Interview Date: November 26, 1991
Interview Location: Pleasant Gap, PA USA
Interviewer: Marlowe Froke
Collection: Penn State Collection
Note: Audio Only
FROKE: This is the oral history of Everett Mundy who is the president of Tele-Media Corporation with headquarters in State College, Pennsylvania. Their corporate office is in a small community outside of State College called Pleasant Gap. We are in the offices of Mr. Mundy. It is the 26th of November. Everett, we will be asking about your family, career, work in the cable television industry and also get your views about the future of both the company and the cable industry.
Mr. Mundy is an engineer by trade. He has been in partnership with Robert Tudek in the development of Tele-Media Corporation. It is a unique partnership. They have been together now for more than twenty-five years in terms of their corporate activity but that professional relationship goes back even earlier than that.
Tele-Media Corporation has approximately 325,000 subscribers in the United States as of this date, but it really is the second generation of Tele-Media Corporation. The first generation company, which was somewhat larger, was sold in 1984 to TCI, one of the other large multiple-system owners in cable television.
Ev, thanks very much for taking time for this interview. I know you've got many other things to do.
MUNDY: Well, I enjoy it. Actually I get kind of excited anytime I have an opportunity to talk about the cable industry.
FROKE: You're not only proud of the cable industry, you're proud of Tele-Media Corporation.
MUNDY: No question about it.
FROKE: And you should be.
MUNDY: We have a lot of fine people and I've enjoyed a partnership over the years that's a rarity, really, when it comes to partnerships.
FROKE: He plays golf and you do the boating. Is that right?
MUNDY: That's about right--boating and flying. Of course, I quit flying about three years ago. Bob and I flew together for approximately twenty years. That was the way he and I traveled. In the early days we didn't have good air transportation out of State College so we either leased or owned our own aircraft. We traveled constantly together in that fashion.
FROKE: That shows a great deal of trust on his part.
MUNDY: Well, I came to him as a commercial pilot. I started teaching flying during World War II. So I did have a bit of qualification that gave him some confidence, and we went on from there.
FROKE: In reading the history of your corporation, I noticed that you were born in Lewistown, Pennsylvania.
FROKE: What were your parent's occupations?
MUNDY: Well, my father was a printer. He met my mother in Philadelphia. She was nursing in Philadelphia and he was with a publishing company. They ultimately migrated to Lewistown because mother's home was just about twelve miles north of Lewistown up in a little community called Horningsford, Pennsylvania. My grandfather had a truck farm, and he was a railroader on the Altoona division. Horningsford was one of the stops for passengers.
FROKE: So your grandmother and grandfather also lived in Pennsylvania?
MUNDY: Oh, yes.
FROKE: Were they born in Pennsylvania?
MUNDY: Yes, both of them.
FROKE: So you have to go back four generations before you trace your ancestry to another country.
MUNDY: That's right. I have never followed it one hundred percent, but my father always told me that the original Mundy's came over very early--real early--to the new state of New York. Ultimately, my grandparents migrated to Dover, Delaware, and Grandpap on Dad's side was a chef for Campbell Soups Company in Dover. Of course, Dad and Mother wound up in Lewistown. He went with the Sentinel Company and was what they called a stone hand. In the printing business a stone hand is a fellow that sets up the pages as the print comes off the linotype. He'd make up the ads and so forth. Eventually he got lead poisoning as a result. Of course, in the old days they didn't know much about those things.
FROKE: This was probably the turn of the century--1910 or 1920, somewhere in there.
MUNDY: Well, Dad was in World War I and ... yes, it was around the '20s I would say. I was born in '24.
FROKE: The Lewistown Sentinel is the same Lewistown Sentinel that exists today.
MUNDY: Most certainly. As a kid I spent a lot of time in that place.
FROKE: Did you ever think of becoming a journalist or a printer yourself?
MUNDY: I suppose you go through that, but my interests weren't really in that line, nor Dad's. He started as a hobby to build custom radios before you could go down the street and buy radios. He built radios--and sold them as custom units. In fact, half of the second floor of our bungalow was his workshop where he did this. Of course, I had my corner over in the workshop and that's really where I got my early exposure.
