, the lines are blurred now between telephony and cable and two-way transmission and all of that. I was writing speeches for Leonard Reinsch back in the '60s in which he talked about this. And I have copies of those speeches, but a lot of it hasn't come about, as you know. All the "blue sky" that we talked about in the '60s and '70s hasn't come about entirely. I think as you see the consolidation and as the lines are blurred between the big companies, the RBOC's and the big telecommunications companies like TCI and so on, that that whole thing is going to really change the landscape as far as cable television. It's all going to be the telecommunications industry.
KELLER: I think that we recognized that it wasn't going to happen immediately, but we sold it as if it were.
DOWDEN: We sold it as if it were. And it goes back to technology always outstrips the economic side of things. And the acceptance on the part of people. All you have to do is go back and look at radio and then television, then cable television. All of these technologies were really there before they figured out how to sell them, how to market them, and before government acceptance of them really. But technology always outstrips the acceptance. And we've got the technology now but the idea of making it work in the economy, where it is a viable system and the people accept it and you can make money at it. There's the whole key. And until then, you look at Scientific-Atlanta over here, they're out on the forefront of development the new digital set top converters and so on. But there aren't that many, as far as I can tell, there's not that big a market out there right now.
KELLER: Yes, but it has to become so. The interconnection of various technologies has to come through some kind of box.
DOWDEN: That's true. But again we've been talking about that since the '70s. And it hasn't happened universally. Now I know all of the plans are there and all of the infrastructure is being put in place. And I think now, with bringing in different expertise from this telephony area and in the computer area all of that is going to melt together. But as far as the public acceptance of it, the pricing of it and so on, I think there's still a long way to go in that.
KELLER: Let's look at the entire telecommunications industry as divided into two segments. I think you would agree with me on this. There's the distribution segment. And then there is the product that is going to be put through this distribution. The broadcasters I think in the early stages of telecommunications tried to be both. I think they got mixed up in their own mind as to what they were - whether they were a distributor or a programmer. I think that we knew at one point that we were a distributor, then we got mixed up as to whether we were going to be a programmer or distributor. How do you view the people who are in these classes today as where they fit in these two areas?
DOWDEN: I think they see themselves as content providers. I believe they see themselves and in fact they get training here in design and development of web sites and of providing product. Coming up with new ways to use the computer, to use the internet for commerce. So I see most of these people thinking of themselves as content providers as opposed to going out and starting a new hardware company or finding a new use for hardware. But again, like you said, the Turners and all the people that stayed with the content, and provided that, they've done very well. It's those who have stayed with the infrastructure, the hardware, the lines, the cable, whether it's telephone companies or not, that they have a huge capital expenditure. It takes much longer, it seems like to me to get that return.
KELLER: It's long been my contention that the newspaper publishers didn't recognize what business they were in. Whether they were in the news gathering business or the distribution type of business.
DOWDEN: That's right. Well I think so. But some of them that have tried to get over into that area and forget their main discipline, that is providing content, they've gotten burned.
KELLER: Very much so.
DOWDEN: I don't know. Jim, I wish I'd stayed a little more abreast of all of these happenings, but as far as the industry, you see it in Denver probably a little bit better than I.
KELLER: I only see it through the eyes of people I'm interviewing like you.
DOWDEN: My old friend Ted Turner's even moved to New York. I can't even talk to him anymore.
KELLER: Or Montana.
DOWDEN: Or wherever. But at any rate...
KELLER: If you were to summarize your career in telecommunications (and I'm going to use that term now) over the past 35 plus years, how would you do it?
DOWDEN: You touched on it a minute ago. I've seen the whole spectrum really from the early days of when I was a cameraman or boom operator at a TV station studio in Nashville, Tennessee in the 1950's when we were developing small, crudely produced programming which had no style to it at all. And the technology was very rough and very rudimentary. To today, where we're sitting here in this telecommunications lab. But all along the way one thing really stands out. If you do a good job, in these areas, if you provide a good service, if you build a good cable system in this case and you put good management in place that's dedicated to the service end of the business, that you can be very successful at it. I saw other people that have sort of fallen along the wayside because they were packagers of cable systems or product rather than good managers. And that has always made an impression on me and I've tried to pass it on to my son and my family, that if you perform and do a good job, then I think the rewards will be there. If you try to short change it or short cut it, it will catch up with you eventually, whether it's in cable or broadcasting or whatever area.
KELLER: Have any of your family members come into the telecommunications business?
