F. Gordon Fuqua
Interview Date: Wednesday November 15, 1989
Interview Location: University Park, PA USA
Interviewer: Robert Allen
Collection: Penn State Collection
Note: Audio Only
ALLEN: Good Afternoon. We are sitting in the office of Stratford Smith at the National Cable Television Center and Museum. The date is Wednesday, the 15th day of November, 1989. I am visiting with F. Gordon Fuqua, who is here to begin the process of recording an oral history for the Museum. I hope you have caught your breath after a rapid trip.
FUQUA: Correct. A little hoarse, but other than that, I'm fine.
ALLEN: You're a little bit busy on a day like today. You're in town for just a very short time, so we'll try to make this time that you're here as productive as possible.
Where we want to start is where you started. Where you were born, something about your mother and dad, and brothers and sisters if there were any‑‑a little bit of how those early years influenced you.
FUQUA: Okay, fine. I was born in Bluefield, West Virginia, October 13, 1926. My parents, I.N. (Isaac Nichols) Fuqua and Pansy Fuqua. He was a graduate of VPI, Virginia Tech in Blacksburg, Virginia, and she was a graduate of Sullins College. He was an electrical engineer who worked for the railroad as an engineer when he came out of college. Later on in life, around the time when I was born, he went into the appliance business and a partnership with a gentleman by the name of Burgess. About ten years later, when I was probably around ten, he purchased Burgess interests and had the General Electric Appliance dealership in Bluefield, West Virginia, up until his death. He was quite a guy. He was an outstanding athlete at Virginia Tech. In fact, in his senior year in college, they had a track meet in Washington D.C. that he participated in, which covered all of the Southeastern Schools. He scored more individual points than any other one school. Virginia Tech won, but he scored more points than the second place school. He was quite an athlete in track and he also played football.
He had four sons, not a doting father but a very concerned father. The only thing that he asked of each one of those four sons somewhere in our high school or college career was that we went out for some sport. He wasn't as interested in whether we made the team. He just wanted us to participate in some team sport. As a consequence, we all participated in everything, some of us better than the other brothers. He was a God-fearing man, superintendent of Sunday School at the church. He was a deacon for many, many years in the Methodist Church. Some of that probably rubs off on the fact that I have a brother who's a Methodist minister in the West Virginia Conference. He's now retired, living in Wheeling, West Virginia.
My mother's still living to the ripe old age of 97 years old. Her mind is very, very alert.
ALLEN: Is she still living in Bluefield?
FUQUA: Yes she is. She's actually in a Methodist rest home. She's not physically in good shape, but she's a mentally sharp old gal. She has an unbelievable memory. I wish I had her memory today. I have three brothers, all still living. My oldest brother was a vice-president with Pennsylvania Power and Light. He lives in Williamsport, Pennsylvania. I have a brother who's a minister in Wheeling, West Virginia, and another brother who took over my father's business in Bluefield, West Virginia. I have no sisters. In fact I have twelve male cousins and one female cousin. There was some male dominance on my mother's side of the family, I guess with the gene process.
ALLEN: Where did you fit in with the four brothers?
FUQUA: I was the youngest.
ALLEN: You were the youngest. Spoiled?
FUQUA: I suppose so. My mother was a very strict disciplinarian, much more so than my father. To my knowledge, my father never whipped one of his sons. He never had to. His voice, if it went up one decibel, was enough to encourage us to do whatever he wanted us to do. My mother was a very strict disciplinarian. She was not reluctant to smack you with a broom or a belt, or a paddle or what have you. She was the heavy in the family for the years when we were growing up.
ALLEN: Were you the kind who required a fair amount of that attention to detail as far as your mother was concerned?
FUQUA: I think, being only one of four, I got about 45 percent of the disciplining.
ALLEN: Is that because you were a little bit more mischievous than the others? Or was it that they just didn't get caught as often?
FUQUA: I think that's probably true. There was almost exactly three years between each one of the brothers so that meant my oldest brother was nine years older than I was. As a consequence, I suppose the evolution of time as we see it today... to raise children today is not like it was to raise children twenty years ago. I guess the time segment had a bearing as well. Usually as adults become older, they become more lenient themselves, a la grandparents as opposed to parents. Anyhow, I got my share of it, and I'm sure I caused more grief than I care to look back on.
ALLEN: Does your mother remind you of this periodically when you're visiting with her?
FUQUA: Only when my children are present. I think she smiles a little bit that she's lived long enough to embarrass me in front of my children on occasion.
ALLEN: Probably grandchildren too, at this point.
FUQUA: That's true.
ALLEN: What was life like in Bluefield, West Virginia, at that time? Where is Bluefield located in West Virginia?
FUQUA: Bluefield is the southernmost city in the state of West Virginia. In fact there is a Bluefield, West Virginia, and a Bluefield, Virginia. It was hard to tell where the demarcation line is. The total population when I was growing up was around 20,000 people. Bluefield, West Virginia, was 15 or 16,000. Bluefield, Virginia, was about 3 or 4,000. My mathematics probably aren't correct there, but it will give you some indication.
It was a little coal town. The closest coal mine was about thirty miles away. A lot of the owners and superintendents and a lot of the people associated in the coal industry lived in Bluefield. At that time, Bluefield was the largest railroad gravity yard in the United States. This meant there was one point in the yard where you could take a coal car, and if you pushed it one way it would roll five miles without any power behind it, and if you pushed it the other way, it went three miles. There was sort of a peak there. They called that a gravity yard. It made it easy for the coal industry to use that as sort of a catch‑all point for loading the coal. So Bluefield was a little thriving metropolis when I was a boy.
ALLEN: The depression of the early thirties didn't have much impact on Bluefield?
FUQUA: It wasn't that bad, no. I would say, Bluefield was fairly close to being immune to that. People still required coal. That didn't mean that the people in the coal business were making that much money, nor were the miners. In the early days, the United Mine Workers under John L. Lewis, was a tremendously strong union. Even the coal miners survived during that particular time. Bluefield was sort of an isolated little area that really was not too affected by those depression years.
ALLEN: It was not an easy time for the miners or the union. There was a lot of conflict going on.
FUQUA: Certainly. Some of those old people who you now read about in history books, owned the coal companies. I remember a fellow by the name of Colonel Thomas. I don't know if he was a colonel or not, but that close to the south, a lot of people were called Colonel or Major almost as a sign of respect. He owned some coal companies down in McDowell County, which was about thirty-five or forty miles from Bluefield. He was one of those tough guys that when they struck him, he just imported fifty gun toting guards out of who knows where, maybe State College, or somewhere else, who came in to make sure that nobody messed with the people that wanted to go back to work.
Of course the union was almost as severe with their own people. In those days, as I can recall it or as I heard it referred to, when people broke the line from the union standpoint, they were dealt with pretty severely by their own union. So the poor miner really didn't have much choice but to tow the line. Actually, in those years, the company stores were sort of a double-edged sword for the coal miners... The coal miners were paid off in script. The only place they could cash that script was at the company stores. I guess a lot of people accused the company stores of overloading the price range, but I'm not sure if they did that as much as they probably had a normal markup. They had a captive market is what it amounted to. Even during the strike times, usually the company stores would extend them credit. That's probably where that old song came in "You Work for the Company Store."
ALLEN: "Owe my soul to the company store."
FUQUA: That's probably where that came from. That was the good part of the sword I suppose. It kept the people in food at least during the strike.
ALLEN: Was it a problem running an appliance store that couldn't accept coal company script?
FUQUA: Once again, I think Bluefield was a little bit isolated only from the standpoint that we had very little influx of miners themselves. It was thirty miles from the coal fields and in those days, commuting was almost unheard of. Even the superintendents and the owners who lived in Bluefield and who had coal properties thirty, thirty-five, forty miles away would normally drive down and have a little house in the company enclave or an apartment where they stayed while there. They didn't commute back and forth, unlike today when we would nonchalantly drive those miles.
ALLEN: Did you work at the family store as you were growing up?
FUQUA: Yes I did. For a couple of summers, I...
ALLEN: Sometimes the offspring work and sometimes they're employed.
FUQUA: My problem was that we also repaired small appliances. I've never been too good with my hands but that was something for me to do. Finally after about the second year my dad suggested that I go somewhere else and work. It probably cost him more money repairing what I did than what he could get from the customers for those few items I did repair.
ALLEN: So you didn't have any real ambitions to go into the appliance business after that experience?
FUQUA: Not at all.
ALLEN: It's interesting that there are a number of people who have come into the cable business through the appliance stores, but you're not one of those.
FUQUA: No, I'm not. I know my father had the first television set in Bluefield. This may even be before your time. It was a Dumont television set. I remember it was brought in by the Dumont rep. He brought it to the house and we erected some kind of goofy antenna in those days. There was only one television station within one hundred miles of Bluefield. We picked up some little snowy, furry objects that we thought to be people. The audio travelled better than the video did. As a consequence we would sit enthralled watching these little snowballs do whatever they were doing while the audio played.
ALLEN: This was when?
FUQUA: It was after World War II. I would say it was probably in the mid to late '40s.
ALLEN: Where was that station located?
FUQUA: Roanoke, Virginia. WLSW I believe it was. I'm not sure what the call letters were. I can remember it was an NBC affiliate.
ALLEN: And the terrain between Bluefield...?
FUQUA: Very, very mountainous.
ALLEN: Where did you have to mount the antenna?
FUQUA: It was mounted, I think as I recall, on our chimney. It was about a thirty foot mast. Today, even with the refined antennas, they'd have a tough time picking up distant television stations in Bluefield.
ALLEN: So you went through elementary and high school in Bluefield?
FUQUA: Actually, I didn't go to high school in Bluefield. I went away to Greenbrier Military School which was located in Lewisburg, West Virginia. It was about sixty-five or seventy miles away from Bluefield.
I'll have to tell you a story if we have time for it. You had asked me about being disciplined by my parents. My father is a great traveler. By the time I was fifteen years old I had been in every state in the United States. During the summer, he would take off a month, put his four sons and his wife in the car, and we'd go to different parts of the United States. One time we'd go the northern route, the next time the southern route, the next time across the mid‑continent. He was a great believer in a practical education, and I certainly believe in it. It was great. He was also a great Sunday driver. It was not unusual for us to drive fifty, seventy or one hundred miles on a Sunday afternoon looking at the countryside.
I had a little bit of a problem of skipping school when I was a sophomore in high school. A couple of times he had to take me back up on Monday mornings to get me back enrolled for skipping Friday afternoons. It seemed to be Friday afternoons were the time to skip.
ALLEN: This was in Bluefield High School?
FUQUA: Yes. One Sunday we were taking a little ride and we drove over to Lewisburg, West Virginia, and in the course of this, went up to a place called Greenbrier Military School. I remember pulling in front of this sort of jail‑looking establishment, almost like a college campus, really. I said, "What's this?" My father said, "This is a military school." I said, "What do you mean a military school?" He said, "While we're over here, let's take a look." I figured, it can't hurt to look. We went in and met the president. It was owned by a family, the Moore family.
During the course of our visit we looked around the building. It was a sort of quadrangle concept. It was a square open building. All the dormitory rooms looked in on the quadrangle. It was four stories high. I was up on the fourth story talking to a fellow who was a student there when I looked out the window and low and behold, there goes my parents' car. They left me without a toothbrush or toothpaste or socks. I think I stayed furious for about six weeks, trying to figure out whether to run away from this place or what. My clothes came by bus the next day as I recall, but I stayed for two years.
ALLEN: This would have been about 1940 or '41?
FUQUA: Yes, that would have been '41.
ALLEN: Just before World War II began as far as the U.S. was concerned.
FUQUA: That's correct.
ALLEN: Being a military person at that time wasn't all unattractive to a young man I suppose.
FUQUA: No. But I don't think I garnered a great deal from it when later I went into the service during World War II. But I was at the academy for actually about a year and half because I went in mid‑year. I said my sophomore year, but it must have been my junior year. I graduated and then went to Virginia Tech for six months, which is where my father and brothers had gone before me. Then I went into the service.
ALLEN: Did you find that the experience from the military school gave you much of a leg up on the service?
FUQUA: I think it did. I went in the Air Force so it didn't help me a great deal from the standpoint of rank. I would have been better off going in the infantry. But it didn't shock me when I went into the military. Actually when I was at Virginia Tech I was in the military for six months. In those days, about 95 percent of the student body was in the military.
ALLEN: And you went to school on Friday afternoons while you finished high school?
ALLEN: It's one thing to be rebellious at home...
FUQUA: They were a believer in physical punishment at Greenbrier. The student body voted on it every year. Most of your demerits had to be walked off. If you got into some pretty serious problems, cheating, lying, stealing, then they had physical punishment. It was done by the cadets themselves to the cadets. They had a doctor present. They took you up into the tower at eleven o'clock at night. I never got there. I never got that serious. They would actually give you X‑number of licks for whatever it was. That was your punishment. The tower was about forty feet above the level of the housing units, and it had an echo effect, so everybody on the campus knew when punishment was being meted out. Although they didn't announce it or anything. They would come and knock on your door at five minutes to eleven and that's when your punishment was handed out. I'm sure today, the ACLU or somebody would be up in arms over something like that. That's what they did in those days.
ALLEN: How big was the student body at the academy?
FUQUA: It probably had five hundred or six hundred students.
FUQUA: All male. It was quite a feeding ground in those days for the University of Tennessee football team. We had some bang‑up prep school football teams. The academy went through high school and at least two years of college. Tennessee would send at least five or six of their fellows who they didn't think could make it in college. They would give them sort of a year out over at Greenbrier and let them play football. It made a big difference when we played some of our competitors. We were a powerhouse compared to them. We had these fellows who had already been recruited to college.
ALLEN: Was it a pretty good uprooting when you had to leave the Bluefield High School and all the friends and the social life that probably didn't follow you that well?
FUQUA: I think the social life was the more important part, but the rest of it, probably at that point in my life was a good change for me anyhow. I made a lot of friends at Greenbrier that I still have to this day. It sure taught you a different way of life. It taught you to be pretty responsible, maybe a lot faster than I normally would have or a person in my position would have been.
ALLEN: So looking back on it now, your father had been wise making that decision?
FUQUA: I certainly think so.
ALLEN: And you did speak to him again.
FUQUA: After about six weeks. I pouted for a long time. I thought, I'll show him.
ALLEN: Is there anything else about those early years in Bluefield that just pops into your mind? Stories that would be interesting to preserve from elementary school or junior high, the first date kind of thing.
FUQUA: I don't know that there was anything that comes to mind as I was growing up. Having three older brothers was a big factor. All three of my brothers were good students. They were nowhere near the discipline problem that I was. I had the entree to a lot of things that I probably wouldn't have had if it had not been for three brothers who were competent and all good students.
ALLEN: Hard to live up to?
FUQUA: Yes, that's true. Two of my brothers were all‑state football players. The one who's a minister went to college on a track scholarship. From that standpoint, it was pretty tough to follow in their footsteps.
ALLEN: What were your sports?
FUQUA: Basketball and track. I was on the squad my freshman year at Virginia Tech for six months. I wasn't good enough to dress for the games. I was just good enough to be cannon‑fodder during the practice sessions.
ALLEN: This was basketball?
FUQUA: Yes. I didn't even try track in college. I had a good lesson in track when I got into the service. This is a little bit off the beaten path, but I was in the Philippines during World War II, and they were trying to keep the troops interested after the war ended. So they started a football league and a basketball league and track meets and what have you.
I was in the headquarters division of the Far East Air Service Command. We had a football team and a basketball team and a track team. Evidently there were a lot of slow people in our group because I ran the 100 and the 2:20 for the headquarters company. We had a track meet in Manila stadium. I never will forget. There must have been 65‑70,000 people there because there was no other source of entertainment. They had two heats of the 100. There were eight people in each heat. They announced over the loud speaker as the guy would get ready to get into his position in his lane, who he was, what his fastest time was. I don't think there was a person there who couldn't have beaten me in the 100 running backwards. I came in last because there were some really great athletes there. So that ended my track career.
ALLEN: A little humiliating.
ALLEN: I have a friend who jogs but slowly. He has a stop watch and it only has an hour hand on it. It's the only one he needs.
FUQUA: That's the way it looked.
ALLEN: Your career in the military, did it focus on that kind of activity, noncombat activity?
FUQUA: I was actually a gunner and a cameraman. I only flew eight missions. I never saw a Japanese plane. I saw some flak once but it was a good ten thousand feet below us, thank goodness. Then the war was over at that particular time. My combat days were pretty limited.
ALLEN: So you went in early '42?
FUQUA: That's correct.
ALLEN: And you did your training where?
FUQUA: At Lowery Air Force Base out in Denver, Colorado. I took my transitions and flight with my crew in Las Vegas of all places which wasn't bad service at that time. I flew eight missions out of Guam, flying B‑29s. Although I was an aerial photographer, I was a tail gunner on those because they already had an aerial photographer. They just took me and made me a camera technician so when we came back in I would unload the camera and develop the film.
ALLEN: Was this because you had any background in cameras before or...?
ALLEN: You just volunteered.
FUQUA: That's correct.
ALLEN: Has that carried over? Have you maintained an interest in photography?
FUQUA: No, it's funny. I don't know how much money they spent on training me out in Denver for three or four or five months to develop film and print and repair cameras or what have you and I don't even own a camera today. It didn't stick with me long.
ALLEN: So you finished up the war in the Philippines. You went into the Philippines after they were taken but before the war was over.
FUQUA: That's right. First I was stationed on Guam. Then I went from Guam to the Philippines when all of the shooting stopped. That's where the headquarters moved.
ALLEN: You transferred out of B‑29s to...
FUQUA: I can't remember the title that they gave me. I was in the Adjutant General's Office and I was a sergeant. It was sort of something like the business manager of the office. There's a word for it and I'll think of it in a minute. It was very exciting, I must confess. We flew maybe on six or eight occasions to either Australia or Hong Kong for Pacific things. We took some senators to Australia. It was a C‑54 in those days, but I did very little flying after that.
ALLEN: Have you maintained any interest in flying since those days.
FUQUA: No, not really.
ALLEN: You like sitting back and letting someone else do the work up front.
FUQUA: Much more. In fact, I was actually in Air Cadet Training School in 1942 when they were so loaded up they said, "You can either do one of two things. You can either stay here and wait for an opening, or you can transfer and we'll place you in something else." That's how I got into aerial photography school, because there just weren't any openings in the cadet school. I was a little disappointed that I didn't have my crack at becoming a pilot.
ALLEN: But you might have sat there the entire war waiting for an opening.
FUQUA: True. True.
ALLEN: So you finished up in the Philippines and were mustered out in what, '46?
FUQUA: Well I was in three years, so I went in the later part of '42. I got out actually in the later part of '45.
ALLEN: You went back to VPI?
FUQUA: No, I went to West Virginia University at that point in time. I had had enough of the military. I graduated up there with a B.S. in Business Administration. If you take a year and a half in military prep school, a half a year in military college, and three years in the service, that was enough. I was sort of glad to get out of the military and get back into the civilian life.
ALLEN: It was quite a change for you to get back to Morgantown where people were people and you didn't have to salute everyone who walked down the street. And you responded positively?
FUQUA: I think so. I got married after I was in West Virginia for a year. I graduated actually from college in three years, because I went in the summer. At that point being married and having a responsibility, I figured I had better get out of college as fast as I could. I ended up being a pretty good student, graduated, and then went back to Bluefield. I went to work for a general insurance firm at that time.
ALLEN: How did you meet the young woman that you married?
FUQUA: Gee, I've forgotten that now. That's been so long ago. I'm sure it was a social event in Bluefield. She was much younger than I was.
ALLEN: She was from Bluefield?
ALLEN: You didn't meet her at West Virginia U then?
FUQUA: No, I met her in Bluefield. She was considerably younger than I was.
ALLEN: Probably prettier, too.
FUQUA: I hope so.
End of Tape 1, Side A
ALLEN: Was she in college at that time?
FUQUA: Yes. When we got married she was. When I met her, she was in high school. This may be a little side light of interest to you. When we were getting married, we went over to the county seat in those days. You had to get your marriage certificate at the county level. We went over to a little town, Princeton, which is about twelve or fifteen miles away from Bluefield, to get our marriage certificate or application at least. She had an envelope with her. She was a sophomore in college at the time that we got married. When she handed to the clerk this envelope, I said, "What's in that envelope?" She said, "That's my parents' permission for me to get married." I said, "What do you mean, your parents' permission?" She was only sixteen years of age. She had been double promoted two times I guess. She was double promoted in junior high and high school. She was a very bright young gal. She was only sixteen. A gal sixteen in West Virginia had to have parental consent to get married. At that time I was either twenty‑five or twenty‑six myself. It just never dawned on me to ask her how old she was. A sophomore in college you would assume would be at least eighteen or nineteen.
ALLEN: Did that give you any second thoughts about whether you wanted to continue with this or not?
FUQUA: No, not at all. Well, I shouldn't say not at all. It took a while for me to get over that shock. I kept thinking, gee whiz. She doesn't look sixteen. I couldn't say that. I would have probably hurt her feelings.
ALLEN: Where was she going to school?
FUQUA: She was going to Southern Seminary which was in Virginia. It was not too far from Blacksburg. I think it was close to Lexington, Virginia, maybe at Buena Vista, Virginia. It was a woman's college. She was there and I was at West Virginia University so we were a good distance apart.
ALLEN: After the wedding, she came to Morgantown?
FUQUA: Yes. We shared a house with another couple, a good friend of mine who's in the ministry now. He was a guy named Bill Helmantoller. Bill is today a minister and he uses clowns. He has a little clown show that he puts on with puppets. He's a magician. He does some tricks along with that. I haven't seen Bill for years. We shared a house with him up in Morgantown, West Virginia. I remember the first morning we were to share the cooking. The cooking responsibility was one family one week and the other family the following week. The first morning it was ours, which must have been the second week we were there. My wife, her name was Barbara, got up somewhat earlier than I did, and when I went down in the kitchen, she was sitting at the table crying. I said, "What in the world is wrong?" She said, "I can't cook." She had lived with her grandparents rather than her parents. For some reason her grandmother never really showed her anything about how to cook. The first week, being one of four brothers and my mother being a great believer in all of the boys knowing how to cook, I had to do all of the cooking. I have to say to her credit, she became an excellent cook very fast.