FROKE: You're familiar with the early history of radio and the interference from one radio station to another.
MUNDY: Oh, yes.
FROKE: Finally the Federal government stepped in to get things cleared up a little bit.
MUNDY: Right. My radio days started when I was in high school. I worked for WMRF in Lewistown as a transmitter engineer. That was as the war was cranking up and in those days we took a preliminary examination, not necessarily highly technical, and the chief engineer would sign for us.
FROKE: This was a third class license as they say.
MUNDY: Yes, but we were still authorized to operate the transmitter and there wasn't such a thing as remote stations in those days. There was a transmitter engineer on duty twenty-four hours a day.
FROKE: You got a very solid background in the media as a youngster. You had the newspaper side, you had the advertising side, you had the radio broadcasting.
MUNDY: And I loved the radio. I can remember one of my jobs at that time was always seeing that the remote broadcast for Saturday night was taken care of and then the equipment was moved to whichever church was going to have the Sunday morning services. Those were happy days for me.
FROKE: Going back to the very early days--and you might not be able to recall this because of your youth-- Penn State operated a radio station back in the 1920s and continued it until probably about 1932 or '33 when they turned in whatever authorization they had.
MUNDY: I wasn't familiar with that, unfortunately.
FROKE: Apparently the University wanted to avoid the regulation of the Federal government. So rather than go through the application process, they closed down the radio station. It was one of these big power stations that was common at the time--a 100,000 watts, a 150,000 watts--and they were getting listeners down in Cuba and out in California and Canada, all over.
MUNDY: Well, Penn State's always been active in that line, as I recall. In fact, I have one of the transmitters that was built in the EE Department and still have it on the air. It was built, probably ... Well, I'm told the story that it was built when Byrd went to the South Pole. It used to be over in the old ORL Building and it was one of the communicating points that kept in touch with him.
FROKE: This is shortwave?
MUNDY: Yes. It was left there after Professor Crosley retired and went to HRB-Singer and when the old-timers left HRB-Singer, nobody was using it--there was only one or two around that knew how to tune it--so I finally got it, restored it, and I've had it on the air as recently as night before last.
FROKE: My land. I'll tell you what, in the Cable Center and Museum and from the same source, we have one of the old carbon microphones that was given to us by a man over at the Applied Research Laboratory.
MUNDY: Okay. It's the one with the suspension.
FROKE: That's right. The one that holds it in place and then a couple of old RCA dynamic microphones that are a little bit younger than that, I guess you would say.
MUNDY: Well, this transmitter eventually, after I'm not around anymore, I'm going to offer it to the Antique Wireless Association, or at least that was my thought, for their museum up in Canandaigua, New York. I've been trying to find somebody to write a history on it. I think Bud Yonkers might be able to help.
FROKE: Bud is still around?
MUNDY: Yes. Somebody said he moved back to State College.
FROKE: I don't think so, no. He was in town to help celebrate the twenty-fifth anniversary of the public TV station and I saw him casually then. He turned over to us some personal records about the TV station at that time. But I do have his address and I can get it to you.
MUNDY: I talked to his wife. He had an ad in our AWA bulletin that comes out for some of the stuff he has. It was the first that I managed to find out where he was. A call to New Jersey located Bud. He happened to be in the Navy hospital at the time very briefly, so I missed him and I haven't talked to him in years. But I was at WMRF in Lewistown when Bud arrived on his motorcycle to be an engineer at the station. He was coming from the RCA school in New York. He had just completed his work and hadn't got his license.
FROKE: So Bud worked with you before he came with the University.
MUNDY: Yes. He was from Philipsburg.
FROKE: Eric Walker brought him into the University to help out on electronics.
MUNDY: Yep. And then I worked in the lab, ultimately, after I came back from the service, from the Korean deal.
FROKE: As a research associate.
MUNDY: With Bud in the old engineering building back in the lab next to the president's house. So I've known Bud for many years.
FROKE: We'll pick up some more detail on that later but let's go back again, if you would.
MUNDY: I'm sorry. I get ...