DOWDEN: They haven't per se. My son-in-law was with my company in Atlanta for a couple of years, but he's now with Disney Corporation in Orlando. And my son is a partner of mine in real estate so he is not, and my other child is married and lives in Birmingham and is not interested. She's a graphic designer. So no. I haven't had any that have followed me in the telecommunications business. In fact, I had none who came to the University of Georgia. I get a lot of grief from my friends over here about that.
KELLER: As you develop more and more real estate, as you're doing, are you putting in the infrastructure for communications within those developments?
DOWDEN: Frankly, I'm so new at this, I can't tell you that I've thought that far ahead because we literally have just commenced construction of our first real estate venture in a small town in western North Carolina. But I have mentioned that to my son, who is my day by day management person. That eventually we've got to get the local cable system to bring those lines out here and put in a computer terminal. But I can't even tell you who owns the cable system in our town. We're going to bury cable, I do know that. I don't know if this will be fiber optics. This is a local telephone company that also owns the cable system. So it's going to be an interesting project.
KELLER: So how do you view the future of direct satellite distribution of television in the area?
DOWDEN: I live in western North Carolina as you know. I have a satellite dish. I don't actually need it to get the basic cable service, because I also have cable television. But it's quite prevalent, in the rural areas of western North Carolina. But I don't see that it's much of a threat other than in these rural areas.
KELLER: Why do you say that?
DOWDEN: Again, not being abreast of what the industry's doing overall, I would just have to go with the feeling that there may be, in the area where I live, there may be two other people that have a satellite dish. They rely on the cable primarily.
KELLER: As we wrap this up Tom, give me the names of five people that you consider to be very influential in the development of your career. If you can limit it to five.
DOWDEN: Dr. Worth MacDougall who was the long time chairman of the radio television department here at the University was a big influence on me. He sponsored me for a National Association of Broadcaster summer scholarship, which I won in conjunction with Corinthian Broadcasting when I was a senior here in 1962. And that led me to the CBS station in Houston, Texas. I would say that was the beginning of my career. It allowed me to go back to college with enough money to come back and finish my graduate degree here. I got my undergraduate degree and then my master's degree. So I would say that Worth was very influential. Then I would have to say Leonard Reinsch. I'd have to say Leonard because he took me from Corinthian in Houston to Cox and really gave me the start I needed in the cable television field. Later there were other people along the way at Cox that certainly I owe a great deal to, but Leonard stands out.
Third, when I went out on my own, in the mid '70s, I had some encouragement and some direct support from a long-time friend in Phoenix, Arizona. His name is Ray Smucker and he believed in what I was going to do in this small company in Iowa and he stuck with me there. Then I would say, later on in terms of building my company and going on from there, I would have to say my venture capital people, and Jack Tankershey in particular, from Denver, was a big influence and quite helpful to me in that phase.
KELLER: At Centennial?
DOWDEN: At Centennial Fund. Jack was a wonderful partner. And he encouraged me to build my company and provided financing and so on and that gave me the confidence and the thrust really to go on in the '80s and build a fairly sizeable company. And then after I sold it, I would have to give credit to my wife for putting up with me after I didn't have a company to run anymore, and who kind of went through this transition period with me when I "retired". So, did I name five? But of all of those, I'd have to say my wife, Wendy, has been the most supportive and most encouraging to me.
KELLER: We've been talking about all of your successes in the business. Have you made any mistakes?
DOWDEN: Oh my goodness, have I. I made a lot of mistakes.
KELLER: What do you think was your biggest mistake?
DOWDEN: I think I could have done a better job in the early stages of my career had I focused more on the financial and business aspects of things as opposed to the mechanical aspects of things. So I think I didn't prepare myself as well in the early stages of my career as I could have.
Later on, in terms of running my company, I'm sure that I've made some mistakes with people whom I lost for one reason or another. Although I had very little turnover in my company through the '80s, I only lost two key people as I recall, I'm sure I could have done a better job of managing. But I'm sure that was part of it. But Jim, I could probably send you a letter listing more things that I did wrong than I can think of now. I'm sure I made my share of mistakes though, as everyone does. Anyway, thank you very much for taking the time to come here from Denver. This has been quite an experience for me.
KELLER: It's a delight and I want to thank not only you but the people at the Center for their hospitality in loaning us the student facility and helping us put this together for posterity. Again, it's been a fascinating study in the development of telecommunications and especially cable. We appreciate it very much.
DOWDEN: Thank you so much.
KELLER: This again is a presentation of the Gus Hauser Oral/Video History program of the Cable Television Center. Thanks again.
DOWDEN: Thanks, Jim.