ALLEN: You taught her everything she needed to know.
FUQUA: I'd like to think that, but I didn't.
ALLEN: Those were some interesting times. Housing was short.
FUQUA: Yes. I was on the GI Bill of Rights which meant that I made maybe $110/mo. Whatever it was. I forget what fee you got in those days. I had a part‑time job working at a men's clothing store in Morgantown. Between the two. I don't know how we got by, but we did.
ALLEN: It's amazing how much you can do when you have to. Your years in Morgantown, you remember those positively?
FUQUA: Yes. That was a nice time in my life. I enjoyed that. I enjoyed West Virginia. I thought West Virginia was a nice school. In those days, we didn't have much of a football team. After seeing what Penn State did to them the other week, I'm not sure if we still do. They do much better now than when I was at West Virginia. That was the start of West Virginia's great basketball team. They had a series of about ten or fifteen years where they were ranked in the top ten every year. They had a couple or three All‑Americans. Most of those were after I graduated.
ALLEN: It was something to hang onto as far as the old alma mater was concerned. You graduated with a degree in Business Administration?
ALLEN: How did you choose that out of all of the options that were available to you?
FUQUA: I think it was almost done for me really. I had no particular field in mind that I wanted to go into. First of all I thought about going into some form of foreign service. I don't know why that intrigued me. Other than speaking high school and college Spanish, that was my only language and I didn't do that too well I don't think. It was just sort of a case of falling into the business school complex.
In those days, you really didn't have advisers other than someone attached to the registrar's office. When you went down to sign up for your courses for the upcoming year, it was whatever you have in the business department, and here's what's left. And here's how many credits you have to have and you have to have so many of this type or so many of this portion of the business school. I sort of fell into it.
I must tell you this. I still smile about it a little bit. Having gone to Virginia Tech and the business school and then going all year‑round at West Virginia, I really didn't realize that I was ready to graduate until I had a call at my home when I wasn't there one day. The dean of the business college wanted to see me. I said, "Oh heck, I've done something now. What have I messed up?" I went up to see him and he asked, "Have you been keeping a record of your credits?" I said, "Well not any more than knowing that I've done this." He said, "Actually you've taken all the courses that you need to take of the required courses." He said, "You do need another one hour elective course. You could tack it on to what you're doing now and you could graduate in the summer." I took lifesaving and that gave me an one‑hour credit. I almost drowned. That was it, I got out of college by taking lifesaving.
ALLEN: That was the time when the universities had more students than they could really deal with because of all the GIs.
FUQUA: It was packed. Unfortunately there were...I don't like to think that I was among that group, but I may have been...a lot of young people that should have never been there. They thought that this was their only chance at a college education. They were reluctant to "bust them out" in those days. They were certainly aware of all the veterans. I don't know what percent of the student body were veterans, but I think a great percentage was. Few of them were busted out. I think it was attrition, they just dropped out after awhile. Most of the classes were just brimming over with people.
ALLEN: The faculty working hard to offer something in the way of college education.
So you went back and started selling men's clothing.
FUQUA: No, I actually went back to Bluefield in the general insurance business. I was working part‑time in a men's clothing store in Morgantown. The place was called Chevy's Shirt Shop. I went back and went into the general insurance business for a company called Citizens Underwriters. They gave me a territory in McDowell County, West Virginia. Most of the coal mines were located in that part of West Virginia. I would leave home every morning and spend the day in McDowell county and drive home at night. That was my territory for general insurance, fire insurance, automobile insurance, general liability insurance. It was nowhere near the complex insurance programs that we have today.
ALLEN: You weren't selling life then?
FUQUA: No, we weren't selling life or accident and health or hospitalization, just general.
ALLEN: Were you fairly successful at that?
FUQUA: Too successful. In fact, that's how I got in the cable television business. They had four salesmen at this company and they had given me this whole county as a territory that had not been worked at all for years. There were two or three big coal companies down there. The people at the coal companies, after I made enough visits, would begin to refer me to people. This became a great source of new customers for us. After my second year, I went to work in '47‑‑after my second year of working for them, I earned the highest commission of anybody in the office, including the sales manager. So the general manager of the firm called me in, if you can believe that. He said, "We've got a problem. You're earning more money than the other fellows." I said, "That's right, because I sell more." He said, "Well some of these fellows have been with the firm for four or five years, and they have built up to the point where they have customers and they have to handle their renewals. On the renewals, instead of getting 10 percent, they only get 5 percent. They say that it takes up all of their time handling all the renewals and they say that you're getting all of the new business." I said, "Well that puzzles me why that bothers the company." Sooner or later, that's going to come to haunt me.
Most of the policies were sold on a three year basis. Today I guess they're sold on a six month or even a year basis. He said, "What we're going to have to ask you to do is to take a load of these renewals to handle, which meant office work and paper work so we don't have all of the complaining. I don't want those fellows to quit." So they took my five working days and restricted me to three out in the field.
Once again, every time I think back about it, it's so ridiculous. The next two years, I still outsold those guys. Finally, they call me in and said they wanted to make me the sales manager and put me on a salary. The salary was probably 60‑65 percent of what I was earning as a salesman. I said, "No, that's not my cup of tea." They said, "Oh well, if it works well we'll give you an override so that in two or three years, you'll be back up to what you are making now. I said, "That hardly makes sense." I think within the next couple of days was when I finally got into cable television. I didn't quit that day, but I thought it was time that I look around and find another source of business.
ALLEN: During this period of time, what was happening as far as your family was concerned?
FUQUA: We had one son, with another one on the way at that time. Eventually, we had four children, two boys‑‑they are the oldest‑‑and two gals. There were three years between the first son and the second son.
ALLEN: You learned that from your parents.
FUQUA: That's true, always keep it in fours. Then there was one year between the second son and the first daughter and two years between the first daughter and the second daughter. I was gathering a family.
ALLEN: And your parents were both still alive and active? That's when you first were introduced to television really, was while you were selling insurance.
FUQUA: That's true. I lived in Bluefield about four or five blocks away from my parents. I still went home every week for Sunday dinner after church. It was a family routine or procedure and we all enjoyed it.
ALLEN: One brother was living there. He's the one that's in the business now and the other two were away.
FUQUA: That's right.
ALLEN: Did they come back fairly regularly? Was it a pretty closely knit family?
FUQUA: They would come back usually three or four days once a year on their vacation. In those days, we didn't really communicate. By communicate I mean write to each other or communicate on the phone. We do now, but we didn't in those days. We are probably closer now as a family than we were in those days. I don't know if that's the norm in big families or not. But twenty‑one year old brothers...I can see this with my children...very seldom talk to each other on the telephone. They never write.
ALLEN: I think writing has probably died out.
FUQUA: I think you're right.
ALLEN: The telephone communication has become far less a conscious act, and far more a habit. You just pick up the phone and call. We used to think real seriously about a long distance telephone call.
FUQUA: Oh, very, very true.
ALLEN: That's changed.
FUQUA: It has, and I'm sure the cost hasn't gone down any, it's just that maybe the cost is held better in line as our income level went up.
ALLEN: The number of minutes it takes to work and earn a telephone call has gone down dramatically because the volume has increased.
FUQUA: That's a good way to describe it.
ALLEN: So we're up now to the point where you knew the insurance company was not going to treat you well and you decided that you wanted to find a better way of making a living. How did cable pop up?
FUQUA: There was this little restaurant that I used to eat lunch in when I was in Bluefield every day. I went downtown. It was sort of a habit where a lot of the fellows from various businesses would meet and have lunch. We probably got together one day a week as I recall. I was a member of the Lions' Club and I forget whether that was a Monday or Tuesday. The other day or so that I was in town, we would meet for lunch. I was sitting there one day and a fellow by the name of Harry Holmes walked over and tapped me on the shoulder. I knew who Harry was. He had the ice company in town. In those days the ice company was a big business. He was sitting with a fellow by the name of Harry Lawson. Harry Lawson had a wholesale business that served the coal industry, hardware primarily. It was hardware of the nature that they would use in coal companies. It began to expand into other fields. They had tried to start a cable television firm there in Bluefield.
The reason that they did this is Harry Lawson who had the hardware store, got into the appliance business. He found out about cable television. In those days, they were just trying to sell primarily hotels and apartment complexes. As you probably know, Jerrold Electronics really had its start in selling closed circuit or SMATV systems in apartment buildings.
This will be a little sidelight, but it may be for your historical record. The sales manager for Jerrold Electronics in those days was a gentleman named Randy Tucker, who now lives in Charlotte, North Carolina. Randy was Milt Shapp's sales manager. They had started out in apartment complexes and hotels and Milt then had the idea of trying to wire a town or a city to see whether or not they could go into that kind of business. That's where Harry Lawson had heard about it, but he could not get in contact with Jerrold. I guess Milt must have been working out of his garage or somewhere then. One of his clients (Harry Lawson) was the Philco Corporation. They used to make television sets, radios, refrigerators, the whole bit.
The Philco Company said, "Well we can build a cable television system for you." He said, "Are you sure?" They said, "Yes. We have all the engineering expertise in the world. We make amplifiers for jukeboxes, we make amplifiers for radios." I guess that was even before the days of component parts. So they had convinced Harry that they could build this cable television system in Bluefield. Master Antenna, I think was the title in those days.
ALLEN: It was to be a turnkey operation.
FUQUA: That's correct. They had built about ten or twelve miles of cable and it never worked. Actually Philco at one time had as many as twelve or fifteen engineers living in the hotel in Bluefield trying to make this cable television system operate and it just didn't work. They used to laugh about it that you could walk down any street in Bluefield and there would be one of these engineers on every utility pole hollering to the next guy, "Is it working?" The two Harrys had gotten to the point of being just totally frustrated. I don't know how much money they had invested. Not a great deal I don't believe at that time.
ALLEN: Not as much as Philco had.
FUQUA: Philco had probably lost more in the operations than they had been paid by the two Harrys. Finally Philco threw up their hands and said, "It just won't work." They gave the two Harrys back the money plus $50,000 for the costs that they had incurred while they tried to make the system work. Harry Lawson said that they had decided to go with this Jerrold group who said they could make a master antenna system work. They were both frustrated businessmen, very busy in what they were doing. They tried to do this as an offshoot. When they tapped me on the shoulder, they had been sitting, having lunch together. They said, "We ought to get some young guy who's got a lot of energy and get up and go and put him in here to look after this thing and run the company." At about that time I walked in, maybe the first "goat" they saw. So they asked me to come over to their table and talk about it. I don't recall either one of them being a particularly great salesman on the long range future of cable. But sure it made sense to me.
I had seen that experimentation with my Dad and the television set. I didn't own a television set myself. The improvements could be made, and if that worked... Gee whiz, why wouldn't everybody in town want to hook up to it. It seemed to me that it had a reasonably good chance.
The best part of their salesmanship was that they talked me into coming to work for them for about 60 percent of what I was making at the time. I was so frustrated in what I was doing in the insurance business that I figured, what the heck, I could at least give this a try. If it doesn't work, I'll stop and do something else.
ALLEN: Not only were you the first person to walk in but you had that reverse sales incentive plan that the company had just presented, so you were really ripe for picking.
FUQUA: Correct. They couldn't have hit me on a better day.
ALLEN: There was a little sign hanging around your neck‑‑ "I'm ready."
FUQUA: Here's a pigeon.
ALLEN: Was that the only undertaking that Philco made in the cable business?
FUQUA: To my knowledge, that's the only one they ever did.
ALLEN: Why did they go wrong? You must have had to clean up after them. What did they do wrong?
FUQUA: I think their biggest problem was that in the fall of the year, the fall of 1951, there was such a swing in the temperature variation, that they couldn't keep the system from literally going off the wall at night and coming back on in the morning. As a consequence, every night the temperature dropped and remember that this is a city that's about 3,000 feet above sea level. So that the temperature variations could go from sixty degrees at noon to fifteen degrees at night. Those variations with the equipment in those days, being all tube equipment was more than their equipment at least, could stand. Whether they were using the wrong tubes or the wrong component parts, I don't know, but it didn't allow for that swing.
I don't know that they'd ever tested this equipment from a temperature standpoint. Even when I first went to work and I still had that equipment, we were off the air every night. Every night we went off the air. As a consequence, once I had television, I had to stay up until television went off. In those days it went off at eleven o'clock. I had to get up before television came on to know whether or not we were in business. That was the only way that I could tell.
ALLEN: How in the world did you learn anything about the cable business? There was nobody in Bluefield to teach you. Where did you find it out, entirely trial and error, from Jerrold, or...?
FUQUA: Jerrold, in those days, had a contract when they sold equipment. Strat can probably more accurately describe this. It was later tried in court and it was found to be illegal, I suppose. But then, if you bought the equipment from them, they would also become your trainer and pseudo-manager. They would tell you how to work the equipment, and they would tell you how to work your operation. For that, they would get a percentage of your gross. That was tied in with the manufacturing. Strat would know who challenged it and broke it up at that time. So that the concept of sending out cards with a billing on them for the service, came from Jerrold Electronics, at that time.
The two Harrys, Harry Holmes and Harry Lawson, didn't stay in the business much more than six months after I came on board. The fellow who I told you was the early sales manager for Jerrold, Randy Tucker, had gone to work for an investment firm, financial investment firm in Stamford, Connecticut‑‑Fox Wells, and Rogers. Strat will laugh about this because it was part of that overall group that had Clarksburg where all the big copyright problems started. Randy Tucker went to work for Fox Wells, and Rogers who then bought the system as it was, from the two Harrys. Randy probably had more to do with me learning the cable business than anybody else. Not only did he have what background there was to have, but he was a very, very, bright articulate fellow who was a good teacher to work for.
ALLEN: What kind of a franchise did the two Harrys have?
FUQUA: In a little town like Bluefield, that's probably another advantage that I had. That was really no problem. Everybody knew my family so that I just went up to the city and said, "This is going to be changed and it's going to be changed to a guy named Randy Tucker, not Randy Tucker of Fox Wells, and Rogers." I think the city manager or city attorney said, "Fine," and signed it over. In those days, a franchise didn't mean very much.
ALLEN: What about pole rights? Was that a problem at that time?
FUQUA: No, it really wasn't. The company that we had the pole rights with was called the Appalachian Electric Power Co., which although it was owned by a group of out‑of‑state investors, it was almost an independent little power company away from their master group. They certainly saw nothing wrong with pole rights, so there was no problem with them. The telephone company in those days was just as bad as they were later and was concerned about us. They didn't know what it was that we did, or how we did it, or what. But I don't recall ever having a big problem with them except to make sure that we were in the required spec area.
ALLEN: Did you have to pull down what Philco had built or were you able to adapt it by putting Jerrold components in it?
FUQUA: We replaced everything, not all of the cable. Some of the cable, we were able to keep. We took all of their equipment.
ALLEN: All of their amplifiers and everything had to come out.
FUQUA: I don't know what ever happened to those.
ALLEN: That would be an interesting artifact in the Museum I suspect.
FUQUA: It really would be. I don't know who owns Philco now or how many changes they've gone through or whether they have any of that equipment.
ALLEN: How long did it take you to build Bluefield?
FUQUA: We sort of built it in segments. It wasn't that large of a system because it wasn't that big of a town. When I went to work we had about ten or twelve miles of plant. We had approximately 300 customers. I can always remember the figures because they were all in threes. We had 300 customers, we owed $30,000 in payables and we had $3,000 in the bank, and the guys had said, "Here's the business, run it."
I found out about all of the bad things you have to do in business. The mild falsehoods that you have to tell everyone who you owe money when you're trying to put them off; how to get your money in and get it in fast, and pay it off. Then we went through the rebuild process. The people, I suppose, were so anxious for television that they put up with a lot more than a person would today. We were still off and on, off and on, all the time. When we first went with the Jerrold equipment, it was three‑channel equipment with strip‑amplifiers.
I'd like to tell you about my first engineer. When I went there, the engineer was a Philco engineer, later replaced by a Jerrold engineer. The Jerrold engineer was not a consumer oriented kind of engineer. It didn't bother him to take the system off. So what if the people didn't watch it. He had to repair the equipment. The engineer who replaced him was one of the brightest guys that I have ever known from a technical standpoint in the cable television business. He went by the name of Boots Thomas of Princeton, West Virginia. B.W. Thomas.
ALLEN: Boots was actually his first name then.
FUQUA: Yes, and he was a true pioneer, and he never really got credit for it. In the little town of Kimball, West Virginia, when the only television signal that was in the eastern part of the U.S. was an airplane that was flying around Pittsburgh, Pennsylvania, with a TV transmitter aboard sending out a signal, he built a three‑amplifier cable television system using amplifiers out of jukeboxes to transmit television signals to three homes in Kimball, West Virginia. It was his home, his father‑in‑law, and his sister.
ALLEN: When was that?
FUQUA: I would say that that was in the late '40s. It was probably in '48 or '49. I would have to find out when that was going on in Pittsburgh. What they would do, maybe two hours a day, or one hour a day, they would fly an airplane to some altitude. It had a small transmitter in it. I can't remember if it was beamed up to that or how.
ALLEN: Do you know who was doing that, what company? Was it KDKA?
FUQUA: I think it was KDKA. That would be something interesting to check into and find out when it was. I don't know if Boots ever got credit for that, but here was a fellow who didn't go any further than the ninth grade in school, but could not only maintain the equipment, but could design it.
End of Tape 1, Side B
ALLEN: Gordon, you were talking a little bit about Boots Thomas and his prowess as an engineer in helping to get Bluefield on the air after the problems that you had encountered.
FUQUA: He was a rather ingenious fellow. His only background in electronics to my knowledge was that he worked as a repairman for his father‑in‑law who had the jukeboxes. That's where Boots learned his electronics and what he picked up out of books.
I remember one of the early manufacturers in our business was a fellow named Luther Holt. Luther had a manufacturing company somewhere in Pennsylvania. I forget where it was located. I remember Luther came over to see Boots twice and Boots went up at least once, maybe twice to see Luther to discuss some of the problems in amplification equipment. Luther told me that he was constantly amazed at Boots' knowledge without having any formal education whatsoever. Boot's could see right through problems very simply where Luther would make it more complex than it really was.
ALLEN: One of the interesting side lights in this was how that kind of communication evolved. Here was Boots Thomas in Bluefield, West Virginia, and Luther Holt someplace in Pennsylvania. How did Holt find out about Thomas?
FUQUA: In the early days of cable, I guess we had the beauty of freedom of communications, if that's the correct phrase. I don't think there were many operators, or many technical people who wouldn't literally divulge everything to you. There was no competitive feel at all, in those days. Certainly no one ever dreamed of going into some other guy's city and over-building as we talk about today. In those early days, there was total freedom of exchange. If you had a problem with Jerrold's electronic equipment, you could call Milton Shapp who was the president of Jerrold and discuss it with Milt. You didn't have to go through the middle people if you didn't want to.
There was a great deal of communication that went on as things began to evolve. Particularly, electronically. In the early days, there was no group of engineers that met. There was no group of technical people that met other than maybe the managers in the first few meetings of Pottsville, Pennsylvania, in the early days of the NCTA. It wasn't unusual at all for a system technician to talk to the design engineer for Jerrold or Spencer Kennedy, which was another company in those days, or Ameco, which was out in Phoenix. A lot of the field experience was gained by those design engineers from the manufacturers talking to people out in the fields. I don't believe the manufacturers were large enough in those days to let you have forty pieces of equipment to check out for a year or two.
The business was evolving too fast. I think Luther found out about Boots when we were beginning to look around for some equipment rather than staying with Jerrold. We wanted to go from three to five, then to seven to ten to twelve channels. One humorous thing that I can remember about Boots and Luther that sort of tickled me was when we were using Luther's equipment, and I think we used it primarily in our trunk line. He and Boots had designed this piece of equipment down to the last degree. I was sitting looking over their shoulder. They were working in Bluefield lining this equipment up which, in those days, was letting it bake in. You had to let the equipment bake in to test all the tubes and the component parts...either they would go out in a short period of time or they would last. You would have them sitting on the bench baking in as such, as all engineers and technicians like to do, tweaking it up.
I was watching them look at this amplifier. Boots had had the input on this amplifier as well. I heard Luther make the statement, as far as the trunk is concerned, each amplifier has the exact same gain. Looking there, I noticed that there was an input test point and an output test point. I asked Luther what would be a layman's logical question, "Luther, if each amplifier has the same gain, why do you need a test point on the input as well as the output?" He said, "You don't really. You only need to have it on the input because you know what the output is going to be." I said, "Well why did you put an input and output on?" He said, "Because Boots wanted me to. If he had asked me for a water faucet I would have put it on there."
ALLEN: Did you hire Boots as soon as you became manager of the cable system?
FUQUA: Yes, he actually came to work before I took over. I made him the chief technician, but I believe that he must have been there as a technician when I went to work for the company.
ALLEN: How large of a staff did you have with the company when you went to work with 300 subscribers?
FUQUA: We had three technicians and myself and a gal in the office.
ALLEN: It took the three technicians to keep the system on the air?
FUQUA: It took the three technicians eighteen hours a day to keep it partially on the air. I'm afraid we were not very good in those days.
ALLEN: Then you began to add new subscribers.
FUQUA: I think we really didn't make much of an impact until we got up to where we could depend on the cable system. As I say, I was going to bed every night when cable went off and getting up to make sure that it was on in the morning. Once that ceased, I think we got into sort of an advertising and marketing campaign.
Randy Tucker as my boss, in those days, was very marketing oriented. He was a great believer in marketing. Most of our marketing and advertising in those days, was in newspapers. We didn't get into direct mail, or even door‑to‑door selling campaigns until the late fifties or maybe early sixties. Who would knock on a door and ask them to buy cable television? Randy Tucker's favorite expression was "sparkling clear television." That was the most important thing in those days. TV was black and white. Sparkling clear seemed to be a good descriptive adjective.
ALLEN: As I remember, you said the original owners only stayed with the system about six months and then it was sold to the group that Tucker was involved in.
FUQUA: That same group, by the way owned Sandford Randolph's system in Clarksburg, West Virginia, and the one in Fairmont, West Virginia.
ALLEN: How long did it take Jerrold to clean up the problems with the cable systems so you had a dependable system?