FROKE: No, no, no. This is very, very good because it provides us with an outline to move ahead here at a later time. How many brothers and sisters did you have?
MUNDY: I don't have any brothers or sisters.
FROKE: You're an only child.
MUNDY: Right. My mother taught school.
FROKE: Your mother's name is?
MUNDY: Ella. She taught school in a one-room country schoolhouse for some thirteen years.
FROKE: Were you a student of hers?
MUNDY: No, no. She married rather late in life. So there was only one child. She taught over in the general area up where I said ...
MUNDY: Yes, up in that area. There was a schoolhouse that sat right close there that she taught in for years.
FROKE: As a school teacher she also guided your homework, I would imagine.
MUNDY: Oh, my, oh my, yes. She sure did. I'm afraid I was disappointing to her at times. She had the idea that I should be either a preacher or ... I had an uncle who was a surgeon in Brooklyn, New York. He was a naturalized citizen--a Spaniard--who came over here during World War I. He offered to put me through medical school if I was qualified when I got to that age, providing I'd come to Brooklyn and practice with him so he could get out of there. He wanted to get out of the city in the worst kind of way. That never materialized. I purposely flunked a Latin course so that it would get out of everybody's mind that I was ever going to go to be a doctor. Of course, that was one of the disappointing moments for my mother. I'll never forget that.
FROKE: She was all wrapped up in those professions, so to speak.
MUNDY: Yep. I either wanted to get into electronics or fly airplanes.
FROKE: You had that interest very, very early?
MUNDY: Oh, yes.
FROKE: Flying airplanes, specifically, I'm referring to.
MUNDY: Oh, yes. In fact, I got my driver's permit when I was 16. I soloed an airplane at the same time because I'd work on the weekends at the airport-- the Lewistown Airport--with Jack Kratzer, an old- timer over there. Well known, in this area, by the way. His old homestead is the brick home, going to Lewistown, as you pass the Milroy exit on the left-hand side right catty-corner across from the manufacturing plant that makes hi-fi equipment. That's his old homestead. He's an old barnstormer and he appears in my life later on, too, by the way.
FROKE: I see. Terms that come up in different things that have been written about you are trustworthy, steady, reliable.
MUNDY: I was raised in a religious home.
FROKE: Church every Sunday?
MUNDY: Oh, yes. We used to go to the Brethren Church over on Shaw Avenue in Lewistown. My mother was active with the church. Of course, I was there every Sunday. And then the people that I've been fortunate enough to meet as I went along. When I was in high school, I had a teacher in the electrical department who was a great inspiration. I was in the academic program in high school and I decided in my junior year that I was going to step out of that. At that time they had the vocational school in Lewistown. I went over there to see if I could transfer and they said the only way I could transfer was if I could pass the examination the students took the year before to go to the next grade. So I took the examination and passed. So they let me into the vocational school and I spent some time in the drafting department and then I transferred to the electrical department. Mr. Bensel was the instructor there. He was very influential in my life, so to speak--morally and every other way. He was just a fine gentleman.
FROKE: He gave you guidance toward a career?
MUNDY: Oh, yes. Primarily, of course, at that time though, it was in power.
FROKE: Public utility-type things.
MUNDY: Right. But at the same time--junior year and part of the senior year before I went with the broadcast company--I worked out at an apprenticeship with a radio service place that was right close to the vo-tech school. A fellow by the name of Martin Ort was the owner. He was also very influential in my life. He had some basic moral standards and he worked hard with me. Of course, I had a fair background when I got there. His nephew, by the name of Fisher, was leaving because he was graduating from high school, so I got to go into the shop. Fisher went with AT&T and I went into the radio shop. It wasn't too long after I got there, that Martin went to Washington to the Navy but he left me with the shop until it was convenient to close it. I ran the shop after he left town. When I got the job with WMRF, we closed the shop. And then I got into heavy industry and I had some very excellent people that helped me. So there's been a lot of people involved.
FROKE: Was it the high school vocational teacher who guided you to these various opportunities.
MUNDY: Pretty much so, yes.
FROKE: Did he refer you to the radio station and refer you to the electronics shop ... introduce you to the people?
MUNDY: Basically, yes. Now the radio station, as I recall, came about from an old ham that I knew in Lewistown by the name of Vernon Knepp. I'll never forget him. That's when we used to have the transmitters built in the wooden racks--with the open chassis. He was a great twenty meter man. He had his equipment in a room upstairs in his house and I used to go over there. I always loved to see the gas tubes glowing, you know, when you modulate it. But I can remember those days. I spent many, many evenings with him. But he was the one who recommended me to the radio station.
FROKE: It's too bad that those kinds of situations are not more prevalent today as young people grow up.
MUNDY: That's right. I don't know if it's the fact that we don't take the time or we don't care. I haven't decided that yet.
FROKE: But the relationships between young people and older mentors does not seem to be nearly as prevalent as it was when we grew up.
MUNDY: No, and I think it's an extremely important part of a young person's life.
FROKE: People need role models, they really do.
MUNDY: That's right. All the way along the line I've been fortunate in that. It seems that every phase that I went into there was always some elder person there that would work with me and help me.
FROKE: Took a personal interest in you.
MUNDY: That's right. Even in heavy industry and power.
FROKE: What year did you graduate from high school?
FROKE: And did you go directly into the military then?
MUNDY: No. I went to Middletown as an electronics technician. Wound up in the radio division. At that time Middletown was a facility that either equipped military aircraft for special missions or reworked them as they were being recycled for major maintenance. For instance, we prepared Doolittle's B-25s in Middletown. Specialty work went through there.
From there I got bored because I wasn't going to the service so I enlisted in the Navy. Jack Kratzer was with the airport in Bellefonte which was contracted to the University for the screening of the Army and Navy cadets at that time. He and my mother were rather close. Dad was in Washington at the Government Printing Office and Jack always checked up to see where I was and so forth. So, he got a hold of me. They were giving an entrance exam for Army Air Corps (not the Air Force) flight instructors at Westminster College at New Wilmington. Mother convinced me to go take the exam. She didn't want me to go to the Navy. I was home waiting for the physical and to be sworn in. So I went and took the exam. Jack took me out there. He was teaching at Gramham Aviation in Butler at that time. I took the exam and passed. So I went down to the old post office building in Pittsburgh and signed up and started off from there as far as the flying end was concerned.
FROKE: So you became one of the people who is responsible for the training of pilots who were in the Army Air Corps.
MUNDY: Right. At that time they didn't have any uniform training program. Most important was the fact that without the training program organized, they had no way of evaluating the students uniformly. So they put us, as prospective instructors, through that whole program. When we came out the other end, we were the people that had the program in hand and were going to administer it.
FROKE: And you were 18 or 19 years of age at the time.
MUNDY: Let's see, when I actually went into the program I was 18. I got my commercial ticket when I was 21. So, I went through quite quickly.
FROKE: All of that early work over in Lewistown, really prepared you for this activity.
MUNDY: Yes. And I love to fly. Still do. But I don't at the moment because the urgency has been reduced. I was on the airport authority over here when we developed this airport.
FROKE: Brought it down from Black Moshannon.
MUNDY: Oh, boy, what a battle that was. I'll never forget that one. I don't know if you happened to go to the court hearings on that situation when those fellows over there sued us.
MUNDY: Anyway, it was all very interesting and I arrived in this area ... I was finishing out a course at Marshall College in Huntington, West Virginia, pursuing the instructor's career. Mother told Jack when I was coming home. He left the paperwork there for me to go pick up an airplane the government had bought, and bring it here to Bellefonte, to the University. I did and that's how I arrived here. That's how I got in this area. So for that summer I made a number of other trips and brought airplanes in for them and then I went back to the next school. But that was how I arrived in Happy Valley.
FROKE: Again, just to make sure that I followed it correctly, you came out of Lewistown and you took the examinations then as a flight instructor and were assigned in Delaware for some training ...
MUNDY: Not in Delaware. Actually I was assigned the first time at Westminster College and flew out of New Castle Airport. But our academic portion of the program was given at Westminster. And at each case as we went along we went to one of the colleges or universities for the academic portion and then we flew at one of the contiguous airports to that facility.