FUQUA: I would say about six to nine months. It was about a year after I went there before I could ever feel very comfortable going to bed at night.
ALLEN: Did you wonder some of those times whether you had made the right decision to leave the insurance business and go into this thing called cable?
FUQUA: When the phone would ring at 11:00 at night, yes. Or some drunk would call you at 6:30 on Sunday morning. In those days television didn't go on the air on Sundays until about nine or ten. He would say, "What's wrong with the television? I'm not getting anything." We kept saying, "I'll check it out." I would reach for the phone to call one of the technicians then realize that it's Sunday morning and the television stations aren't on the air yet.
ALLEN: What stations were you picking up at that time?
FUQUA: We had two stations out of Roanoke and a station out of Huntington, West Virginia. Then later we added Charleston, West Virginia, then Oak Hill, West Virginia, then I believe Bristol, Virginia. Those were the five or maybe six stations that we carried.
ALLEN: How did you go about sighting the antenna locations?
FUQUA: Bluefield is in a bowl, totally surrounded by mountains. Roanoke, Virginia, was to our east, almost due east. There was a mountain between Roanoke and Bluefield. We erected our antennas on top of that mountain which picked up the two signals later out of Roanoke. That was basically the reason the antenna was on that side of Bluefield as opposed to being on some other side.
ALLEN: Did that stay your antenna site the whole time?
FUQUA: We moved twice, I think, and I think they have moved once since I had anything to do with it. I guess it's still on that same mountain.
ALLEN: Then you just ran the cable to Bluefield from there.
FUQUA: In those days there was a cable called K‑14 which was about at least two inches in diameter. It was a big, old, unwieldy cable. The reason you had to use that cable was because we didn't know how in the world to get the electricity half way up the mountain. You had to have it so you could get the amplifier at the top of the mountain and then an amplifier as far down as you could get it so you could get electricity to it. We didn't power our own equipment in those days. Each amplifier was powered individually.
ALLEN: You wanted to have the biggest cable you could have and let it run down the mountainside.
FUQUA: That's right, the biggest cable you could find.
ALLEN: Gravity worked.
FUQUA: I don't even know if they still make that cable. I doubt that they do.
ALLEN: By the time that you were building Bluefield, there was a pretty good array of equipment available.
FUQUA: Well, in the early years there wasn't. At least we didn't know about it. Other than Jerrold, I think maybe some of your other people will have a better feel for this than I will. I believe it was Jerrold first, Spencer Kennedy second, a company by the name of Ameco third, and Luther Holt was probably in there somewhere but his operation was never as large as those others. Scientific Atlanta was a late‑comer. RCA got into it in the late sixties.
There was an apartment house group that tried to build a few cable systems, Blonder‑Tongue. They were never heavy in the cable field as far as cities were concerned.
ALLEN: Were there quite a few people building systems in West Virginia at the time that you were building Bluefield?
FUQUA: No. The Clarksburg, Fairmont, and Bluefield systems were built about the same time.
ALLEN: That was it?
FUQUA: That was it. A little later the state branched out of course. But those were the first three cable systems in the state.
ALLEN: Were you in contact with the people who were managing the other two?
FUQUA: Yes, they became good friends.
ALLEN: Who were they?
FUQUA: Sandford Randolph in Clarksburg, West Virginia, and Bertram "Boots" Cousins in Fairmont, West Virginia. A fellow named Ray Schneider, who died last year, was in Williamsport, Pennsylvania. He was in this same group of people.
ALLEN: He had built a system in West Virginia at that time?
FUQUA: No, in Williamsport, Pennsylvania. Then a fellow named Moore, I believe his name was Harold Moore, was in Muscle Shoals, Alabama. That was sort of our little group of people who exchanged ideas. The company in Connecticut had some interest in all of us and as such, Tucker became sort of the traveling regional manager.
ALLEN: Did you travel to some of these other systems?
FUQUA: Very seldom. On occasions we would. Before too many years went by we formed a West Virginia Cable Television Association.
ALLEN: You were involved in the founding of that association?
ALLEN: Do you have any recollection of when that was? The mid‑50s?
FUQUA: I would say that is probably the mid‑'50s. In fact, I believe that Sandford Randolph might have been the first president, but I'm not sure. I was president and Bill Adler from Weston, West Virginia, was president.
ALLEN: How long were you president?
FUQUA: A couple years. It was sort of a case of our passing it around. There weren't really many of us.
ALLEN: It wasn't a great honor, someone had to do the work.
FUQUA: That was primarily it, but we worked it out so that the owners allowed us to go to the Greenbrier down at White Sulfur Springs for the convention. That was the greatest thing about it. In the early days we didn't do that. In fact, Strat Smith attended the first West Virginia Cable Television Association meeting. I believe it was in Richwood, West Virginia. You can ask Strat about that, because I think he and Sandford went trout fishing and they had to crack the ice to get the lines down in the water.
ALLEN: Do you recall who else was there at that first meeting?
FUQUA: Sandford and "Boots" Cousins and a man named Ralph Shepler from Elkins; Carl Gainer who was from Richwood; Harry Harkins; maybe Charlie Erikerson, who is from Parkersburg now.
ALLEN: Is that where he was at that time?
FUQUA: No, he was in Logan, West Virginia, at that time.
ALLEN: So a lot of very small towns were building very small systems. It sounds like there were about twelve or fifteen of them in place by the time you formed the association?
FUQUA: That's correct.
ALLEN: Did you have a board of directors?
FUQUA: I think we had a board of directors and everybody was on the board, as I recall. Nobody was left out.
ALLEN: What were some of the issues you were fussing with at that time?
FUQUA: At that time we were beginning to get enough attention from the public service standpoint. Our major concern in those days was public utility control. Also we were having the usual problems with the telephone company making it as difficult as they could for us on their utility poles. We were all learning the marketing concept at that time, which was sort of an interesting transition that we all went through. I suppose those were the primary issues.
ALLEN: Let's go back to the building of Bluefield again. Once Jerrold had solved the problems electronically, so you had that sparkling picture, how fast did the system sell then?
FUQUA: It really didn't sell that fast. The next year we probably went from three hundred to seven hundred fifty then to twelve hundred fifty then up to two thousand. If I recall correctly, Bluefield was about fifteen thousand people so we probably had about five thousand homes, maybe four thousand in the cable area. We didn't have the entire city wired. We probably had between thirty‑five hundred and four thousand homes, ultimately. I think when we sold the cable system, because I became a part owner later on, I think we had twenty-five hundred or twenty-eight hundred subscribers.
ALLEN: Did that include Bluefield, Virginia, as well as Bluefield, West Virginia?
FUQUA: Yes, but we only covered just a little bit of Bluefield, Virginia.
ALLEN: What is the geographic separation? Is there a river or something?
FUQUA: No, nothing.
ALLEN: Why did you only build a small amount?
FUQUA: In those early days, you didn't build anywhere where there was less than one hundred or one hundred fifty homes per mile and Bluefield, Virginia, was much more spread out. It was a little more country town surrounding Bluefield, West Virginia, on the southern side at least. There wasn't really that much concentration of homes.
ALLEN: Did you get involved in doing any of the building installation work or did you stay out of the technical side entirely?
FUQUA: I knew very little then and I know less today about the technical end of it. I stayed out of it almost entirely. I had enough working knowledge to make me dangerous. I knew what was happening and how it was supposed to be done. In fact, one of the greatest fun times my employees had was one day, I was fussing at them about not being able to make enough taps a day. I said a tap really shouldn't take a guy any more than an hour and a half regardless of what the problem was.
Without saying anything to them, I just picked up a work order a little later on during the day, and one of the trucks that was there. I took the truck. I went out to this house. I remember it was on Highland Avenue. I put up the ladder. In those days we had pressure taps that actually went right into the cable. I just had gotten the tap on, as I recall, and I looked up and there were the other two trucks parked across the street. All of the employees, including the secretary, were all sitting up on this wall watching me. I think it took me just about three hours to make that tap.
ALLEN: And you told them that's why they where the technicians and you weren't. And might that be the only tap that you built?
FUQUA: That was the first and the last. Two things I did only once. One was to climb a 125 foot tower on top of the mountain and the other was to make a tap. It wasn't too hard coming down from the tap, but it was hard coming down off the tower.
ALLEN: What was the motivation for going up the tower?
FUQUA: Just to get up there. Because it was on the top of a mountain, you had that optical illusion that when you got up, if you looked straight down that you were about two thousand feet down to the floor of the valley. I didn't like that. The wind would hit that mountain and blow up and it would make your pants legs stand out just like they were pressed. Once I got out of there, I said to myself, now that was dumb. Never again, never again.
ALLEN: It's a little different than sitting in the tail of a B‑29.
FUQUA: That's true. It's almost as uncomfortable at times. The heat or cold.
ALLEN: What kind of marketing strategies were you using at this time, Gordon, to extend your penetration?
FUQUA: In the early days, of course, everyone charged a big installation fee. There was a tax gimmick, if you want to use that phrase, of aid in cost of construction in the early days of cable television. If I built a plant and it cost me $100,000, and you, as a customer came along, and paid me $125, I could offset that, not show it as income. I could offset that against that capital expenditure. I'd have to reduce that capital expenditure by that much, but it was called aid in cost of construction. I don't know if it was an internal revenue ruling or how it came about. So it took us a long time interestingly enough in the industry to understand that that $125 was quite a deterrent to people getting on the cable.
I think cable's price basis came from two places. We wanted to make sure that we were no more than the telephone companies' basic rate and no less than the basic water company rate in town. In Bluefield that made it pretty easy by the time we went on the air. The basic telephone rate was $5.00. The basic water rate was $2.50 monthly. You had your other services. So that the $3.50 or $3.75 fit right into that little slot. That's where that price came from. No one really knew how to price it. You didn't price it saying if you had X‑number of customers, that would give you that kind of return. Just what would they pay, was basically the concept. The $125 was a great deterrent to people going on.
Up in Berlin, New Hampshire, I wish I could remember this guy's name. A young fellow who was in the cable television business, for some reason decided one day that mathematically it made a lot more sense to charge people $5.50 rather than $3.50. If you could get more people and keep them on a big enough period of time, you didn't need $125. So he dropped that down to about $19.95 or something. It was "Bam!" a big splurge. The other monthly service fee was called maintenance and repair, and the $5.50 was called rental. You rented the cable service. You had a $3.50 rate where they paid the big installation fee, or you had a $5.50 rate where they didn't pay. That was probably the biggest boost in marketing in the cable industry at that time. The word spread pretty fast, but a lot of people didn't want to chance it.
A guy like Sandford Randolph, for example was so very successful... Sandford was probably one of the masters of marketing. He always had a great flair for advertising and promotion. He was so successful with the $125 that it was hard to get him away from it. He said, "What the heck, they'll pay it up here." They wouldn't necessarily pay it in Fairmont, or they wouldn't necessarily pay it in Bluefield, or where have you. That was probably the greatest impetus at that time. That was probably in the mid‑'50s when that concept came in...scratch the big installation fee.
ALLEN: That was what really fostered the growth in Bluefield?
FUQUA: That really took off. We grew more by the implementation of that program than any other thing we ever did.
ALLEN: The magnitude of that $125... What were you paying the technicians by the week at that point?
FUQUA: I would say $50.
ALLEN: We were looking at two and half weeks wage for a technician to hook on to the cable. One hundred twenty‑five dollars was probably nearly that much for a coal miner.
FUQUA: That's true. That was before the days of the portal‑to‑portal pay scale. Those guys didn't make that kind of money. It was enough of a deterrent that you could see that in Bluefield. We had not had great growth as such for two reasons, one because of the quality of the signal and once we got that picked up also because I didn't think that we were giving them that good of a service. That high installation fee was really a deterrent.
ALLEN: When you dropped the installation fee, did you move the monthly charge up to where you were more than the telephone company?
FUQUA: I'm not sure if we ever went above that, because the telephone company had their rate increases at the same time. I think at some point in time, we sort of stood on our own two legs. In the early days, we didn't know how else to market it. We didn't know how to price it. So $5.50 or $5.95, I forget what the exact price was, now, seemed to be in the average customer's pocketbook area.
ALLEN: Do you have any recollection of what your breakeven point was so you had enough customers so you were at least making expenses?
FUQUA: It seems to me that it was twelve hundred customers.
ALLEN: So it was a lot?
FUQUA: Yes it was. It was a couple of years, as I recall from the time that I went with them. It was a slow process.
End of Tape 2, Side A
ALLEN: This is the second part of the interview with Gordon Fuqua. Today is Friday, the 5th day of January, 1990 and we are in Florida in Mr. Fuqua's home where we will continue talking about cable in Bluefield, West Virginia. Gordon, we need to be a little bit more specific about the dates when you left the insurance business and leaped into this wonderful opportunity where you could take a pay cut and a considerable more amount of responsibility.
FUQUA: To the best of my memory, Bob, it must have been probably in mid year.
ALLEN: Mid year of?
FUQUA: Mid year of 1951.
The reason I say that is because I am sure that the reorganization of the insurance company, the sales bit of it that I talked to you about a little earlier, wouldn't have occurred until after the end of the year, and it probably was a two or three month period of time before I was to the point of where I was ready to try something else in life. So I was thinking it was about mid year 1951.
ALLEN: And you know when we left off the earlier discussion we had talked a little bit about the idea that cable really began to take off when the rather substantial hook up fee was dropped down to a more reasonable price. Did you pick that up in Bluefield right away as soon as the idea surfaced? There was somebody up in New England I think that originated it.
FUQUA: There was one in New Hampshire as I recall, and I wish I could remember the young fellow's name who did that. And, I forget what brought it about for him to do it. An associate of mine, in fact, my partner at that time, or my boss at that time‑‑a fellow by the name of Randy Tucker, who lived in Connecticut, somehow found out about this and went up and spent three or four days in Berlin looking at what had occurred. We didn't realize that it had been a deterrent. We had tried the high installation fee. We had tried all manners of breaking that down by promotion and marketing concepts. We would trade in your old antenna and give you $75 for it. So for some period of time, we had acknowledged that the installation fee was a deterrent, certainly a marketing deterrent to the cable industry. Once we gave the lower hook up fee a try we had two different priced customers, those who had paid a high installation fee were paying $3.95 and those who did not pay the high fee who were paying $5.95. I recall that was the price. And it wasn't long before the $5.95's overtook the $3.95's which we had acquired in a year or two. I think in probably six months we acquired more customers through the $5.95 route than we had the other way. So it proved very successful.
ALLEN: Was your primary interest or activities related to operations in the marketing end of things?
FUQUA: Well, I suppose everybody always thinks they have one particular facet that they are a little better in than others. I always thought that I was better in marketing than certainly I was in engineering and probably even better than I was as a so-called "general manager." I always sort of thought that marketing was my forte, but then looking back on it, most of my associates in those days I think thought the same thing. A few of them were engineering oriented but most of us were marketing people. It was a brand new business you know where you could try almost anything and if you failed, you really didn't fail, because no one knew what failure was in those days.
ALLEN: What were some of the approaches that you took to marketing both before and after the adjustment of the installation fee?
FUQUA: Well, I think probably the hardest one to come by, and I only bring this up because it is proved in later years to be the most successful is door to door or direct sale. I don't know why the cable industry and myself included was so reluctant to do that. I think we thought somehow it demeaned us. It made Fuller Brush people out of us, if you will pardon the expression. There is nothing wrong with Fuller Brushes, but I am not sure that we really knew how to approach it. I think my first year at direct sale was done through the marketing approach by having a survey done at the same time. I used some of West Virginia University football players to do this who were looking for jobs throughout the summer. These were young guys from around that particular southern part of the state who were looking for jobs. The Athletic Association would say that if you needed anybody during the summer these are honorable young men and it didn't hurt the athletic program either. So we used them to do a survey. The final bit of the survey was whether you were on cable or not on cable. And if they were not, we asked are you familiar with what the cable offers. That was our first direct selling attempt and it was really not very good at marketing from that standpoint, because we sure didn't instruct these guys on how to close, and the secret to door to door selling is closing while you are there. You don't come back or you don't hope. I think that the cable industry was very reluctant to go to that.
So most of our initial advertising marketing was done in newspapers, then to radio. It seemed to us at least in those early years that you could best describe yourself by having something that people could see as opposed to the radio subversive concept of where people think about it a little bit. So, we started out with newspaper. Then I think we moved into radio. Then what became I think the biggest marketing posture that we took and the most successful, at least during the early fifties was direct mail. It became the lowest cost factor too, only because the good cable systems knew, I say the good, most of them, knew equally as well who were not their customers as who were their customers. It is not like selling honey baked bread. You know that there are ten thousand people out there to eat honey baked bread but you are not sure if the same three thousand are buying yours every week. Cable was of course different because we knew every house. We had the address of every house, those who were not and those who were. It became, from a dollars and cents standpoint by far the cheapest form of marketing that we could use which was direct mail.
ALLEN: Did you do the creation of the direct mail pieces?
FUQUA: Most of it. Yes.
ALLEN: Do you have any of those left?
FUQUA: Probably do. Unfortunately, I say unfortunately, jokingly, maybe I always considered myself a little bit of a poet so a lot of them had prose attached to it. I will dig around and see if I can find any of those.
ALLEN: Do you remember anything or any of the limericks I assume you were using?
FUQUA: Oh yeah. In fact, I even had written a couple letters to the FCC with limericks, protesting things that they did or didn't do. Probably I have those around somewhere, Bob, if you would like to see them. My wife probably knows where they are and I'll see if I can dig them up and send them to you.
ALLEN: They would be good additions to the Museum.
FUQUA: Yeah. You might get a kick out of them.
ALLEN: Did you use the direct mail approach to try to determine where to extend the build on the system?
FUQUA: Well, I'm not sure that we were that good of business people in the early days. What we did basically was to agree when we got the franchise as to build "x" number of miles of plant which basically covered the mass of the city population. Then from that time what we, at least our format was, and I think this lasted probably up in through the late '70s, maybe into the early '80s, is that we would go out and if we had to extend the plant a mile then we would go out and pre-sell enough customers so that we would know that we would have a good rate of return on that mile before we ever built it. I think that particular formula is probably gone by the wayside for two reasons, (1) the city and the counties probably demanded that the cable systems supply service to everyone, and (2) they found that regardless of circumstances that if there are enough homes out there, whether or not 35 or 42 or 58 percent of them are going to subscribe. We didn't have that history back of us so we really didn't know. So we would go out and actually pre-sell before we go.
ALLEN: What about developers? Did they use cable as a way of selling homes?
FUQUA: Well, not to my knowledge. Not in the early years, they didn't. Cable really didn't became a, for want of a better descriptive term, a household term until maybe the '70s. I don't believe during the '50s and the early '60s that cable was a household term. It may have been in some of the older areas of cable, your state of Pennsylvania for example, where there were many of them. There may have even been a little of that in West Virginia. But certainly in the suburban areas surrounding major cities, cable was not heard of until the late '70s.
ALLEN: But in Bluefield it was the only way to get a television signal.
FUQUA: That is true. But I don't recall, of course, even in those days Bluefield was not a very dynamic growing town because it was totally dependent upon the coal industry. It had no other source. There was no other industry, and the coal industry was so volatile in those days that I believe from the time that we started the system in Bluefield, I doubt that Bluefield grew at all. In the mid 1950s, Bluefield and Bluefield, Virginia, probably had somewhere around twenty‑two or twenty‑three thousand people combined. Today they probably don't have fifteen thousand people combined. So I think that there was a shrinking of the total population. Not that there were no new homes built, but there weren't any developments where there were one hundred fifty or two hundred or three hundred homes. Most of the contractors were on an individual home basis. I would imagine that we put in cable in all of those homes, but probably couldn't have been more than a hundred a year I guess in Bluefield, if that many.
ALLEN: How did you look at the industry as a future way of making a living? Bluefield was not a growth community. At some point in time you were going to pretty well build everything to be built in there. So were you looking at it as a career?
FUQUA: Well, it seemed to me that, and in some degrees I was right and in other degrees I haven't been, but I always thought that the other services that cable would get into would be more income producing. In the early years it was really the expansion of the cable that generated the income. I suppose although there were a lot of little communities around Bluefield, and it would have been easy for us to go into them, I guess we had our cup full trying to pay for what we had, although in those early years you could build a cable plant for $l,500 a mile without any problem. Today you are lucky to be able to build it for ten or twelve thousand dollars a mile. But, at $3.95 you also didn't get a very good return, if you only had eighty or ninety homes per mile as opposed to the rate today average of what $23 or $25. I always thought that the origination of programming would be much greater in cable than it ever developed out to be.
Later on in my cable experience, we had two such operations, one in Winter Haven, Florida, and one in Pittsfield, Massachusetts, where we really made quite an effort to operate a self contained television station if you will. We really never, I guess, had the money or put the money into it that we probably should have to get a full test. But most of the cases it's proven, unfortunately, that that hasn't been true. I guess the Rochester, New York, experiments going on now are going to prove to be interesting. But, I always thought that that was going to be big income producing dollars for us and it never was. I thought the use of, for example, central banking, using the communication facilities of the cable would be much more important than they were.
In fact, in the early years I tried to get IBM interested in Bellows Falls, Vermont, where we had, I think 96 percent of all the homes in Bellows Falls on the cable. We tried to talk IBM into coming in and seeing if they couldn't set up a charge system that involved all the grocery stores, the drugstores, and the clothing stores, and all the retailers, where you as a cable subscriber would merely have your cable card and you would give it to the guy and he would stick it in his machine and it would credit the bank account of the retailer and debit the bank account of yours. I always thought that those were the kind of services that cable was going to involve in. It never dawned on me, to be perfectly truthful, that the entertainment source of it, the magnitude of it, the pay television and sports and all weather and all those channels would ever become so valuable.
ALLEN: Some of the early pioneers were looking at community antenna television and you were already looking at cable television which is really an extension of the community antenna concept.
FUQUA: Right. I could never, and still to this day, haven't been completely convinced, I guess. It just never dawned on me that to have the only transportation circuit in town that could visually send something, not audibly because you had the telephone then, that could visually send messages from one part of town to the other part of town wouldn't be much greater use than what it turned out to be. I mean from other types of services. They just didn't pan out. Probably it may be just as well that it didn't. I guess the entertainment value of it has proven so effective in such a great need at least from the people's standpoint that those things sort of got by passed. Maybe one of these days they will go back to it.
ALLEN: Well, advertising has been a driving force in the development of cable and programming becomes the vehicle for advertising.
ALLEN: When Philco walked away from the Bluefield system and you got involved in it, you were trying to build a three channel system?
ALLEN: And that was in the early '50s. When did you begin to upgrade from three and then how far did you go, did you go from three to five, or three to seven?
FUQUA: We went from three to five. It seems to me that we didn't go to the five until about 1955. We had three channels I recall for quite a lengthy time and then we...
ALLEN: Were you cherry picking stations at that time or were you locked in on three stations?
FUQUA: Well, there were only three stations available.
ALLEN: The only ones you could get.
FUQUA: Yeah, that's right. The only reason that we went to five is that a couple more stations came on the air. But, there was a fellow from Pennsylvania, by the way, who I don't know if he ever really got his just dues in the manufacturing of the cable system or not, a fellow by the name of Luther Holt. Maybe you have heard of Luther.
ALLEN: Yes, you talked about him at our first interview.
FUQUA: I think we used Luther's equipment for the five channels. We were Jerrold at that particular time and then went to Luther Holt's five channel equipment. Once you left the five channel equipment then you went into what was truly broadband amplification. The three and five channels were done by actual strips. Each one of those strips, if you would look at an amplifier, it would have a strip, its own little amplification which was Channel 2, Channel 3, Channel 4, Channel 5, etc., and once you left that, and I believe that I left Bluefield before we went to 12 channels, as I recall it was still five channels when I left Bluefield.
ALLEN: So it was Luther Holt who was your equipment supplier then for upgrading to five?
ALLEN: And Boots, your engineer was still there and working with Holt and designing the system? And do you know how big Holt got as a supplier?
FUQUA: I would think that probably for a period of three or four years, maybe somewhere between when Jerrold was having a lot of problems with their court cases. Jerrold had an interesting concept. They, in essence, by selling you the equipment also helped set up your operation, and it was almost like they were franchising. For a period of time they literally got a franchise fee from you and finally someone took them to court over that. It turned out that that was broken up.
ALLEN: You did mention that, but I didn't think to ask whether or not that was the only way they would sell you equipment, or if they really did the setup on it as well.
FUQUA: I am reluctant to say that was the only way. It seemed to be the way they did with us and I know with a lot of other cable systems operated by people I know. There might have been those out there that didn't. I think that during that particular period of time is when Holt probably became more visible because he was another force. I think and I may be wrong, you may want to check with Strat, but I am not too sure that Luther Holt wasn't the one who devised the first tap-off device that you could actually touch a center conductor on a coax cable and take off some signal without distorting the signal that went on through it. I believe he was the guy who created that first concept. But, Strat would probably know better than I would. It was Luther Holt.
Then there was a company up in Boston called Spencer‑Kennedy who I think had been in making test equipment and they got into the cable business about that time. So it began to spread its wings a little bit, but...
ALLEN: Jerrold was still the dominant force.
FUQUA: Yes. In fact, I guess Jerrold was the dominant force almost throughout the history of cable television until present day time. I think Scientific Atlanta probably has squeezed by Jerrold in the last three to five years as the leading equipment manufacturer. I think Jerrold still has a big share of the market, although in those days they probably had 80 percent of the market. Today, I would assume, I haven't seen any figures lately, but today there are only two predominant manufacturers; Jerrold and Scientific Atlanta. Scientific Atlanta probably has 60 percent and Jerrold has 40 percent in that order.
ALLEN: So in the mid '50s you upgraded from three to five channels. How long did that take?
FUQUA: Well it was interesting. It was sort of a lot of fun in a way. We were trying to figure out how we could do this work and not disrupt the people's viewing. So what we tried to do was to do most of it at night. We would work, not all night, but usually from 9:00 o'clock at night until maybe l or 2:00 o'clock. We had a little Jeep that had a conversion unit in it and as we would work through the system, where we would stop--that little Jeep would be parked all night long. It had a generator in it and the lines would come down from the utility pole which was carrying five channels, go into this little conversion unit and from that point on where we hadn't serviced yet would be three channels. So we would build‑‑put in eight or ten pieces of equipment and then stop and have our little Jeep parked there underneath an amplification box and then the next day proceed.
As I recall, it probably took us about three months to do that, and I have to smile because one of the projects that I was involved in as a consultant last year was for the local cable system here in town where we did basically the same thing except we worked from midnight to 6:00 a.m. I had four construction crews working at that time and I took on this project. We did l,500 miles in six months, so I guess that shows a little bit of the difference, but almost the same process.
ALLEN: How many miles of cable did you have to rebuild?
FUQUA: In Bluefield, fifty.
FUQUA: Yeah, as I recall. It was right on fifty, maybe fifty‑one miles, but fifty I think.
ALLEN: And then, shortly after that did you leave Bluefield or just become involved more in other activities of the parent company?
FUQUA: Well, Bluefield was actually sold to a company by the name of National General Corporation which was the old Fox Theatre group out of California.
ALLEN: And this was in when?
FUQUA: This would have been in about 1958.
ALLEN: Just as an aside, what motivated the company out of Connecticut that owned it to sell it at that point?
FUQUA: The rate of return probably was not that good at that particular point in time. They had been in it for two or three years. They probably had invested...well we can figure out pretty fast I think roughly what they had. I would assume with the fifty miles of plant and let's say including the headend equipment and the equipment that you would have to have was $2,000 per mile. So that was probably $100,000 of capital and they probably were spending at the rate of maybe 35 or 40,000 dollars a year. It wasn't a high cost operation. When I took over, they only had three hundred and some customers. I said their breakeven point was 1,200 customers, I think, or about $4,740 a month. Well, that's not a great deal of money. I am just going to say by this time they had $200,000 invested and even if they had 1,200 subscribers they were only breaking even. It seems to me that they had about 1,500. So at that rate they were not getting rich, just to get their money back out of it they probably could have done better in CD's to be truthful. It was not a great investment.
ALLEN: Had they owned properties‑cable properties elsewhere?
FUQUA: They owned the property initially in Bluefield and Clarksburg; Fairmont, West Virginia; Williamsport, Pennsylvania; and Muscle Shoals, Alabama.
ALLEN: Did they sell all the systems?
FUQUA: Yes they did.
ALLEN: All to National General?
FUQUA: No, they sold them to various people. Actually the Clarksburg system which was Strat and Sandford Randolph's key mark in the industry was the one over which all of the copyright lawsuits were based in cable television. It was sold to an investment group out of New York. NWL Corporation I believe it was. Nathan W. Levin was the company. Then, in fact, Bluefield was sold to the NWL Corporation. Then the NWL Corporation spun off of Bluefield, Muscle Shoals, Williamsport, and kept Fairmont and Clarksburg. I forget, let's see, I forget who Williamsport went to. Well, actually it went to National General. National General was a theatre company that had in those days more theatre buildings I guess than anyone else in the country. I became their, for want of a better term, "Technical Director." They didn't have anybody at National General that knew anything about cable at all. Because they owned these three properties, and it turned out later they would own five properties in the east, they decided that they would have someone so I became sort of a, for want of a better term, district manager. They gave me the title of "Technical Director." I never quite understood that.
ALLEN: Well, it was because of your extensive technical knowledge.
FUQUA: Probably so, I could spell amplifier.
ALLEN: And were you located in Bluefield?
FUQUA: In Bluefield. That is right. I stayed with them until 1962, I think this is right.
ALLEN: And what were your responsibilities as technical director?
FUQUA: Well, I looked after the Bluefield system and I also looked after the Williamsport system and a system up in Alpena, Michigan. We bought a system in Logan and then one in Mann, West Virginia. I am trying to think where else, it seems to me there were more properties than that, but right off the top of my head that is all I can remember. We rebuilt some of those because they were in sort of a state of disrepair or disarray really. That was my primary job to look after those.
ALLEN: So you were the resident manager at Bluefield and the General Manager of the others.
FUQUA: Right. Correct.
ALLEN: Did you travel?
FUQUA: Yeah. I would get to the other systems at least once every six weeks.
ALLEN: And those were fairly remote locations.
FUQUA: They were, and I would go in and spend a couple or three days, usually with the managers. I had known all of them, and all of them were close friends of mine, which at times was a little bit difficult once I became their boss, but it was taken pretty well I think by all of them.
ALLEN: Who was managing Williamsport?
FUQUA: Ray Schneider was at first. He died a couple of years ago. Then it was a fellow by the name of Hank Lockhart. Henry Lockhart. I don't know where Hank is today. There was a, I can't even remember the guy's name up in Michigan. There was a fellow by the name of Jim Vickers who is here in Florida today actually, who ran the Logan properties. I guess that's it.
ALLEN: How did you get around? Did you drive?
FUQUA: No, I would drive to Logan, West Virginia, but I flew to Williamsport and up to Michigan. I keep thinking there were five companies and I can't remember where the fifth was, but maybe not.
ALLEN: So when you say you flew into Williamsport from Bluefield, were you a charter or did you own your own plane?
FUQUA: No, probably fly into Philadelphia and get an U‑Drive‑It or rental car and drive on up to Williamsport.
ALLEN: Because there certainly were no nonstop flights from Williamsport to Alpena.
FUQUA: Oh no, that's right. It was sort of funny. We tried to buy a radio station not too long ago in Williamsport, WWPA, which has been there almost since Williamsport was. During the course of the discussions with the bank, there was a fellow sitting there in the room who the more we talked all of a sudden I realized that I had met him some time in the late fifties. This always sort of shocks me in seeing somebody like that, because I didn't recognize him, and he didn't recognize me. The more we talked all of a sudden it dawned on us that we were at the same place on a couple of occasions where I had met him and he remembered the person, not the name or even me, but the appearance. I guess my lack of hair probably threw him.
ALLEN: You have black hair. It just slipped down to your chin.
FUQUA: That's true, that's true.
ALLEN: What was going on in the cable industry? Were there things in Williamsport different than they were in Bluefield, different than they were in Alpena or was everything pretty well the same?
FUQUA: Well, interesting enough, in those days your growth or lack of it was usually dependent upon the availability of over the air signals. In those days, we really didn't offer anything other than better quality of the same signal that you could get over the air. The worse the quality was to the homeowner the more profitable or successful the cable property was. And as I recall, Williamsport struggled a little bit only because they had a station out of Pittsburgh and maybe a couple of stations out of Philadelphia that got a little signal into Williamsport. I guess Williamsport must be 125 or l50 miles from those two towns.
ALLEN: No, I don't think they could have gotten anything from Pittsburgh, maybe Scranton.
FUQUA: Maybe Scranton. Maybe it was Scranton.
ALLEN: Scranton and Allentown would have probably been the two closest.
FUQUA: But they were a little ahead of the West Virginia properties as far as the local people being able to receive television, so that Williamsport struggled a little bit from that standpoint of over the air competitiveness. Alpena, Michigan, was one of those places where they just didn't get any signal. It was almost like Bluefield, and they didn't get television. The thing that probably slowed Bluefield's growth interestingly enough as much as anything was that low and behold Bluefield had its own television station and how that television station ever survived I will never know.
ALLEN: When did that come on the air?
FUQUA: It came on the air probably in the early '60s. It was put on the air by the people who owned the predominant radio station in town and also owned both newspapers in town. They became the television station owner and it was one of the first ten or twelve cross ownership cases that was brought up before the FCC. I don't think they were ever brought into court or carried up before the FCC. I think the FCC gave them all the indication in the world that they should break up the monopoly. It was funny. That station came on the air, and it was an NBC affiliate, because their radio station happened to be an NBC affiliate, and for a period of about six months it really slowed the growth dramatically of the cable system in Bluefield. It is almost like people were waiting to see if that was going to be enough television for them. Williamsport never had that problem nor did Fairmont have that problem. Clarksburg, West Virginia, had a little bit of the same problem because they had a television station that went on the air up there.
So Williamsport, after its momentum got going, probably outperformed the others because it had no local television station and still doesn't until this day.
ALLEN: What channel was Bluefield?
FUQUA: Channel 6.
ALLEN: Channel 6 had a good spot.
FUQUA: Yeah, they did, they did. And, I guess they ran it and it was, I must say, if we had origination on the cable we could have done I believe as good a job. It was just sort of a crossover from the radio station. It was good enough to stay on the air and they made some money out of it, so and sold it a few years ago for beaucoup million dollars.
ALLEN: Were they taking exclusively NBC programming?
FUQUA: No. In those days most television stations could cherry pick just about at will. As I recall, in those days it was NBC and CBS. ABC was such a weak third partner out there that people paid very little attention to it. They may have had some ABC programming because ABC would let anybody in the country have it that wanted it in those days. So it was probably NBC and ABC with some mix of CBS. They would pretty effectively get the programming that seemed to have an appeal to the audience. I am not sure whether or not they were good marketing people at that particular point in time or whether they were just picking up whatever they could pick up.
ALLEN: How long did it take you to get the growth going again in the Bluefield system after the station came in?
FUQUA: I think about six months.
ALLEN: That wasn't bad.
FUQUA: No. They came in with enough fanfare and hoopla as you would well imagine. Here were people who were literally starved for television and all of a sudden by placing rabbit ears on their television set or at least a very minimal antenna, they could get a great picture. Well, they had never had that before, even when they had the picking up of the Roanoke stations or trying to get the one out of Huntington. The quality was never great. We were always much better than the over‑the‑air quality, but all of a sudden here they had a station right in their back yard. I think that was probably as responsible as anything else. All of a sudden they had as good a picture or even maybe a better picture than we had on the cable.
ALLEN: What did you have to sell them at the end of six months that was better than the television station?
FUQUA: Well I think, just then, more of the same. That's a little tougher to sell I think. Had we had an independent station in those days like we have today, I think we could have gone to town, you know. But, we didn't and we just had more channels.
ALLEN: Were all of the properties that you were then general managing turning a profit for National General?
FUQUA: Yeah, all of them had had a profit factor. They bought those properties in those days, you will get a kick out of this Bob, a good purchase price‑‑a good purchase price for the seller and the buyer of cable properties in those days was four times cash flow. That figure today is probably twenty times cash flow. But in those days if you had $50,000 cash flowing you could sell your system for $200,000. I mean you could make a great deal, and the buyer could make a great deal you know. That gave him for all intents a 25 percent return. Well the 25 and the 30 percent return is the neighborhood of venture capital people today. But in those days, because it was a new industry and the thought always was that somebody was going to come out with an invention that all of a sudden everybody could get all of the television they wanted for nothing. This thing called "satellite television."
ALLEN: The people didn't know what it was called.
FUQUA: That's right. Something was going to be up there in the sky.
ALLEN: Did you at this point still see a good future for cable?
FUQUA: Yeah. But I would be telling you an untruth if I told you that, "Oh yeah, I knew that one of these days was going to." I had no idea that it would reach the magnitude of what cable is today. And I think very few people in the early years did. As I say, the route that I would have probably taken, had I had various routes to follow would not be the one that has made it successful. I would have taken the one that would have brought in the other services into the home that I talked about a little bit earlier.
ALLEN: Were there other people in management like you who were trying the other services?
FUQUA: Well, not many, not many. When I went into New York, I was constantly trying to come up with new services for the systems only because I guess I didn't have the foresight to see what it would grow into. Maybe the younger echelon that is in today, the presidents and vice‑presidents saw that where I didn't see it, but I didn't see it at all in those days. I know that one of the things that we tried to work up when I was in New York was with the Wynn Dixie stores here in Florida. This was the concept of shopping from home and this was going to be for groceries. We took a warehouse of Wynn Dixie and decided that what we could sell was that it would take too much on television to show a can of beans and a can of corn or what have you, but we could see fresh meat and vegetables and dairy products. So we set up a camera on a little dolly and we set up a display in the warehouse and this would go on television. It would show you a cut of lean meat, well let's say it was pork loin and it was $3.l6 or whatever. The thing was merely to increase your appetite for shopping and to give ideas.
Then we had a woman who was basically the narrator who was a dietician who would tell you what all was in these things. Then we were going to send out credit cards to all of the customers that were on the cable system. This credit card would allow you to turn on your television and you could order your groceries. You would get in the mail every week a list of the basics, can of Campbell's baked beans 68 cents or whatever they cost, and you could order those things by picking up the telephone and then they would deliver them. You had to have a minimum purchase, I think it was either $12 or $15, I can't remember what that actual figure was, but I believe it was $12 or $15. You could order your food and it would be delivered. As you probably remember maybe from your childhood years ago, all groceries, not all, but a big percentage of it was delivered to the home. I thought this idea was the greatest thing since "Wheaties" or "Pop Tarts" or what have you.
And it really fell apart because we could never decide, as silly as this may sound, on the proportionate share of income. You know I guess more great things are lost or not underway because of that. More entrepreneurs never get their product to the market only because they can't conceive of anybody else having a portion of the profit. That was our big problem with Wynn Dixie. The cost was not going to be so prohibitive, although their responsibility was going to be to take care of having food items everyday and all of that. The mailing and the cost of the credit cards wasn't that prohibitive. I guess we were going to do it in Winter Haven, Florida, so we probably had, oh, five or six thousand subscribers down there. It was going to end up probably costing, if you had the right kind of credit cards probably $25 or $30 per subscriber to implement this. But it never really got off the ground because we could never decide who got what. The grocery margin evidently is so small whether that is 1 percent or 2 percent or three per cent, I am not sure what that profit factor is, but it was so small that by the time you took in your cost factor for delivery of the products we got down to half of one per cent and the grocery guy was saying, "Well, why in the world do I want to operate on this basis?" That is what really stymied that. But those were the kind of services that I had thought that we would be involved in.
ALLEN: In this period when you were the Technical Manager for National General, I think you said late '50s or early '60s, was National General looking at other properties particularly in the northeast?
FUQUA: They had a fascinating guy who was an attorney and if I think of his name, Bob, I will tell you as it goes along, but he was employed by a guy by the name of Gene Klein. Klein, who then owned the San Diego Padres, was the owner or the president and chairman of the board of that company. He had made his money basically on having for a period of about four years the sole distributorship of Volvo cars coming into the United States so that every Volvo car that came in he got "X" number of dollars from it. I guess that made him in essence a very wealthy man. He hired this guy Sam Norton, that was his name, who is an attorney and who was a very dynamic kind of guy. I always liked to go with him and watch him negotiate for cable properties. He would say to you, "Bob, how much is your cable system worth?" and you would say, "Well, I think my cable system is worth $700,000." How many customers do you have, and you would tell him, and he would say, "okay," and he would take his checkbook out and he would write you, Bob Allen, a check for $700,000.
He bought two or three cable properties just like that, hand you the check and he would say, "now we'll get the contract here wrapped." He was an attorney. He said we will write the contract today and have it signed before I leave town. Of course, the company would deposit the money into this account that he wrote the check on. He was quite a character, but he was a dynamic fellow.
End of Tape 3, Side A
ALLEN: All right, we are on Side B of the first tape recorded on Friday the 5th of January 1990. Gordon, do you want to continue with the National General years.
FUQUA: Okay. So Sam Norton was quite a character, a very high energy level fellow, very dynamic in his concepts. He could envision a plan for National General which turned out I think to be all right although he got fired somewhere along the line. His plan was that there wasn't any reason why they couldn't build up subscribers very fast if they had better marketing and heavier marketing concept. If cable systems were to be bought and sold on the basic number of subscribers, why they couldn't build all of these properties up in two or three years and then turn around and sell them. It was not his idea for them to be into any property long range. He didn't have any great concept to have Fox putting movies into the home or what have you, but just that he thought that it was an easy business in which to increase rapidly the value of the business and to a degree he was right.
That is what has happened since with the cable industry. The value per subscriber keeps going up as the growth of subscribers increase. It has been a double dynamic factor I think it goes in almost the square of itself. But, Sam was quite a character and an interesting guy to work for. You never had to worry about any kind of decision out of Sam. He would usually give you a decision before you could finish asking him, one of those kind of guys. I have to tell you an interesting story because he laughed about it afterwards. I saw him after he was released. He had been very successful in two or three areas for Fox or for National General. One of the stockholders who owned 10 or 12 percent came to him and said that they were not too happy with Gene Klein who was then Chairman of the Board and wondered whether or not he would be interested in a buy out with this particular stockholder and a couple of other people.
I don't know that if in those days it was as much a buy out as it was a putout. They were going to get rid of Mr. Klein. So he joined forces with that group I think and Klein found out about it somehow lined up his 51 percent or more. Sam told me sometime later he went in to the meetings as he served on the Board of Directors and his seat was always next to the Chairman. He sat to his right or left, I forget which, when they had a regular director's meeting. This particular day, Sam walked into the director's room and there sitting in his seat was a guy leaning over talking to somebody and he walked around the table and said to this fellow, "I believe you are in my chair." The guy looked up at him and he said, "No, no you don't have a chair." And that is how he knew he was canned. So, National General held onto the cable properties for some particular period of time. I left before National General sold them. In fact, I think they broke them up and sold them to various people.
ALLEN: But they were continuing to buy more property.
FUQUA: Yes, yes, and where all those properties were, not being associated with them, it is hard for me to remember.
ALLEN: Did you get additional responsibility with National General?
FUQUA: No, I left just as they started on the other acquisitions.
ALLEN: So they didn't buy anymore while you were there?
FUQUA: No, I think the Logan‑Mann, West Virginia, property was the one that I remember being with him when he bought, and I got that one, but I am sure they bought more after I left.
ALLEN: So you left after National General in '62?
FUQUA: Uh, huh.
ALLEN: And what was the next step in your career?
FUQUA: Well, I was serving on the Board of the National Cable Television Association at that time. There was a fellow who had asked permission to sit in on the board meetings to learn more about cable television by the name of Alfred Stern. Alfred was formerly a vice president with NBC International and his role with NBC International had been to set up all the television stations in foreign countries that used NBC films. He also got NBC into the underwriting of two or three Broadway plays mainly, "My Fair Lady." It made a lot of money for NBC. Very, very, bright young guy, a member of the Rosenwald family which was Sears and Roebuck, the founders of Sears and Roebuck. Alfred had decided that he wanted to go into cable television and because he had a huge trust, at least huge in those days, probably not today, had purchased some cable properties from Charlie Sammon's group out of Dallas, Texas.
He had employed the Daniel's Company (Bill Daniel's Company) who then had as his partner a fellow by the name of Carl Williams to manage those properties. Al was not at all satisfied with the management process that was going on so he decided that maybe he had better get involved himself in the business. He attended the National Cable Television Association Board of Directors meetings. You would see him sitting back in the corner. He was a very shy fellow in those days, in his early '50s. Very bright guy, but a very shy fellow, and during the course of some of these meetings I met him and one time we had dinner together. He told me what he was trying to accomplish and asked was I interested in coming to New York.
Of course, although I traveled for National General at that time out of Bluefield, the thought of moving from Bluefield, West Virginia, to New York City was almost more than I could even think about. It frightened me even to think about it. But, after some period of time he convinced me that what he would like to do was to have me go to open up the headquarters in New York City and take over the management from the Daniel's group. He had a contract with them that expired sometime in the fall, because I think I moved to New York in midsummer.
ALLEN: Fall of '62?
FUQUA: Yeah. And took over the properties in the fall of '62 and that was quite a shocking factor to me. We had in those days I believe eight properties (cable properties), but we only had four managers. Four of the properties didn't have managers. Bill and Carl were not well organized to have a management company. They just sort of let them run.
ALLEN: They were working out of Denver.
FUQUA: Yes. Very seldom, if ever, did anybody come east to look at the properties. They had a three million dollar loan with Chase Manhattan Bank which was way overdue and even the interest hadn't been paid for three or four months when I came on board. I had wondered at that time what in the world a dumb West Virginia hick was doing in New York City with a company like this. But Al was very good about it. I don't know if it was that he was bright or if he was frightened, but he sort of said to me, "Gordon, here is what we got, now you take it and do what has to be done." This allowed me to put together my own staff in New York. I think in a period of about a year I fired the other four managers and hired new people and got the company going.
ALLEN: Before we move into that, let's go back and talk a little bit about organizational footwork. You had been one of the founders of the West Virginia Cable Television Association.
ALLEN: And when were you elected to the NCTA Board then?
FUQUA: Well, let's see, I actually served on the NCTA Board for twelve years so I can probably move backwards better than I can forward. I left New York in 1970. The last two years while I was in New York, Al Stern was Chairman of the Board of the NCTA and I was not on the board because I think they had a rule. That would have been 1968, would have been dated eight back to 1956 or 1958.
ALLEN: So it was almost as soon as the West Virginia Association was formed.
FUQUA: That is true.
ALLEN: Was West Virginia then affiliated with NCTA and were you elected at large or were you...?
FUQUA: No, elected at large. But, it was sort of funny. In those days the West Virginia and Pennsylvania cable operators were I guess, in the eyes of all the other cable operators, thick as thieves. In fact, they call the West Virginia group the West Virginia Mafia. At one time we had Sandford Randolph as Chairman of the Board of the NCTA; Bill Adler from Weston, West Virginia, was the Treasurer of the NCTA; Gordon FUQUA: from Bluefield was Secretary of the NCTA. I am trying to think if we didn't have somebody else on it, but anyhow they called us the "West Virginia Mafia" because we knew so many people and we were in real good with the Pennsylvania group. If you would take the West Virginia and the Pennsylvania members of the NCTA that was probably in the early days, 60 or 70 percent of the members, because the guys out on the west coast hadn't gotten big enough yet to really begin to be active. The other states were sort of sparsely filled. The West Virginia Mafia and the Pennsylvania Mafia I guess, as we were called in those days pretty well controlled the elections and that is the reason we stayed on the board so long.
ALLEN: So you went on the board in about '56. Who were some of the people that were on the board at that time?
FUQUA: Oh, gee. Well as I say, Sandford and Bill Adler; a fellow by the name of Bruce Merrill who started AMECO which was a manufacturing company out in Phoenix, Arizona; Fred Stevenson from Fayetteville, Arkansas; George Barco from Meadville; and a fellow by the name of Randy. There were two Randy Tuckers in the industry, my partner who served on the board and then another Randy Tucker from Stanton, Virginia, who was on the board, Polly Dunn from Mississippi.
ALLEN: Columbus, Mississippi.
FUQUA: Columbus, Mississippi. Marty Malarkey from Washington, D.C., Archer Taylor who is Marty's partner, was on the board. Irving Kahn was on the board. Bill Daniels.
ALLEN: And what was the staff of NCTA like at that time?
FUQUA: Well, you know it was funny, of course Strat as you know started the NCTA. For years it was Strat and his secretary. Then I think Strat's firm, or either he merged with a firm, I think it was Smith and Pepper. I am not sure if the Association was ever very large with Strat or not. I don't ever recall Strat having a great big staff. Strat might have had a total of five people as opposed to whatever they got up there today. But I think when Strat left, they hired a, oh gee, I believe a guy by the name of Don Tavener. I am not sure, it might have been somebody else.
ALLEN: I think Ed Whitney came in.
FUQUA: Ed Whitney, that is right.
ALLEN: He was the first full‑time paid executive.
FUQUA: That may be.
ALLEN: Were you on the board at that time?
FUQUA: Yes. It seems to me Ed came to us from the airline business, from American Airlines, or Capitol or Western.
FUQUA: Yeah, I was on the board at that time.
ALLEN: Do you have any recollections of how Ed was chosen?
FUQUA: No, I don't. I know I was on the search committee on two occasions after Ed left when we were looking for new presidents of the association. I guess maybe that was when we hired Don Tavener.
ALLEN: He came from public television in Pittsburgh.
FUQUA: Yeah. A very competent, able guy who was not a very good politician within the industry itself, but a very competent guy. He was always being shot at by somebody because he was not a good politician. He didn't know which side to butter you know. I forget who replaced Don, oh yeah, it was a guy by the name of Bill (oh, I can visualize the guy now) who was an association guy in Washington. I forget, he had been with some other association. I remember interviewing people for the job. One of the guys we interviewed really made quite an impression on me. You know you hear about people walking into a room and having a certain amount of charisma about them, and this guy did. You see him on television periodically, Bud Wilkerson, who was the football coach at Oklahoma.
We interviewed him and I never will forget that evening. There were like four members of the interview committee and he was so dynamic and had such charisma that I forget, I think we forgot what we were talking about. He just sort of took the play away from us totally.
ALLEN: He interviewed you.
FUQUA: That's right.
ALLEN: Was he at Oklahoma at that time?
FUQUA: He had finished. He was not coaching. He was, I think, serving on a presidential commission for good health or one of those kind of things.
ALLEN: Did you decide to offer him the job?
FUQUA: Well, we couldn't come close to the kind of dollars that he needed, or we would have. Everybody was just taken aback with that guy.
ALLEN: What were some of the issues that NCTA was facing in the late '50s when you were the first one on the board?
FUQUA: Well, most of them dealt with our two arch enemies in those days. Of course, the telephone company was above all the worst enemy. The second were the broadcasters. Actually, we were sort of ignored by 90 percent of the broadcasters. We were just sort of a little blister that somebody would lance and it would go away. I don't think it ever dawned on the old television station owners in the '50s and '60s that cable would ever be any more than a pain in the butt you know. They could see that, we would be back there in the hills where the signal doesn't get in too good, but it will never be anymore than that. You know, why in the world would people want to pay for cable when they have got us? The telecasting business has always been I think a highly profitable business. Profits I guess to all of us probably cloud our foresight and it certainly did the broadcasters. They in essence fought us tooth and nail from whence the first big copyright suit came at the instigation of the NAB.
But, the telephone companies were by far our largest enemies. They could see us much more logically becoming a competitor than could the television stations. I remember talking to, at that time, he was the Senior Vice-president, Brown who is formerly the chairman of the AT&T or is now, I am not sure which.
ALLEN: Do you remember his first name?
FUQUA: No, I don't. It was at a cocktail party in Stamford, Connecticut, where he said to me, "You know most of the things that you people are doing we have done in our research and development lab for several years. If we knew that the only thing you were ever going to do was just to transmit entertainment programming through that cable one way, then we would not ever give you a problem. But that is not what you guys are going to end up doing, you are going to end up doing far more than the transportation of television entertainment programs." So I think AT&T could really see what the future of cable might be and they fought us tooth and nail.
ALLEN: How did they fight you? What kinds of tactics were they using?
FUQUA: Well, they started out in some parts of the country just refusing to let you go on their poles. In those days the cost of underground construction, the differential between that and overhead construction was so heavy that most cable systems, if they had to go underground would not build a cable system. They just couldn't conceive of that cost ever being reasonable as far as getting a good return from it. We were sort of at their whimsy on whether they were going to let us on the poles or not. They also did a really smart thing in a lot of the parts of the country by contracting with the local electrical power companies. They would have joint use pole agreements except the telephone company would say we want thirty-six inches on your pole and we want to be the ONLY communication mode on your poles. We would go to the electrical power company and they would say, "Oh fine, we would be delighted if you got it." They didn't care as long as we didn't interfere with their safety specs. So then they would get out their contracts and say, "oh golly, wait a minute, you have got to be in that thirty‑six inches that we already assigned to the telephone company and we have an agreement for forty years."
Those were long term joint poles agreements between the power company and the telephone company. You would have to go and see the telephone company, so even though the power company owned the poles, the telephone company controlled them. So the telephone company in essence controlled where cable was going to be. So almost the biggest and most important committee was the Pole Line Committee. A fellow by the name of Ben Conroy chaired that committee for two or three or four or maybe seven or eight years and did a great job. They were constantly battling with AT&T. You could say all you want to whether it was North Carolina Bell or Florida. That had nothing to do with it. They didn't have anything to say about it. It was AT&T out of New York and whatever AT&T said is what went.
They were constantly negotiating with AT&T in courts, in front of public service commissions, in front of local city council people, and AT&T and the Bell Systems are doggone good politicians. I mean they had spent years developing their relationship with the public utility people in every state. They knew Bob Allen's wife's first name and her mother's name and her sister's name, and how many kids you had, and how many grandchildren you had, and probably had met a lot of them. When you went in to do battle with those guys, you were on their turf even though it might be a public service commission. We never won any great battles where they said, "okay." It was inch away, inch away. They would let us get on their pole at a fee of $2 per pole or $1.50 per pole. Out on the west coast, I think primarily is where they did it, not in the east as much as they did on the west coast, you would be on and then one day they would say to you, "Well, that rate is going to be $12 for next year." Twelve dollars, you know!! So we would be back in court on that.
I don't know that there were ever many great court suits because I think the Bell System felt that they were not in public scrutiny in the kind of light that they wanted to be seen. But, they sure gave us a hard time.
ALLEN: Were there any cable systems that put their own poles up?
FUQUA: In little towns. To my knowledge, there may have been, I'm trying to think.
ALLEN: Were you ever involved with one?
FUQUA: Yeah. Well, I owned one where we had our own poles, down in Kimball, West Virginia. But this is where we had only five hundred customers I think. We had bought the poles. There were a lot of companies in those days that erected pole lines for coal mine operations that have their own generating capacity. They would also buy power from the power company and then convert it to either DC or AC or whatever for the use in the coal mines. As I recall, in that little town the average pole spacing is one hundred to one hundred fifty feet. I think because we were only like twenty feet high and they were forty feet, we had to have them every seventy‑five feet. We built it like that but there wasn't much of that going on. There were a few places and I wish I could think, because I think one of them was in Pennsylvania, but I am trying to remember, because I think they made a "U" Pole or "T" Pole, painted them green as I recall and ran them right along the same line with the utility company. But, most cities were reluctant and you can't blame them from a ecology standpoint, or at least from an appearance standpoint, to allow you to put up another complete set of poles.
ALLEN: At that point in time there were also a lot of small local telephone companies. Were they following AT&T's lead?
FUQUA: Yeah. Primarily. I don't recall. You know, you had your big ones. I think United and Continental were two fairly good sized telephone companies. I guess they are still in existence. I don't know. Even they would follow primarily AT&T. But I don't recall having too much problem with the local telephone companies. That may not be true with other people. I don't think they had the foresight that the AT&T people did.
ALLEN: So it was uneven. Some of the local companies were pretty cooperative.
FUQUA: Yeah. You would go to the conventions or have hearings where people would say, "Well, we get along great". Even some Bell Companies didn't seem to get the word per se all the way down the line. In fact, in the little town by the name of War, West Virginia, in the AT&T Handbook, there was a clause that had been sort of overlooked, I guess, by most people where it said that, "If the telephone company desired, they would allow some other communication service to use their stranding." In other words, that metal strand that holds their lineup, if it were strong enough. In this particular little coal mining town, it was up and down hills wherever they had used stranding. The guy that had the cable system there or started went to the telephone company and said, "Look, can I just wrap the coaxial cable around the telephone line?" and they said, "Sure," so he did. Once AT&T found out about that they changed that clause extremely fast and almost had a heart attack I am sure. The idea of some cable guy wrapping his cable around their telephone line, but in little mining towns like that, you know.
ALLEN: So the two primary factors then, as far as NCTA was concerned, were broadcasters and telephone companies.
ALLEN: You have alluded a couple of times to the Clarksburg legal action. Do you want to talk a little bit about that? When did that take place and what was the nature of it?
FUQUA: Well, the Clarksburg case was the first copyright suit that was ever brought. It was brought by television stations I think out of Pittsburgh and the copyright owners of that program. It dealt with whether or not cable television was a pay system in that you're paying for a program. As a consequence they, the television station and they the copyright owners were not receiving their just amounts. Also whether or not it was truly a master antenna system where its sole purpose was the transportation of the signals. It was quite a lawsuit. Strat, of course, was deeply involved in that and I suppose probably spent as much time on that one suit as he did on anything that he ever had in his entire law career and probably as much as anything else in addition to his starting the Cable Television Association, really sort of put his name up in lights.
ALLEN: When did this take place?
FUQUA: It seems to me that it was in the late '50s, but I am not quite sure about that. Sandford and Strat both could give you better information on that than I could. But it went on for a year or two. The build up to it was a long drawn out process as you can well imagine. It cost everybody a lot of money, but the judge then finally ruled that truly it was a master antenna television system and that the copyright laws as then written were not applicable to the cable television system.
ALLEN: And your involvement in this, was it any more than as an NCTA Board of Directors President and Bluefield manager.
FUQUA: No, no. Sandford Randolph was involved, very involved and of course Strat Smith was. I think they were the two primary people, and of course, the Association had hired another law firm out of New York, and I can't remember that, but Strat will I am sure, that worked with us. I remember it was the allocation of the funds, of the money for that lawsuit. But, that was the primary lawsuit in those days.
ALLEN: Okay, let's go back to Al Stern's company. What did he call the company?
FUQUA: Television Communications Inc. People say that it was TCI, but it wasn't. In fact, TCI wasn't even in existence then to my knowledge. But it was called Television Communications Inc. or was it Television Communications Corporation? Once again, I probably have some stuff that I can probably check back on.
ALLEN: So it was either Inc. or Corporation?
FUQUA: Yeah. It was a Delaware corporation and started out owning eight systems and then grew fairly fast.
ALLEN: It had eight properties when you began as General Manager?
FUQUA: Yeah. Well, actually Vice-president of Operations.
ALLEN: Where were those eight properties?
FUQUA: We had....
ALLEN: If that's a fair question.
FUQUA: Yeah, if I can, you'll have to pardon me if I can't remember all of them. We had two in the state of Oregon, two in New Hampshire, one in Vermont, and two in Massachusetts. I think that's right isn't it? Is that eight?
ALLEN: That is seven. So nothing in West Virginia, nothing in Pennsylvania.
FUQUA: At that time. One in Virginia--Harrisonburg, Virginia. So that was the eight.
ALLEN: And you were responsible then for the operations of all eight of them.
ALLEN: The first thing that you had to do I gather from what you said earlier was to hire management.
FUQUA: Yeah, yeah. I don't want to say that Carl and Bill didn't do a good job, but their primary focus was on brokering of properties. In fact, in those days, I don't think they even had any of their own properties. They have had some in later days. Carl and Bill split off years after that, but they were to be terribly managed systems and probably Bill and Carl would smile about that today, because they were not managed. They were just out there. Because Denver in those days was seemingly so far away that even questions that were asked never got an answer to them. "What do I do about this?" and nobody knew. So it was sort of starting from scratch. It was, as I look back on it, probably the most exciting, invigorating time of my life because it was almost like starting anew and I had the choice of doing that by picking my people. It was fun. It didn't take us too long. We had to rebuild almost all of them which was the hardest thing because we didn't have enough income coming in at the time that I took over. We didn't have enough income coming in to even pay the interest at the bank.
How they had ever come up with the concept to talk the Chase Manhattan Bank into loaning them money I'll never know (they had this very wealthy fellow behind it). Even the projections that I saw didn't justify the interest payments much less the principal repayments.
ALLEN: How were you able to turn it around? You couldn't rebuild until you got debt service under control I would assume.
FUQUA: Well, this was a case of my being naive working to my advantage. I never will forget when I looked at the whole picture. It took me about a month I guess to realize what I had got myself into. It shocked me so much that I went down to the bank. Al had introduced me to the people at the bank, and I just called the guy one day and said that I wanted to come down and talk to him. I said, "It looks to me like we got a setup here that doesn't make sense, you know. We owe you guys, I think it was three million dollars and we don't even make enough money to pay the interest. The only way I can hope to pay this thing off is to get increases in rate in each one of these towns but with the kind of service we are giving, I can't do that. What I have got to do is spend another million dollars, I forget what the figures were, I don't believe it was a million, let's say it was a half a million, to rebuild the systems so that I can carry more channels and get the rate up so we can pay you guys off."
I remember in those days if you got a loan, you had to keep a bank balance, a compensating balance. This was the key financial trigger word in those days. You had to keep a compensating balance of like 10 percent or 15 percent or whatever they established. So we had like $400,000 in the bank, but this was the compensating balance. I never had even heard the word before. So I said to this guy, the first thing that I want to do is I would like to pay you guys to catch you up. We will take this $400,000 and I'll pay the back interest. That will catch us up and then I think we can go on from there if you will loan us another half a million dollars.
The guy looked at me and he said, really this is exactly what he said, "When did you leave West Virginia?" I said, "You know sixty days ago or something." He said, "You don't understand what a compensating balance is?" I said, "I never heard the phrase." He laughed. Anyhow, the results of it was that son of a gun if they didn't loan us the money. I must have made the right pitch at the right time. They loaned us the money and then after a relatively short period of time, somewhere between six months and a year, we were up and running and making our payments and beginning to spread our wings a little bit. So it was the right thing to do.
ALLEN: About how many subscribers were you dealing with in the eight systems combined?
FUQUA: Probably not more than ten or twelve thousand at the most.
ALLEN: Was there much in the way of growth going on?
FUQUA: There was pretty good growth. Well, no not at that time there wasn't because they hadn't done anything. In fact, there was sort of easy growth. I was sort of a hero there for awhile, not because I was that bright because I did what any other basic cable operator would have done. A lot of the systems didn't have any kind of promotion or marketing for a year or two and when we went in and began to create things by just beginning to rebuild and add more channels. All of a sudden, I had to make a lot of appearances before a lot of city councils. I got my behind chewed out royally almost on every occasion which I wasn't deserving but the company deserved it because of the service that they had given. So then things began to take off pretty good and we built up quite a staff. In fact, I am very proud that a lot of guys who worked for me have gone on to much greater better businesses.
ALLEN: These were people who were managers?
ALLEN: Who were some of those?
FUQUA: Well, my assistant who was a very bright young guy, a fellow by the name of Jack Gault who up until the last year or two was president of Manhattan Cable Television, one of the biggest cable television systems in the country. Barry Stigers, another guy who worked for me up in Massachusetts, is the key guy in the development of the biggest company that does all the billing for people, CABLEDATA Company. He was one of the original guys in that. A guy from out in Oregon, Derek White, went down and operated the San Diego system for about four or five years. This was in those days the largest cable property in the country. One of our guys went up and ran the Albany system. So a lot of them after they left forged out ahead into other great things which I was always extremely proud of.
ALLEN: What was Al Stern's role in the company at this point?
FUQUA: Well, Al was a very bright human being, a quick learner. Boy you tell him something once, it was like he wrote it on a little pad up there. He was also a very wealthy guy, very involved in a lot of local things. He was Chairman of the Board of Mount Sinai Hospital which took a great deal of his time. His wife was the Vice Chairman of the Board of the Museum of Natural History right across from Central Park in New York City. So they were involved in a lot of things. While he knew what was going on all the time, he really didn't get too involved in the day to day operation. In fact, we were in Rockefeller Center and he was in one building and I was in another building with my operational end. But a very bright and a very honest guy, very honorable guy. He served as the Chairman of the Board of the NCTA for two years and did an extremely good job for them. But he primarily would stay out of the day by day operations. He sat in on all our staff meetings, enjoyed that, and not that he didn't have a lot to add to it. It was not that he didn't know what was going on because we had quite a detailed reporting system. But he chose to sort of stay out of the area.
ALLEN: How did you and more importantly your family adjust to the change from Bluefield, Virginia, to wherever you lived in the New York metropolitan area?
FUQUA: Well, from my personal life standpoint, it was a good time for that. My first wife had been killed in an automobile accident and I had remarried after about three years. This was a gal who was the secretary to my attorney. My first wife being a local girl, it was a very difficult thing for my new wife when we got married to fit into that particular mold that we had already sort of created. My first wife's family being there all their life and my family being there, and this gal was from out of state. It wasn't that people were unkind to her, it was just that there were always being comparisons made. Probably the toughest thing to ever compare is to someone who is not here. We sort of welcomed the opportunity to move out of this little town which was a very close knit little town, to Connecticut. As I say I was young and eager and anxious enough that I worked never less than six days and usually seven days a week. In fact, after about the first year and a half or two years when I did this, they wanted to have a $100,000 key man life insurance on me. I flunked the test. My blood pressure was up. The doctor said, "Gee whiz, if you were my regular patient, I would tell you to take about a month off." He said, "You are about that far away from collapsing." You don't realize that when you sort of get the bit in your teeth, but I had so much I had to get done.
One of the brightest things that we probably did was to buy a company airplane, a Twin Beach. This really gave me the flexibility of getting to these properties. I could get into two or three on regular airlines, but they all had airports, so that it worked out great. I could get in and be there during the day and then go over to the other one. I could scoot around pretty good.
ALLEN: When you had to go to Oregon, did you fly the Twin Beach?
FUQUA: No, no. Nor did we even take it to Florida. We only took it wherever we could be there in never more than a two hour flight.
ALLEN: When your wife died, how many children did you have?
ALLEN: That you were mother and father to.
FUQUA: Yes. Yeah, for about three years. I had housekeepers in those days which was always a little bit tough, only because we lived in a little tiny town. The housekeeper had to be old enough that everybody wouldn't say, "He and the housekeeper have something going." However, if she were old enough that meant it was very difficult for very young active children.
ALLEN: What age were your children at this time?
FUQUA: Well, let's see, my youngest daughter was almost a year, my second daughter was three years, my youngest son was four, my oldest son was seven. So they were little tiny tots. It was very difficult. I had, I guess in three years, probably five or six housekeepers. It was very difficult for the housekeeper because even in those days I had to travel some. I would be gone for a couple of days.
ALLEN: This was during the time you were working for National General?
FUQUA: Yeah. And I would come back, and one of the kids would say, "Mrs. So and So popped me on the behind," which I am sure he or she deserved. You know, being both mother and father, you were probably over concerned in those days, and me I would say to the housekeeper, "Now how did this happen or why did you?" It was very difficult for them, both the children and the housekeepers.
End of Tape 3, Side B
ALLEN: Today is Friday the 5th day of January 1990 and this is the fourth tape in the Fuqua interview. Okay, let's pick up now on the story of Television Communications Corporation. You had gotten the depth of management taken care of and you were operating eight systems around the country. How did the expansion then begin? How did you begin looking for properties?
FUQUA: Well, most of them were locations that were not necessarily contiguous but maybe adjacent or within a relatively short distance of the properties that we already had. Acquisitions weren't too awfully hard to come by in those days. Some of them that gave us more difficulty were brought to us for one reason or another. For example, the Winter Haven, Florida, system was owned by the Cole family which owned Look Magazine and two or three television stations. They had started this cable system just to know what the cable business was like. The fellow who did that today, I see his picture periodically in broadcasts in magazines and elsewhere and I'll think of his name before we are through, has moved on to much greater things. They had the Winter Haven property and really didn't know what to do with it so we found because the Coles knew Al Stern, we got that one. We bought a system in Bradford and Warren, Pennsylvania.
ALLEN: You felt you couldn't be a respectable cable owner if you didn't have something in Pennsylvania.
FUQUA: That's right, you had to have something in Pennsylvania. And each one of those were probably made up of other little companies and I'll think of their names as we go on. They were in towns that were maybe only five or ten miles away from them, but in those days, a little bit too far to be tied in.
ALLEN: Were you only buying existing properties or did you negotiate any new franchises and build new systems?
FUQUA: We bought one franchise which was in a way a great opportunity for the company, and in another way a great handicap to the company. This was Akron, Ohio. Akron was the largest city that we ever had anything to do with. We did some things terribly right and we did some things terribly wrong in Akron. We thought once again that these were still the days where you provide better television or more television. Akron had three television stations so that the only way that we thought that we could make it really go in Akron was to bring in as many television stations as we possibly could and add other kind of services. In those days the other kinds of services were beginning to pick up a little bit.
ALLEN: When was this? Can you pinpoint it approximately?
FUQUA: This would have been about in 1965.
FUQUA: Maybe 1966. But, anyhow we knew it was going to be a big operation.
ALLEN: How big of a town was it?
FUQUA: Akron at that time had about a third of a million in population. It would take about, as I recall, two thousand miles of plant. You had a lot of continuous little towns like Cuyahoga Springs, Silver Springs, that were contiguous to Akron. But we had to get a separate franchise in each one of them. Those were in the early days when the only converter system was if you had no more than 12 channels. The only converter with more than twelve channels was being used in New York City primarily by TelePrompTer. And they had more problems with that converter than you could shake a stick at. Fifty per cent of them didn't work when they got them. The quality control of whoever produced those was terrible. We knew, or at least we thought we had to have more than twelve channels to make Akron really go. There was no amplification equipment on the market in those days that carried any more than twelve channels. There wasn't any such thing as twenty or twenty‑five or thirty. So we built the first dual cable television system in the United States.
ALLEN: It was two twelve channel systems?
FUQUA: That's right. Two twelve channel systems so that we wouldn't have to use a converter. So we built the first dual cable system. There wasn't anything basically wrong with the construction nor was there basically anything wrong with the concept in the marketing. We got a guy to run it who is another one of my graduates that I am very proud of by the name of Bob Felder. Bob came out of Ohio Bell. He had been in marketing for Ohio Bell. He was an engineer, but a very bright young guy, and is now in business up in the New England states, where he is trying a new concept in cable television. He is going into little tiny towns and building cable systems in little towns of three and five hundred homes. There are a lot of those towns in the United States that have just never been big enough to justify. Bob thinks he has found the formula to do that and evidently so far is moving ahead pretty good doing that in the New England states, New Hampshire, Maine, Vermont, and throughout that area. In fact, he lives in Exeter, I guess New Hampshire.
Al Stern was a very conscientious human being and a very liberal fellow in his philosophy.
ALLEN: Al Stern?
FUQUA: Al Stern. Al decided that this was a great chance for us to really do something for the underprivileged in the state of Ohio or particularly in Akron. I can't say that I disagreed with him. At that time there were very few, if any blacks in the industry at all. Primarily, up until recent years, you didn't see even black linemen in your construction crews. Now you see a lot of blacks in all phases, but in those days there were just no blacks in the cable industry and very few women in the cable industry except in office jobs. So we hired a New York company that had some expertise in training, decided that we would key our four or five top people. This was in the early days and this was sort of fun too. Cable television basically had a general manager and a chief engineer and then everybody else was either a technician installer or clerk. This was probably the first to go beyond that because we were going to be in front of something like 80,000 homes. Maybe more than that.
ALLEN: More than that if there were that many people.
FUQUA: Yes. So we could see that it was going to be a big operation. So that this was the first time that we ever tried to break the organization down to a director of marketing and advertising, a director of personnel, engineer for construction, an engineer for installation, and engineer for maintenance, etc. Oh, where Bob came from, he had been involved in that business in the telephone company. And to the telephone company's credit, they are a pretty well organized outfit, knowing who does what, when, and how. But, the big problem that I didn't envision, nor did Al envision, was in the training process that had to go on with these either blacks or undereducated or underemployed people in the core city of Akron. We knew we were going to have two hundred to three hundred employees, and that is where we decided the biggest part of our employees would come from. We didn't have too much of a problem with those people to be truthful. I mean we had problems with them as you can well imagine, in the training.
But the big problem that we had, and I never foresaw this when we went into it was with our supervisory people. You couldn't very well train these people to become technicians or clerks or whatever they were going to do without having their supervisors involved. To get their supervisors involved meant that they had to go through some fairly emotional and traumatic situations with these people. You don't realize it until you get into these things, but if you take a black guy off the streets of Akron and you bring him in, you may have a hard time understanding him. And he has a hard time understanding you, so that the byplay becomes trying to find the common road that the two of you can use to talk about. I must have had a total turnover three or four times of our supervisors. They just couldn't do it. It was very hard for them to accept this. These were people I had brought out of the other systems. They couldn't understand why you had to baby these people. What the hell, in Warren when we would tell them to go out and climb a pole, we meant go out and climb a pole. I'll show him, but I'll be damned if I am going to show him five times.
So it was very difficult for us with our people. The company, and I can't remember the name of the training company‑‑it was the Victoria Association I believe‑‑I thought were very good. They would have seminars going on all the time, but it was just more than my supervisory personnel could do. We found that we had unbelievable personal problems. And that equated into what was being done down on the streets. If you didn't have a supervisor of installations, the installations didn't get put in, at least in the order that they should have or in the magnitude that they should have. If you didn't have your quality control people, because you had to have it when you had that kind of employment process going on, if they didn't do a good job, then 50 percent of your installations had to be gone back to. So our cost factor began to build up in the Akron properties. It was a high initial cost factor because of the dual cable to begin with, but the magnitude of our labor problem in trying to accomplish what we tried to accomplish really came back to bite us.
ALLEN: To keep it in context, this was "The Great Society," the Lyndon Johnson era?
FUQUA: That's right.
ALLEN: And there was an awful lot of unrest in the whole civil rights movement nationally.
ALLEN: So that you were undoubtedly getting some of that backlash at the same time.
FUQUA: Good point. Very good point.
ALLEN: Akron is a very heavy union town. Did you have union problems?
FUQUA: Oh, yes, yes. It was sort of funny. I had a good friend who still is a good friend today, who is a very prominent political attorney in Akron. We met with the key union people before we ever started. I had worked with the union before. I didn't particularly like it, but knew that sooner or later it was going to have to be done. Our approach to them was if we used this approach that we were talking about of going into the underprivileged and underclassed, that we felt that we needed some time where we could do things that would be according to the union rules. We needed probably a year or a year and one half to be able to get ourselves together because we may have to have people crossing jobs and what have you. I think they pretty well understood that. I think they were very fair with us from that standpoint. They didn't mess with us at all for probably a year and one half or two years, but then once they did, then that was another big turmoil.
ALLEN: What union or unions were involved?
FUQUA: This, as always has bothered me, the Electrical Workers, no not the Electrical Workers, the Communication Workers. I would have preferred to have had the Electrical Workers who are more in broadcasting. The Communication Workers I think were dominated by some folks that I didn't particularly care for. The United Automobile Workers, the UAW, and of all goofy things, the Mine Workers, their catchall local whatever it was. So we had three different unions which, after they came in, gave us more problems than we wanted to mess with. Well, what happened was that our growth chart was not anywhere what it should have been. We assumed that at the end of the first year we were going to have 10,000 and we had 3,000. If we assumed that at the end of the second year we were going to have 15,000, we had 5,000. The disparity between the gross income that we had projected and the real gross income as a result of all this was probably only a third. So it had put quite a strain on the company. We had a pretty good cash flow, but at that particular point in time, Al had decided that he wanted to spread his wings a little bit. We had bought a couple of other kinds of companies that were not cable television companies.
We had bought a company called "A Record Barn" which made recordings with studios in New York and Los Angeles. This about drove everybody completely nuts. I didn't know the first thing about the record business and really had my hands so full that I didn't want to know. Yet I was executive vice president of the company and these guys would come in with pierced ears and they had a totally different vocabulary from me. I couldn't get those guys to do anything. I'm a very rigid routine kind of guy. I mean, you have budgets and you update those budgets, and you have reports and you update those reports. These guys in essence would say to you, "Yeah, baby I'll do that. I'll get to it." It drove me absolutely nuts. Then we also bought a radio station in Arkansas and a television station in Puerto Rico. Those were not two disasters, but...
ALLEN: Challenging opportunities.
FUQUA: Challenging opportunities, you know. At that time we had become a public company. We were using stock or as they used to say in those days, "funny money" to acquire these things. And Al could see himself, and nothing wrong with that, as this great big conglomerate. Well, what happened was that as cash was needed for these various things, it came out of the cash flow of the cable business or department. At that time, we probably had 50,000 subscribers and we had our rates up pretty good and making some pretty good money. As a consequence, once Akron fell behind, boy it really threw a big corkscrew in the whole company. So Al began to feel the pressure for the first time in our relationship. This was probably in '68. We were struggling to meet our commitments to the bank. I was beginning to give him a hard time, and I served on the board. I was beginning to be a little bit of a thorn in his side because the money that we were making was not going into cable television to either expand cable television or to upgrade our properties which I thought it should, but was being siphoned off by $100,000 here and $50,000 there. Never great big sums of money, but enough so at the board meetings Al and I almost had two different agendas.
My agenda was to create more cash flow from the cable television systems and Al's was to take that cash flow as it existed from the cable television systems and put it into the other businesses that he wanted to go into so that they then could become viable. So it was I would say a concept differential. Al and I never got mad at each other but it was very uncomfortable for both of us. He was that kind of guy. I mean, he wanted you to say what you thought, yet it is very difficult. You're the Chairman of the Board and your Executive Vice President is saying, "Well, I respectfully have to disagree" with my boss. The growth was only about one third of what we had hoped it would be.
ALLEN: Were you getting the miles of plant built in Akron and just not getting the subscribers?
FUQUA: Yes, and just not getting the subscribers. So we had literally beaucoup plant out there with literally nobody on it. The banks began to say to Al and a couple of members of his board‑‑Al was like most chairmen of board we had a nine man board, and of that nine man board, probably five of them were close personal friends of his. The other four were guys from investment houses primarily, two from the company that took us public who were constantly saying, "let's do things." I forget who the other was, but anyhow. Two of them might have been a couple of the original investors. Al came to me in about March of 1969 and we had been in business in Akron, at that time four years I guess. We had had one rate increase and what I had done when we had started this thing was, I had decided that we would be better off starting off, whatever the rate was, $7.95 or what, and we would go to $9.95 in two years. We would have to have a base before we could do that and we would have to have something else to offer them.
We had lined up what was in those days I thought, a rather ingenious originating channel. We had been able to buy from DuMont some of their old kinescopes which were then transferred to video tape. We had quite a studio up there. We had some of the old original television shows. We called it "An Oldies But Goodies Channel" mixed in with some film that we had been able to buy reasonably well from Paramount, I believe it was at that time. We had this other channel that we made a big to‑do out of that we were going to get going so we got ourselves a couple of dollars and got it through without much problem. So in early 1968 I guess it was, Al said, "Gordon, we have to get another rate increase." I said, "Al, I don't think now is the time. We have to come up with something that we can do for them. Also, I would like to build our base up a little more before we can do that." He said, "We don't have any choice. We have to do it." I said, "Well, let's go to Akron and let's talk to the people there." I knew two or three members of the city council, and my attorney was the kind of attorney that if he said we can do it, you could rest assured that you could do it. If he said, we can't do it, you couldn't do it.
So we went in and the attorney said, "No, no, no you can't Gordon, you won't." He said, not that I won't try, but I can tell you right now, you have to give them something for it and your service hasn't been that great.
ALLEN: Did the city council have control over this?
ALLEN: So you couldn't raise rates without their approval?
FUQUA: No. I tried. That's right. And Al said, "No, we gotta have it." So he was the boss. We tried it and lost. Well, as silly as that may sound, not silly, but strange maybe, Bob, to you but that had a very devastating effect on our relationship; number one, with the city, number two with our own people. In the process of trying to get the rate increase, all of the bugaboos came out of the wall. This went on over a period of like three or four months. If you can do it, the secret to rate increases in cable television was always do all the rate increase work quietly and behind the scenes so that the day that you go up before the city to ask for that rate increase, everything is all ready. You know it's going to be granted. This we couldn't deliver on. So it literally stopped our growth for about another six or eight months.
This almost drove poor Al into having a contortion, and justly so. He was the Chairman of the Board, and he is the guy that bears the brunt of it. At that time Warner Brothers, where we had bought some film said, "Tell us again about cable television." In about midyear of 1969 I met with a couple or three of the Warner people. I knew that Al had been talking to Ross Steven, or whatever his name is, the Chairman of the Board of Warner. But I didn't realize how close they were to Warner or to the concept. When two or three of their people showed up unexpected at our office, I picked up the phone and called Al. Al said, "Oh, I'm sorry I didn't tell you, but they just want to see about the inner workings of the cable business. I told them that you would be going out in the field in the next week or two and you would take one guy with you." Well, they couldn't have sent us three worse people, really. All three of them, and nothing against accountants, but all three of them were financially oriented kind of guys. The guy that traveled with me was really a horse's rear end from way back, but he was a senior vice president of Warner. It didn't take me, nor most my staff, very long to see that if we were acquired by these people, or if we merge with these people, they aren't my kind of people. About June I went into see Al and said, "Al...
ALLEN: June of '69.
FUQUA: Yeah...it strikes me that you have lost a little bit of faith in what we're doing out in Akron, and Akron now is the big plug. He said, "That's right, I lost faith in you Gordon, and sort of lost faith in the project." And I said, "Well, I don't know if we can sell the project or not." He said, "No, no, no, I wouldn't want to do that" because in the industry that would look like I had given up on it. He was a very proud guy, and he said I can't do that. He said, "I would sell the company, but I wouldn't sell Akron." I said, "Well if the trend continues Al, what cash that we are generating goes to either the Record Barn or the television station. I think your emphasis on cable is gone, and I'm not sure you need me as your executive vice president. You probably got a better executive vice president out here in the hinterlands who knows those businesses that I don't know." So we came to a mutually agreeable parting of the ways. In fact, he said, "It's in June, will you stay till the end of the year and train whoever your replacement is?" I said, "Well, I would like to get on with my life, but I have a great deal of respect for you and you have been fine to me."
At that time we had a business going in Europe with the Bendix Corporation which is a whole other story‑‑a rather interesting story about trying to get cable television going in Belgium and France. We had a fellow by the name of Joel Smith who was running that operation for us and had an office in Paris. Joel was a very bright guy and so I brought Joel back from Paris and he has never forgiven me to this day. He came to New York to take my job and I stayed with him until the end of the year, then I left. In about March or April or maybe May of the following year Al's company was acquired by Warner.
ALLEN: Before we go on to the next step in this, let me go back and try to clarify a couple of things. Was Akron the largest market to try to put cable in where there was existing broadcast with the exception of Manhattan Cable at that time? You went into a market where you already had three television stations. You probably had a signal coming in out of Cleveland as well.
FUQUA: Yeah. I can't say it was the largest, because I think San Diego was underway then and they had some television stations in San Diego. I don't know if they had all the networks there or not, but I am going to assume for a moment that they did. They were able to bring in so many other stations out of Los Angeles and that environment. It really created a good deal for them. Manhattan at that time, was as silly as it may sound, not even to the point where anyone considered whether or not it was going to work. Manhattan was a heck of a gamble for about two or three or four years because it was a cash drain that literally pulled that company under. The cash drain was so much. So, I can't say that it was the only, but it was one of the first.
ALLEN: This was at least a very pioneering effort in competing with broadcast television.
FUQUA: Oh yeah, yeah.
ALLEN: And you put in a double system so you had the potential of twenty‑four channels.
ALLEN: What did you plan to put on twenty‑four channels?
FUQUA: Well, in those days, there was a microwave that came through Akron. I can't recall how far off Pittsburgh is, but I don't believe Pittsburgh is that far from Akron. I would have to look at a map to see.
ALLEN: One hundred and twenty miles.
FUQUA: Yeah. It seems to me that we imported five or six other stations in addition to the Cleveland and the Akron. I know we had just enough that we had more than twelve channels. We had like fourteen or fifteen channels.
ALLEN: Columbus, Youngstown.
FUQUA: Yeah. Then we had the old adage, the AP News, the stock market ticker, the continuous weather, so we had (pardon the expression) a lot of "junk" on there along with the good stuff. But we had enough reason to hoot and holler that we had all of these channels.
ALLEN: But it was the first really dependable twenty‑four channel system that was ever built.
FUQUA: Yeah, uh huh, that was ever built, right.
ALLEN: How many subscribers did you end up with by the time that you left in January 1, 1970?
FUQUA: If memory serves me correctly, not quite 10,000. Maybe 9,100 or 9,200, something like that.
ALLEN: So you were well below break even.
FUQUA: Now that you bring that up, I am curious to see if it has it in here. I have the cable yearbook. I would be curious to know what it does today. Funny how you don't think about those things until you sit here talking. Then you say, I wonder whatever happened. But, it never came up to what we really expected. You know in those days actually it wasn't very hard to forecast with a great deal of accuracy what you could do in cable television, because there were so many similar markets that were already in existence. If you were going to build a cable system in State College, Pennsylvania, you pretty doggone good and well could forecast just what you were going to do because there was some other system in Pennsylvania that had gone through that same process.
ALLEN: But in the case of Akron, you did not have a model.
FUQUA: Not at all. Not at all.
ALLEN: If you used the same model you used in State College, Pennsylvania, you would go awry quickly.
FUQUA: Right. And I am not sure that we're as good in our forecast as we should have been. But, I guess that is all hindsight and we would all be very wealthy today, if we knew then what we know now, wouldn't we? Akron, 58,190 homes, I mean customers and the population‑‑I said was 200,000‑‑I'm wrong about the size of Akron because there are only, about 185,000.
ALLEN: Well, it could also have gotten a little bit smaller in the past twenty years.
FUQUA: Yeah, that's true. But they haven't exactly created a great thing there either.
ALLEN: Your original forecast may have been for more than 38,000 by the end of the third year.
ALLEN: As you look back on that now, was the basic decision wrong or what would you have done differently on the whole Akron thing?
FUQUA: I think probably from a people standpoint, I would have not gone through the employment process that we did. I think that was a disaster.
ALLEN: A socially aware kind of effort?
FUQUA: Yeah. That's right and with all the great intentions in the world, I just don't think that was the time nor the place nor did we necessarily do it right. Oh, Victoria was the name of the company that was the training group which was out of New York City. While they were very good, I don't believe they were technically oriented at all. We probably made a mistake on that company. The big problem that we had in those days was that to build a dual cable plant probably cost on the basis of 100 percent being for one, a 140 percent, not 200 percent. So that to build twelve channels and go back to the later date would have been a pretty expensive process. It didn't make sense to us not to build the twenty‑four channels at the start. Even if we hadn't used the second cable we might have been wiser in reducing the number of things that we had and marketing it using a different concept. Maybe we should have used the one cable and kept the other cable in reserve. Or we might have been better off going ahead and trying our luck with the converters because the converters came in about that time.
I guess the converters had about a two to three year period of time, maybe even four years before they really became accepted. Then you had the big problem with theft of converters in the early years as well.
ALLEN: Well, it wasn't until the advent of the CNNs and the ESPNs and Disney Channels that systems beyond twelve channels really could make it.
FUQUA: That's right. They really had...
ALLEN: You were ahead of your time in many ways.
FUQUA: Yeah, yeah. That's true and it was to our detriment I think from that standpoint. But, I am not sure what we would have done different, other than in the training process. In fact, it was funny. The fellow who was the General Manager, who as I said has his own company up in the New England states was by here last year and stopped by. We had dinner, he and his wife and my wife and I. We were reminiscing about that and he still has some pretty hard feelings about the last rate increase and what that really did to the company. But, I can understand Al's position as well. I mean it was a case of having to either dispose of some properties to get some cash or raise the rates. It was probably worth the risk.
ALLEN: How many other small cable television systems did Stern own at that time in addition to the Akron system?
FUQUA: By that time we were probably up pretty close to twenty. Some of those were obviously small little cable properties.
ALLEN: But they were all making money.
FUQUA: Yes. We didn't have to my knowledge a loser. The hardest system that we had to work with to get up to a profitable situation was Winter Haven, Florida. That was because of the bad feelings that the cable system that we bought had created down there. Boy, it was terrible. I never will forget when we first went in there. I could sense there was something terrible with the reaction that we were getting to our direct mail pieces and what have you. In fact, this is the time that we took the company plane because Al went with me. We flew down; we could carry six. I took three or four of my marketing people. The two guys out of New York, or a guy and gal out of New York and two people from the systems. We decided to go down and survey a thousand homes. The pilot usually worked with us as a survey person. So we said what we will do, we will each try to do fifteen to twenty homes a day.
There were six of us and I think we had hired another ten or twelve down there. We could do it we thought in about five days. And Al said that he had never done this before. He asked, "Can I do that?" I said, "Sure." He asked me to go over again what we are doing. We had a clipboard with the questions on it. What we were trying to determine was really what the public reaction was out there and why we were not getting more subscribers. So it wasn't a long interview. You didn't have to go in the house and sit down. You could do it on the front porch. So Al said, "I'll stay with you." I said, "Okay, I'll work this side of the street and you work that side of the street." So we got out of the car and he went up to a house and I watched, stood on the curb just to see what happened. He knocked on the door and this woman came to the door. He said, "My name is Alfred Stern and I'm working with the (I forget what the name of the company was) but let's say it was Winter Haven Cable Television System, on a survey." She said, "Not in my house, you're not," and slams the door.
ALLEN: It probably never happened to Al Stern before.
FUQUA: No, he wouldn't go to the next house. He went back and sat in the car. That was a very tough one for us to reach even and then get into a profitable situation.
ALLEN: It was strictly community attitude because of previous service.
FUQUA: Yeah. We had an interesting guy. This is a little sidelight about people who worked with me. A fellow by the name of Don Anderson was my marketing director. I had sent Don to Winter Haven to spend a year in the operational end of it just to learn about cable television from the ground up. He had worked as the marketing director for the NCTA for three or four years. I don't believe under Ed Whitney, maybe under Don Tavener. The reason I bring this up is when I left New York, Don, shortly after, left New York. He took a very interesting job. He became the first employee to do all the research and the marketing for Ted Turner when they put TBS up on satellite. Don was the first employee that Ted Turner had, which I always thought rather interesting.
ALLEN: One other loop back to Akron, you said that was the only franchise that Stern got in while he was growing in the cable industry. How did you go about getting that franchise?
FUQUA: Actually bought it.
ALLEN: Bought it? Bought it from?
FUQUA: Some local Akron guys. They had acquired it. I wished that I could remember some of their names. I remember one of the guys was an All‑American quarterback for Notre Dame. I can always remember that. I can't remember the guy's name, but the other two fellows were extremely wealthy attorneys. One of them owned the Ft. Meyers Cable System for a long time. We actually bought it from them. And it wasn't, as I recall, a great big sum of money in those days. But, maybe $50,000 or something.
ALLEN: When you were working in Bluefield, you said your primary concern was in marketing. When you went to New York, did that remain pretty much your focus, or did you get away from the marketing and into more management?
FUQUA: Got more into the management then. Because we had done such a poor job of marketing, I hired Don Anderson. I'll tell you an interesting story on Don that always really struck me as being very astute. We were doing some direct mail in Pittsville, Massachusetts. Pittsville was a large enough town. Most of our towns had maybe one or two zip codes, but Pittsville was a large enough town. It had like maybe three or four or maybe five zip codes. Don began to track what was happening in the cable office by zip code as a result of our direct mail, because we were pretty proud of our direct mail. We thought we did a good job with it. And he kept finding that there was one section that we got very little out of. If the rate of new subscribers was one and one half percent out of one zip code over a three month period of time or six month, it was only one tenth of one percent out of this one.
So he went into this particular area to find out why. He had found that this predominant area was Italian, not that there is anything wrong with Italians, but because of this cluster, Italian was spoken just as much as English. So that if we were addressing the piece to the elder member of the family we had the direct mail pieces in English and he would throw it away or his kids would look at it, or maybe his wife would read it. So we took that same direct mail piece or the next two or three and made it in Italian. We sent it to that particular zip code and quadrupled what we had ever done before, only because now the head of the household would read it. It wasn't that he couldn't read English, but it was junk mail in English, but in Italian it was his language. I always thought that was pretty astute.
ALLEN: That's right. Did you start the door to door marketing at this point as well?
FUQUA: Yeah, uh huh.
ALLEN: In all the markets or in some markets?
FUQUA: In all the markets.
ALLEN: And how did that work?
FUQUA: Well it worked very effective. There is an old adage in the cable construction business, Bob, that a cable system is constructed just as efficiently as the superintendent of the construction company that is on that job. You can take the same guys that built the system right here today, change their supervisor and move them three miles away and they will build a junky system. They'll be just as efficient as that supervisor. The same is true in direct sales. Direct sales is just as effective as the people that implement it. I have seen guys that I used to laugh about particularly I am thinking of Pittsville. I remember I sat in one night just listening to see what they were doing. Of course, the only hours they can work are usually from about 4:00 o'clock in the afternoon to maybe 8:00 o'clock at night. Any later than that you bumped into too much television. But that was a pretty good selling time. We used a lot of teachers, firemen, people to whom this was a second job. These people were just looking for some other source of income.
Well, the key was to motivate them, and this guy in Pittsville was a past master. I used to laugh when they had their little clipboards with their pitch on it, and handouts, what have you, and all. They play the game. You probably have been through these motivational things at work. But this old boy was good. He would end up in our technical quarters, but we had little chairs like you have in school rooms in there because we would have our technical reviews every month. This was where the chief tech would have all the guys in and go over all the stuff. He would get them to the point of where they would begin to pound those clipboards, you know "we're, we're going." And he would say, "Now let's go out and sell and get him." And thank heavens somebody opened the door or I think they would have run right through the door. . You know, I think he was probably our best trainer and motivator. We could move him whether it was Pittsville, Massachusetts, or Winter Haven, Florida, and the same results followed him. But there are a lot of hucksters in that business. A lot of hucksters.
ALLEN: They have proved to be the best way to sell cable television.
FUQUA: Yeah, yeah.
ALLEN: Maybe not the cheapest, direct mail may have been cheaper.
FUQUA: But the best.
ALLEN: More efficient.
FUQUA: Yeah. And I think most of your cable television companies today, that's the essence of their reliance.
ALLEN: Okay. We are about at the end of this side of the tape.
End of Tape 4, Side A
ALLEN: All right, as of January 1, l970, you had parted company with Al Stern. You said that Al sold the television communications company to Warner a few months later.
FUQUA: That is correct and that is how Warner got into the cable television business.
ALLEN: And where did you go from that point?
FUQUA: I was living in Stamford, Connecticut, and when I left New York or left TVC, I moved to Charlotte, North Carolina. The reason that I moved to Charlotte was at that particular time there were two cable television systems in Charlotte, one owned by Cosmo Broadcasting out of Raleigh, North Carolina, and the Liberty Insurance Company owned the other cable system which was in Columbia, South Carolina.
ALLEN: Did they split the Charlotte area?
FUQUA: Basically. Although they had overlapped each by about 20 or 25 percent. So it was sort of a mess. Neither company was making any money, and both had been in business for four or five years. They would have been better off if they would have combined. But they had developed such a distaste for each other, at least at the top executive level, but they couldn't even talk to each other, strange as it may sound. So, I saw this as a grand opportunity. I will tell you a little sidelight. It is certainly not historical. The reason that I made my decision to leave New York when I did is that, when I went to New York, people said to me, are you going to stay up there forever? I said, no, no, no! My idea was to make a million dollars. When I left New York, I owned stock that was valued at a million dollars. It was a good chance for me to go to North Carolina and hopefully to be able to put these two systems together.
I was joined in this endeavor by W. R. Tucker, Randy Tucker, who was the guy who originally hired me to go in the cable business. He had retired at that time from Barne's Engineering which was a high tech engineering company out of Stamford, Connecticut. He had been a close friend of mine in Stamford and had retired and also moved to Charlotte. So we opened up a little office and went after these two companies.
ALLEN: What did you call the company that you opened?
FUQUA: You know, I don't recall our ever having a name for that company. It wasn't Tucker and FUQUA: or it wasn't FUQUA: Associates which was the trade name I use. I have only used that since I have been on my own. I am not sure we even had a name. But anyhow, we thought we had to have an office. It gave us somewhere to get out of the house, I guess.
It was a very trying year. I would go or Randy would go to Raleigh, meet with the one group, then go to Columbia, South Carolina, and meet with the other. Both places could be reached easily from Charlotte. Raleigh was about four and a half hours and Columbia a couple of hours. But, it was shuttling back and forth. The one question that we constantly had to avoid, which was a little hard to work with was, "Well, what are you going to pay the other group?" We knew fully well that if we came out with one figure we were hooked. If you had to pay the other guy $10 more, then you were going to lose the deal if you didn't correspond. During this period of time we also tried to put together a couple of different packages, one which we did was to start a system up in Kent and Ravenna, Ohio. That is a sad story in itself.
ALLEN: You got the franchise or did you buy in?
FUQUA: Got the franchise.
ALLEN: You built it from scratch?
FUQUA: Built it from scratch. The Charlotte thing came to an end because a young man who I knew, and who I can't think of his name right now, who had been in the cable industry for several years had a group of real estate investors from Chicago that wanted to get in the cable television business. He merely looked into the Fact Book and realized there were two cable systems in Charlotte, got on a plane, went to Raleigh first and asked the one group, "What do you want?" and they told him. He went down to the other (Columbia) and saw that group and asked them what they wanted and they told him and he said, "Fine, I'll buy both of you at that price", which was about 33-1/3 percent more than we were willing to pay. Both companies called us and said that they had a firm offer. He had made a firm offer with some money down and they sold them to him. So our year or year and one half of work was gone in about twenty‑four hours really. Unfortunately, because he paid so much money for the systems, his company went bankrupt and he sold those systems to ATC in about three years. That didn't help me knowing that he paid too much, but I knew he had paid too much and unless something dramatic happened there was no way he could pull it out. But, it was sort of disconcerting to think that my partner and I had spent a year or year and one half working on this. We knew all the people very well.
As I say, both groups were courteous enough to call us and say, "Look fellows, we assumed that we were going to sell to you sooner or later, but this guy came in and he has got cash money and you can't blame us." Well, you sure couldn't blame them. So at that time Randy decided that golf and photography, which are his hobbies, would take up more time of his than cable so he just sort of dropped out. We didn't have anything to dissolve, but when the lease came up on the two room office, we didn't renew it. That is how I got in business for myself. That is the reason I was in Charlotte.
ALLEN: But you still owned the cable company, the two of you in Ohio.
FUQUA: No. I went into the cable company in Ohio by myself.
ALLEN: Oh. Okay.
FUQUA: He had decided not to go in in any form at all. That was sort of a sad story, the Ohio thing. Kent and Ravenna were good cable towns. I built those two systems by borrowing money from the local bank in Charlotte and the Bank of Pittsburgh in Pittsburgh. These were fairly high leverage deals where I probably borrowed 80 percent of the cost of the construction. I borrowed that money at, as I recall, 7.5 percent interest. We got the systems built, started to gain subscribers, and the high interest rates came in. My interest rate went from 7.5 percent to 22.5 percent.
ALLEN: This was the mid seventies?
FUQUA: Yeah. At the same time my stock in those days was in Warner Communications. When I left New York, or I mean when I started the system, Warner stock sold for $51, that's what I put up as collateral. They called my loan in the Carolina banks in 1975. The stock was selling for $9.10. They, in essence, wiped me out. They wouldn't let me borrow any more money to pay the interest, and we couldn't even afford to pay the interest much less we didn't have any principle repayment for another six months. But when the interest went up that much, and my collateral lost its value, they literally wiped me out. They sold the business to some fellows from your home city of State College, Jim Trudeau and Bob Tudek. No fault of theirs. It was a good deal for them because Pittsburgh Bank then took over as the managing bank and literally sold the properties for the loan value. Well in fact, I think they even lost some money. But banks have a habit of doing that, unfortunately. But that about wiped me out. I went home on December the 30th.
ALLEN: Home being Charlotte.
FUQUA: Charlotte. I had lost everything. Had a house rented. Had to sell one of my cars‑‑I originally had two cars‑‑sold one of the cars to pay the bank off. Had the rent paid for the month of January, and had $18 in the bank. From rags to riches, or riches to rags pretty fast. So that was sort of a catastrophe in my life.
ALLEN: Probably about as low a spot as you can have.
FUQUA: That's true. It took me I think a year to get over being mad, feeling like somebody up there didn't love me or something. It took another six months to get over figuring out how I could sue the bank . It certainly couldn't be my fault. You know, why could it possibly have been my fault. I'd been too successful to have something like that happen, so I thought, but reality is reality. So then I went into the real estate business at that particular point in time.
ALLEN: In Charlotte?
FUQUA: In Charlotte. At that time the consulting business was nonexistent because of high interest rates. No new company could afford to come in and build a cable properly where they had to pay 22 or 23 percent interest annually.
ALLEN: It didn't take a consultant to figure that out.
FUQUA: No, that's right. So I went into the real estate business for a year or two and sort of enjoyed it, and did fairly well. Knock on wood. In those days it was maybe a little more important than it is today, but in my second year I became a million dollar producer in real estate. But, that is sort of a misnomer because that may mean four houses. Today, it may mean one house. But in those days, it was a pretty good thing. Most of the houses that we were selling were under $100,000. I enjoyed that little experience.
Then in about 1977 I guess, I got a call from an attorney that I had been working with up in Washington. In fact, the firm that Fred Ford, who at one time, was the chairman of the NCTA, as well as past chairman of the FCC, was involved in at that time. The attorney said that there was a company down in Florida that had filed for a franchise, and it looked like it was going to become a competitive situation. He asked if I would be interested in serving as a consultant to that company in helping them with their franchise application. This was in Jacksonville. So I came down and met the people in Jacksonville. They had twenty or twenty‑five investors, all local business people who thought they had a good chance to get the franchise. But by that time other people had popped up as well. Part of my agreement as a consultant with them related to what would happen if we were successful in acquiring the franchise. I was to do most of the writing and make the presentation in front of the city council and all that bit. If we succeeded, then part of my agreement was that I would serve one week a month with them as their on-site consultant to help them negotiate their contracts with the utilities, to help them decide whether or not they wanted a management company to come in, or do their own managing.
To help them with that particular thing, and serve on their board of directors so that they would have somebody there that they could turn to and say, "Is that right, Gordon?" That is why I moved to Jacksonville. At that time the consulting business had started up again particularly in the franchising field. I spent a great deal of time working in various cities throughout the United States in franchising. I enjoyed that part of it. It was sort of a fun business. From a consulting standpoint, it was a very high pay kind of business because it was a relatively short tenure and it was a pressure kind of thing. You would go into Miami, Florida. I did the Miami one which we were successful with and maybe literally be there for three months, at least five days a week, sometimes seven days a week, sometimes 12, 14, or 16 hours a day. They have to put together an eye appealing presentation, one which also appeals to the readers. It took us a while to be able to figure out which consultant was working for the city and what he was looking for. But, we enjoyed that.
It dawned on me that the only place I was going all the time, that the only place that was really home...I was single at the time...was Florida, where I had to be in Jacksonville one week a month. So I said, "Shucks, why do I live in Charlotte, I'll just move to Jacksonville and work out of Jacksonville." At least that one week a month I will be home. That is how I got to Jacksonville.
ALLEN: That was in late '77?
FUQUA: 1978. I moved to Jacksonville on January 3, 1978. We acquired the franchise from the city in March of '78, so it worked out real good.
ALLEN: Can we go back and just ask a question as to the experience of building the systems in Bluefield and Kent‑Ravenna. How did those two compare? How far had the industry gone between the two? Those were two building jobs that you were intimately involved in.
FUQUA: Well, when we built the one in Bluefield, you had to use contractors who were primarily telephone contractors. The company that we used to build the one in Bluefield was out of Greensboro, North Carolina, and had built a lot of telephone system plants, but had never built a cable plant. Fortunately, they had a good superintendent and we received a great deal of assistance, in that particular instance, from Jerrold. Now Jerrold, if the truth was known, didn't have a great deal more experience than we did because that was the fifth cable system in the United States. They had done a number of apartment complexes where there were more than one building. They understood at least the conceptual idea of moving from one location to another as opposed to just an apartment concept. But, the group out of Greensboro literally experimented a lot in what they were doing. While I supervised them, I am not technically oriented, so I really didn't know that much myself.
ALLEN: What was the name of the company they built?
FUQUA: I have no idea. It has been so long ago. I can remember the foreman's face. If I would see him today I could remember him I think, because he really had a bunch of characters. But they picked up either one or two linemen who had participated in the Clarksburg system which was built six months before the Bluefield system. How they got those guys, I don't know, but they had had some experience so it went along fairly smooth. I can recall many times though that the telephone company or the power company would call and we would have to go over and sit down with them because somehow we had gotten above where we should be or below where we should be. But because this guy had been a foreman and a telephone company contractor, evidently the power company knew his company as well, it made it much easier on me because he could say, "Oh, yeah, well I didn't realize it." It was fun.
ALLEN: By the time you built Kent and Ravenna.
FUQUA: There were plenty of companies. In fact, that job was a turnkey job with Jerrold. They built the system themselves and I don't recall what crew they used. It was a whole different world in construction. I think in Bluefield we could probably build a mile a week if we were lucky and by the time we got to Kent‑Ravenna they could build a mile a day without any problem. It was that dramatic of a change on equipment and know-how and what have you.
ALLEN: Not only could they build it, but it worked.
FUQUA: Yeah. That is correct.
ALLEN: So you then spent the next years as a consultant. What are some of the franchises that you worked on that were either successful or unsuccessful? I'll let you decide.
FUQUA: Oh, well, most of them were not successful. I have to jump in here pretty quick to say that I think we got our fair share, but that doesn't mean you have to lose one for every one you win. We got the Jacksonville one and we had some pretty good competition here. In Jacksonville there were six applicants.
ALLEN: Did each one of the applicants have their own consultant?
FUQUA: Yes. Well, one group was Cox Cable and they didn't need a consultant. The other group was Daniels from Denver and they didn't need a consultant. There was one group out of Tampa and they used a consultant who by the way was from Akron, Ohio, although I didn't know him at the time. And then there were two local groups, one a black group which later merged with one of the other applicants and another group that was led by an electrical contractor in town. We won that one. We won some in little towns--Goldsboro, North Carolina; Newburn, North Carolina. I don't know if you have ever heard of these little towns or not. We won Miami, Florida.
ALLEN: A little town?
FUQUA: Yeah. Lost New Orleans. Lost Cincinnati, Ohio. I think these were two instances where I really think we were so much better than the other applicants that it really hurts you when you lose. Cincinnati was one of those. Fairfax County outside of Washington, D.C. was the other where we were just far superior to any other applicants not only in our application, but in what we could do really. But the franchising business was an interesting business. Sure there was a lot of politics in it, but you had to have some credibility usually to get the franchise. As soon as the franchise battle was over and this is where some of the guys were smarter than other guys, the city literally washed their hands of it and said, "Okay, you can do whatever you want to do." So a lot of those franchises were sold within six months or a year and had no problem having them transferred. They had had this battle that cost all these companies a quarter or a half a million dollars each that had gone on for a year or two. It was sort of like once it was over, well it's time to get on with other things. Let's worry about the sewer system now. Cincinnati, Ohio, was a very big disappointment to us as was Fairfax, Virginia.
ALLEN: What was the typical scenario on the franchise? Take Cincinnati, Ohio, from the time you became involved until the city council finally made a decision. What where the processes you went through?
FUQUA: Well, in most instances what would happen is that there was a group of local people involved. Usually it was one stem winder. For example, here in town the stem winder on this one, the guy that really got it going, his group going, was a fellow who had been Vice President of Southern Bell and had retired here in Jacksonville. Once he retired, and I guess he had seen cable and heard of cable, he was sort of a catalyst for that. But in most of these towns there was usually one guy or two guys who wanted to get into the business. They would go and get four or five or six friends together. They never understood the magnitude of it until they got involved. Then they would usually hire a Washington attorney. I don't think I ever had anybody ever come to me direct. They would come to me through an attorney and there were probably four or five different firms in Washington who would call me and say, "Are you involved in here?" If I were they'd say, "Well, we have got another client who will be your opponent here." And the Washington attorneys were very involved because they always would have to write the legal end that's involved in a franchise application.
ALLEN: A local law firm couldn't provide the legal help?
FUQUA: Not usually. They would always have a local law firm because of the local politics and local rules and local ordinances. They would uncover all of that. My role, and I worked very closely with an engineer who is a good friend of mine by the name of Jim Reeve, who lives in the Washington, D.C. area, was with a company by the name of Atlantic Research for a long time. Jim, although a physicist by education, was a very, very bright engineer and probably one of the most articulate engineers I have ever met, not necessarily verbally. He was scared to death of people but was probably one of the best writers I have ever met that could write the most deeply scientific or engineering kind of thesis, but in layman's language that you would understand when you got through reading it. He was very good at that, very good at application processes for city councils because very few of the city council members read it. It would usually be their administrative aides or somebody in the city engineers office or the consultant.
Most of the consultants, and I have represented cities myself, are not that knowledgeable in all the fields. But usually it was a group that would get together and they would get a Washington attorney and they would bring in one or two consultants. If they brought me in, they usually brought me in for the financial projections and the operational end. I would bring Jim in from the engineering standpoint. We worked out as a pretty good team. We didn't do any local politicking unless we were asked to by one of the members of the group. They may say, "I want you to go with me to see Mayor Smith." I would go to see Mayor Smith with them and become their "walking expert." But never did I have to nor did I ever offer myself as being a political animal that could go in and sweet talk them off the seat of their pants into giving us the franchise. But it was a very high energy kind of business. I worked for TCI on three occasions. I worked for the Canadian group‑‑I am trying to think what their name is‑‑that got Sacramento.
That was an interesting experience out there. They are still having problems with Sacramento. One of the big counties around Washington, D.C. we got, and I am trying to think of the name of it, contiguous to D.C. but in Maryland not Virginia‑‑Montgomery County. I was working for TCI in that particular instance. So we would work occasionally for the major companies if they didn't have enough people on their staff. They may have an application going in Dallas and one in Denver and one in Prince Georges County. Well, they didn't have that much staff so they would ask us to come in. Because it was usually a fairly compressed time element, Bob, we asked and received some pretty doggone healthy fees for doing this. Win or lose. We did our best as I say, but lots of times there would be as many as twelve applicants for the thing and your chance of getting it even if you were the best, were probably no more than one out of six. That's close. There were always some in there that you never quite understood why. They were just sort of hoping that their brother-in-law who is a city councilman could get it in. So that's basically my...
ALLEN: So what did you have to do, what were the steps that you had to go through? Were they pretty common, each time?
FUQUA: Yes they were. The further it got, the bigger the cities got. The more uniform it became. I think this is a case of where the consultants who were representing the cities and the counties did the industry a great disservice. They would write the specs for the city. The city had no idea where to start and these guys would come in and literally write the specs so that to comply with the specs you would almost have to come up with a proposal that you knew the minute you did it wasn't possible. You would go in and say, to be competitive, we have got to say our rate has got to be $9.95 or $8.95. After awhile you sort of knew what it was going to be. Yet you would look and if you had 50 percent with $8.95, you could make a go of it. So you would literally have to fudge the figures that you put into your proposal to match the requirements of all the things that you had to do.
That is when they got into having to provide cities with television studios that were worth a quarter of a million dollars, of providing the educational system in the city or the county a half a million dollars worth of equipment and 2 percent a year of the gross income for ten years to apply towards the operation of it. They came up with all kinds of goofy ideas. As they would pop up in one city as somebody's great thought to put in his application it would show up in the next city if they had the same consultant. It would then become part of the requirements.
I think CTIC which was out of Washington, D.C., a non‑profit group, and a guy by the name of Spellnick from the west coast, I think those two, that group and that one guy probably did as much disservice to the cable industry as was ever done to it. That is a case of where the wheel got rolling and requirements got more. I remember in Sacramento, I think, where it was in the requirement for bid that if you ran your cables underground in certain areas of the town, which meant that you would have to disturb the soil only to the extent of four inches wide or something, that you would then have to plant, it was either cherry trees or some kind of fruit or flowering tree along that way. And, it turned out that if you did it you would have to plant something like five or eight thousand trees in the town. Well, it made no rhyme or reason, but it was part of the bid, so you would have to go out and say that we are going to go out and plant all of these trees. It didn't make any sense at all. It had no bearing whatsoever on whether or not you could deliver a good quality product.
In the latter part of the time, it really got totally out of hand. A lot of the companies pulled back. I think Cox stopped after New Orleans which almost bankrupt the company when they finally got the franchise, what with everything they had to do. ATC stopped franchising. TCI kept at it right to the end and spent a lot of money on it, but they had great hopes of becoming a gigantic big company. But the franchising business was a world all to its own, and it became almost a joke among the consultants because we would see all the same guys. It didn't make any difference whether I was in Sacramento on Tuesday and Miami on Thursday, very often I would have dinner with the same guy who was one of the opposing consultants.
ALLEN: Who were the key players as far as consultants were concerned during this franchising era, and this would be during the early and mid '80s.
FUQUA: Yeah. Malarkey and Associates were very, very big. Smith and Pepper were very active in the consulting business. The two groups, Spellnick on the west coast and CTSE on the east coast in Washington. Very often if they were not representing the city then they would be the consultant for one of the applicants. A guy by the name of Tom Dowden out of Atlanta, Georgia, was a very active consultant. There was a college communications professor from NYU and a gal that worked with him that were usually with one of the groups involved. Daniels had a franchising team working out of his company that was very active in it. So those were basically the ones that you would bump into. And of course each company, the big companies, the Cox and the ATC's, United and TCI's had one or two guys on their staff who that was all they did. You would always bump into them as well. But that is basically who all was there.
ALLEN: And your primary responsibility was to prepare the written presentation, the numbers and the performance estimations.
FUQUA: Yeah, yeah. In fact, I created a performance program on the computer and about killed two or three computer guys and about bankrupted me getting it done because there had to be so many variables in it. I think in a spread sheet, a ten year spread sheet for cable television, we came up with 128 variables. They were dependent upon so many factors that it just about drove the guys who wrote the program nuts. And even then, the program was never 100 percent satisfactory. If I got rushed for time and made a couple of mistakes I could really have gotten caught in some of the presentations. I would have to go over each individual item again even though it was done on a computer because if I missed one of the variables or two of the variables or three of the variables, I could throw the whole doggone thing out of kilter. I would usually do that and that was one of my roles. The other role was to try to put together sort of a creative team. That would be myself and the engineer and maybe the Washington attorney, if he had been involved at all in franchising to any extent, and one or two of the local guys. We would try to determine what is it that would make us stand out above the other group. What is it that this community really needs. And how do we have to say that we are going to do it.
In those days there wasn't a limitation on the franchise fee. Well there was from the extent that the city could not collect more than 5 percent. I think today they can't collect more than 3 percent. But in those days it got up as high as 5 percent if the city could prove to the FCC that that 2 percent between three and five was going to be used for something constructive for communications in the city. Of course, they could come up with eighteen billion reasons as you can well imagine. That was never any problem. The FCC never turned anybody down to my knowledge. But we would also come up with what could make us stand out a little bit above the other people. That is where all the freebies began to come from.
What we will do is, we will have a studio in the poorest income area in town. We are going to have a channel originating from there two hours a day per week, or two hours one day per week. The local people will express their own opinions on things. Well, that reads good to public officials. Yeah, that looks right. We won't have all those people up here appearing before the city council. Let them talk on television. It wasn't practical and the cost of it was something! It was never the cost of just putting in the equipment. It was the cost of maintaining the equipment. Who was going to be the producer and the director and who was going to show this nut how to operate a camera, and what have you. So, that is where the snowball began to build up. Then it built up to the extent that they were offering just unbelievable things as part of the franchise just to get the rights for the city.
ALLEN: So there were really two villains in the scenario, one the consultants that the city hired and wrote specs that were difficult and the other companies trying to outdo each other in order to get the franchise.
ALLEN: It is hard to say who was the greater of the two because they both were culpable.
FUQUA: Very true, very true. So much of it depended on, in some instances, although not all instances, on the consultant. I was never so frustrated in all my life. What we did in Fairfax, Virginia, is a perfect example. We went in, we had an office in Fairfield. These guys were very serious. All of them were very genuine, good people. There were twenty‑five fellows‑‑genuine, good, local businessmen and all taxpayers, all hard working guys, not a slick guy in the crowd. They opened up an office just to make sure that they got some exposure. They called regularly on the city council members to let them know what they were doing. The city brought in a consultant from somewhere. We had never even heard of him before, nor had he ever been in cable television before. They presented to the city a very unrealistic bid format. My people, rather than accepting that, felt from a standpoint of being good citizens that they should oppose it. I mean, all of the ridiculous parts of the proposal, so they did. They went up before the city council, and so did I, saying that we just don't think this makes sense. Here is what it is going to be added to the base cost of the cable system and ultimately the citizen is going to pay for this. Now, if you think there should be some of those factors in there, then there should be some allocation of that 3 percent of the gross income that you are going to get to that if you think it is that important.
We won that argument with the city council but we lost in hindsight. We lost the ball game, because in the last event, there were like three or four applicants and we really thought we sort of had it locked. But everybody else did too. At the last moment, in came a group out of Richmond, Virginia, a very wealthy company called, Media General which is a nice big old newspaper company basically with some interest in the television business. They came in and put together a franchise application with three of the largest land developers in Fairfax County, put it together in about a month, and put in their application along with ours. We were not even sure who they were. The consultant for the city then proceeded to tear us apart. I mean, it didn't make any difference whether we were better than they were in any instance. He was a past master at playing the game and we lost about two votes in the city council. That really shook me up because these people I was working for were so honest and so sincere and wanted to do a good job. We just did the wrong thing at the wrong time.
ALLEN: You said that you had served as a consultant to some cities on franchising. What cities?
FUQUA: Well they were in the franchise renewal, but never in an initial franchise.
ALLEN: Where were some of the renewals?
FUQUA: Rochester, New York, where they are now having their problem. Raleigh, North Carolina; Tucson, Arizona; Ft. Myers, Florida; Charleston, West Virginia.
End of Tape 4, Side B
ALLEN: So now you are in the mid 1980s and the consulting business has dried up and you looked around for yet another mountain to climb.
FUQUA: True, true. In 1982 I guess it was or '83, I had told one of the Washington law firms that I worked with that I would like to get in the radio business. When I was in Bluefield in the early years, I used to be a sports announcer for one of the local radio stations. Although I had no business experience in radio, I always sort of felt like it was a relatively clean business and that I would give that a try. They found a permit brought up by the FCC for a Class C FM up in Fargo, North Dakota. Because Fargo is out in the middle of nowhere we assumed there wouldn't be too many applicants and so we filed for that permit. That became an almost unbelievable experience. That was in '84. Two years later and a 115 thousand dollars worth of legal, engineering, and filing fees and court costs, we were awarded that grant or construction permit by the FCC. Had I known it was going to cost that much to get, I would have never even gone into it, but it was one of those things that once you got into, you were sort of hoisted on your own. I mean you couldn't get off.
So we built a station out in Fargo, quite an experience, ran it for two years, sold it and made a little bit of money off of it. I felt, "Wow, that's not too bad". I don't want to give you the impression that I made a lot of money because we didn't, but we made a better return than I could have gotten anywhere else on that investment. Once I sold that I started looking around to try and find another radio property. But I hit the radio properties just at the wrong time. When I got to the point where I could buy one, in 1987 and '88, or 1986 and '87, before the new tax laws went in relative to capital gains, there was a surge of last minute selling which took the cost of average radio property from the neighborhood of eight or nine times cash flow on up to as much as twelve or fourteen times cash flow. By doing that, and the banks would probably loan you no more than five or six times cash flow, it literally took the radio stations out of my reach because that meant I had to come up with enough equity to get a station that was big enough to justify that kind of investment. That would take me back down to the bare bones again. So I was hoisted in that case on desire but not having the worry of all the follow through. Fortunately, that has peaked a little bit. In the interim period of time an associate of mine whom I had worked as a consultant for in cable television back in the '70s and with whom I had gotten along very well, asked me to serve on the board of his two radio stations.
So I got to know a little about the radio business. Then he and I started Radio Pennsylvania, a radio network up in Harrisburg. So that is my endeavor today. There were times in the last month that I have looked at that and wondered if that was very bright. But, who knows.
ALLEN: You are now completely out of the cable industry.
FUQUA: Yes. I still have a very small interest being paid out over a period of time for some ownership I had in the Trenton, New Jersey Cable Television System. I got the franchise, I shouldn't say I got, I was the consultant in acquiring the franchise for Lawrenceville and Trenton, New Jersey, sometime back.
ALLEN: And you were paid off in part in stock, etc.
ALLEN: Well, being very knowledgeable but an outsider at this point, what do you see as the future of the cable industry now as we head into the '90s?
FUQUA: Well, there are two things I think that concern me. I think the cable industry didn't handle themselves very well under deregulation. I assume you can't lay the blame at anybody's doorstep, but once the Federal government in essence said to the cities, "you no longer have the right to control rates" the cable industry went hog wild. The current owners didn't go hog wild or the owners at that time haven't automatically gone out and gotten a rate increase, although some of them did, but what has happened was that you got a roll over or stair step affair. Let me give you Tucson as a perfect example. And, I can't remember what the rates are, but I am going to give you this to give you that comparison. Let us assume that the basic cable rate in Tucson was $9.95 by the original group which by the way, Cox Cable was awarded that franchise. Interesting enough, I was one of the applicants in Tucson. I lost Tucson and then was invited back as a consultant for the city. I have never quite figured that one out.
But anyhow, then it was awarded to Cox. Cox was bought out by McCall Communications, which is a big company now in the telephone business, Cellular Telephones, but out of the west coast. They were very frank, part of their deal when they bought the system was they added nothing. They didn't add one other channel. They did increase the quality of their systems somewhat, but not a great deal. They raised that rate to $11.95. Well, they had something like thirty or forty thousand subscribers. A couple of dollars a month on forty thousand subscribers adds up pretty fast. Then in two years the system was sold to Cooke. Cooke went from $11.95 to $13.95, didn't do anything to the system and it has now been sold again. Now you must assume that as the price of cable properties have gone up over the last three or four years. The purchaser is now paying‑‑and I think it is a terrible way to judge it but that is what the industry shows in a lot of the trade press‑‑the price has gone from a thousand to twelve hundred to fifteen hundred to two thousand dollars a subscriber to twenty five hundred dollars a subscriber. If that system is 50 or 55 percent penetrated or saturated, then they know that that penetration figure in future years is going to be in the single digits in the growth per year because there are very few systems in the industry over 65 percent.
So where else does the money come from? It has to come from the rate. So they go back and say well there is no rate control and the people stood still for it, and that is true, people will stand still for it. I don't think the industry yet has found the back‑breaking part, and so they will increase it another $2. That is the only way they could pay $2,500 per subscriber. They couldn't pay $2,500 per subscriber on what the rate was three years ago or four years ago. So I see that trend has been a terrible trend. And I think that trend alone is going to bring the industry back to government control. That is one. The second is that I don't believe that there is a snowball's chance in "Hades" that the cable industry is going to keep the telephone industry out of the business. And once the telephone company gets into it, then you'll have a real battle going on. That is going to be the first truly competitive battle the cable industry has had to face. We have faced the battle of free television and that was no battle at all. That was merely a case of a coining a term. But I think if the telephone company gets involved‑‑and I'm not saying that they are better cable operators than we are‑‑but the telephone company I think, has the patience and the politics that they will begin to develop some of the long range personal services that cable has never been able to do.
We have made so much money from pay television and now from our sports channel and our all news channels and our all weather channels that why get off of a good horse. Today, I doubt that there is a cable system or cable company MSO in the country that spends more than a quarter of a million dollars of that in research and development on other services. For example, fiber optics research wasn't done by the cable people, it is done by the fiber optics development people. AT&T has a gigantic fiber optics setup in Atlanta, Georgia. They have had some pretty heavy marketing people involved for years. So that I see that beginning to make inroads on the cable systems. Once you put it back to the city that the city can control those rates, and as of January 1 you know the FCC has relinquished some of their. They stood up and said, "no, no, no", for years. Now they are going back into syndication of programming that they can have so that stations can have protection against that. Then you are going to see a lot more disruption on that screen than you have seen in the last four or five years. Once that occurs, then you are going to take away some of the pizzazz in the cable television industry.
In that kind of niche, dissatisfaction, or discomfort, more than dissatisfaction of the viewers. That is where the telephone company is going to come in. Whether or not they will get 2 percent of our business or 5 percent or 1 per cent, it doesn't really make much difference. The fact is, they can keep their primary business and still get 1 or 2 or 3 or 4 percent and be a competitor where you or I going into town have to build a new cable system can't afford that.
ALLEN: Do you see these as being overbuild of existing systems and then provision of the same services or provision of totally new services that aren't being provided?
FUQUA: I think what will happen is that they will start out contending that they are going to be providing new services or services that the cable industry is not interested in. I think that is sort of what we used to call ourselves as a master antenna. We are not interested in anything but just carrying television programs. I said that in front of Congress. That is all we want to do. We just want to supply the best television service that we can. We are not interested in producing television. Why, who would ever think of that. Well, that proved not to be quite a truthful statement.
ALLEN: It was true at the time.
FUQUA: Yeah, at the time.
ALLEN: But the times changed.
FUQUA: But the times changed and that is what will happen with the telephone company. I would say, Bob, that if you and I live long enough, who knows whether it is ten years or fifteen years from now, cable will probably be a different animal from what it is today. I bet you there will be a great big animal out there providing the same primary big income producing services and that will be the telephone company.
ALLEN: And you do see that as an overbuild to services coming into your home.
FUQUA: Right. I think, the biggest problem is going to be, it is going to take away some of the profitability, the cream of the cable business because it is not going to be a primary source of income to the telephone company. If they say, well a good return for us would be 12 percent, we could do that and on a rate of $8.95 because we are not about to sell our business. The cable operator says, well 12 percent is not a good return, but who is going to buy me if it is only 12 percent and you are going to stop all of that. That is the reason that TCIs and the ATCs and the Uniteds and Cox and all them, if they don't buy everything they can possibly acquire in the next year or two they are crazy because the price is going to become prohibitive. I mean the price will come down, but the rate of return is going to become prohibitive for them.
ALLEN: The ratio of price and rate of return is going to change.
FUQUA: That is right. That is what I see.
ALLEN: So, you're not seeing cable as a good place to invest money over a long haul.
FUQUA: Well I don't think so. Certainly not over the next five years. Now I have been wrong about a lot of things, Bob, and I can be totally wrong. If you would have told me what cable is selling for today five years ago, ten years ago, I would have said, well, Bob, I don't know what they feed you up there in State College, but I am coming up and have some of it because it must make you feel good. But, I think once Congress gets back into the act, once you have governmental control, I don't care what the business is, governmental control to me spells lids, and lids spells lack of creativity in profit factors. I don't care what business it is, once the government gets in the act and says we will now tell you what you can't do, maybe not what you can do, but what you can't do, then you've got a problem.
ALLEN: And this governmental control is coming from really a lack of foresight in the cable industry where during the period of nonregulation the industry has not behaved as maturely as it might have?
FUQUA: Yeah, and I don't know whether you could have expected it to. But you have to face it. Strat should be given all the credit for this, he was the epitome of always demanding nonexclusive franchises in the early days. He was brilliant from that standpoint. The city would say, "Well, why, we will give you an exclusive?" You are the only one. "No, no, no, we don't want to be the only one". We want to let anyone else come in, that's fine, we are just a master antenna. And as a consequence cable kept away from the onerous public utility concept that the telephone company has. Now the telephone company today still operates under that. They have been pretty doggone profitable. But you don't see telephone companies changing hands because you couldn't afford to buy a telephone company today. If you knew what the rate of return would be and if your interest rate is 10 percent and their rate of return is 12 percent very few guys are going to sit there for twenty years for 2 percent.
I think that is basically what is going to happen to cable. The lid on telephones by the public service is what controls the total value of the telephone companies. Not that its own operations doesn't create it, but it stops the dramatic growth in prices of the telephone companies. That is what will happen with cable television. So they say to you in State College, "You cannot have your rate any higher than $25 without coming back to the city council." Then the old guy who is looking at State College says, "Boy I think I will buy that." Council says, "Well, wait a minute." Let's see, if it is $25, and they have "X" number of subscribers, how many more can they get up there? Then brand new services have to come on board. Maybe that is "Pay Per View" in some way that we haven't seen yet. But, if we can't raise the rates, where are we going to pay for this? That is what I foresee happening.
ALLEN: What about programming? Do you see any new trends in the way of programming?
FUQUA: Well, not any that I could point out. I am surprised, really, and I think the guys must be using mirrors and smoke. Do you watch the weather channel on cable?
ALLEN: Uh, huh.
FUQUA: I am surprised the amount of advertising those people have. And I am surprised that it has made the grade. Now I understand that there is a new sports channel coming out that is going to be competitive with ESPN. Great. But we saw the efforts by NBC which is pretty savvy, in trying to come out with another news channel in opposition to Turner's CNN and it didn't work. I don't know how many of those you can have, Bob. There may be other services out there. If you would have told me about Home Shopping Network, the gigantic big industry that it has turned out... But I think the dew is off the rose in that now. They are having all kinds of problems. There are probably a lot of services out there that I haven't heard of. I am impressed with the Real Estate Channel here and that guy, whoever dreamed that up, whether or not he makes much money. I guess if he has enough of them on enough systems in enough parts of the country, he does. It is the old thing with Woolworth. When they asked the president of Woolworth one time, "Well how do you operate with just a 5 percent margin?" He said you just have to have a great big ball to take 5 percent. So that is the reason we have stores all over the country. He said if I had to operate one store, I wouldn't do it. That is the way I see what is happening in the magnitude of the spreading out of the programming services.
ALLEN: The technology can provide an almost unlimited number of channels.
ALLEN: But somewhere there has to be a limit in the amount of programming that can fill up those channels.
FUQUA: Well, I am very surprised that the cable operators haven't gone more to various kinds of clusters. Once again, this is probably because most of their city contracts won't allow it. Although I am not sure they could break them or whether or not they are just concerned to bring it up.
ALLEN: What do you mean by that?
FUQUA: Well maybe a cluster that involves just the local stations for $3.00 if you follow me. The local stations and three independents for $6.00. The local station and three independents and one pay service $20.00. You build it up in clusters not just one channel but in clusters until you get up to forty or fifty or sixty dollars. For me if you would take CNN and ESPN and Channel 8 which is our public broadcasting, I would pay equally as much as I am paying for all the rest of it for just those three channels. Those are the meaningful channels to me and I don't know that we know yet how to evaluate that. But I think once the telephone company or somebody else comes in and begins to peck away at our business I think we will probably become more creative in how we package it. It may be that the day is coming when you have a check-off list. I will take this for fifty cents and this for sixty cents and this for eighty-five cents and this one for forty cents. You know the computer decides what you are going to get, the computer bills you on what it is.
ALLEN: This is a long way from the three channel system on poles in Bluefield, West Virginia.
FUQUA: In Bluefield, West Virginia, that is right. But I guess that is it in a nutshell. You have covered just about all there is to know about Gordon Fuqua.
ALLEN: Well, thank you very much on behalf of the Cable Television Center and Museum. We really appreciate your willingness to spend this time, and we will look forward to adding this to the rest of the material that is available in the Museum.
End of Tape 5, Side A