FROKE: And Marshall College down in West Virginia was a part of that.
MUNDY: Right. And from Marshall College it was to Tri-Cities Aviation School up at Endicott, New York, and then from there to ... No wait. First it was Concord, New Hampshire, St. Paul's School. Boy, I remember those women--they really cooked great meals. Oh, it was great. But we took our academics there and flew with Wiggins Airways for our training and then from there we did instrument work at Tri-Cities Aviation and then the final part of the program was at the University of Minnesota where they gave us the psychology of teaching and all that stuff.
I was on the farm campus. It was ten Army fellows and ten Navy fellows that flew out of White Bear Lake in the wintertime--open biplanes. But it was great.
FROKE: What were the planes that you used in training?
MUNDY: I started off with Navy N3Ns and the Steermans, which were primary trainers, and then into the BT series--BT-13 series, (I never trained in the AT-6s) and some multi-engine work in the Cessna family of airplanes. I was discharged as officer surplus when they closed the cadet program down, and then I was flying for Piper in the experimental department.
FROKE: This would have been about 1945 or '46.
MUNDY: I was discharged around '44, I think, as surplus. I went back in about '45. They had to reassign me in the Air Corps. So, I wound up with the Free French on B-26s as an instructor/engineer, an enlisted man. I did some teaching there because there were a lot of High Point officers coming back, and ready for discharge. They were applying for airline positions but they had never had the civilian version of the instrument flight requirements. So they put me in as a co-pilot/engineer on 26s in the flight test division. I'd fly these fellows and put them under the hood and get them oriented to the civilian version of the instrument test. That was a good deal for me. That's how I spent the rest of my time.
FROKE: Where were you based at that time?
MUNDY: Selfridge Field, Michigan. Barksdale, Louisiana, and Selfridge Field were the two installations where they assembled the Free French and B-26s--the air crews--and then they also gave the gunnery work and so forth to the fellows who were flying the P-47s. In fact, I stood review for General DeGaulle at Selfridge Field when he came over to the United States for a visit during the war. When you stood in review you always knew where he was because he was very tall and had that big hat and you could see the hat going up and down the rows of the troops. You knew exactly where he was.
FROKE: He was about six foot six or six foot seven. A very tall man and imposing.
MUNDY: Yes. That was a good experience.
FROKE: From Selfridge you were discharged again?
FROKE: And that took you to Piper.
FROKE: At Lock Haven.
MUNDY: Yes. And I was in the experimental department. I flew for experimental and sales as well as worked in the experimental department, primarily on the electrical systems. They had some production airplanes for the government at that time but we were working more on the post-war family of aircraft, which was interesting. Most of those fellows were eventually moved down to Florida when they opened their division in Florida.
FROKE: Did you meet your wife at that time?
MUNDY: I met my wife when I first came to Bellefonte and stayed that summer. She was working in a restaurant. I met her there, and kept coming back, and ultimately we were married and that's it.
FROKE: In Bellefonte and your family home.
MUNDY: Yes. I had been away some, traveled quite a bit, and so on. But always the family has been based in Bellefonte.
FROKE: Is your wife a native of Bellefonte?
MUNDY: No, Houtzdale. An Irish girl. McDermott was her maiden name. She still has a brother living in Houtzdale. She came over to Bellefonte when her sisters moved over here. So, that's how we got together.
FROKE: And you have how many children?
MUNDY: I have three. I have a daughter, Connie, who's with Tele-Media down in Richmond, Virginia. I have two sons. Tom is the oldest boy. He was with corporate development. He's a graduate of Penn State and an accountant. He is in Richmond. I have a younger son who's a Penn Stater. He didn't graduate. He got impatient in his senior year and wanted to open computer stores. He opened two of them. He and his wife, who is a Penn State graduate, are now based in Greenville, South Carolina, operating a security company that we've had down there now for about a year and a half and are building up. So that's the children.
FROKE: And the security company is part of the process of diversifying Tele-Media.
MUNDY: Yes, but it's actually domestic and commercial security systems.
FROKE: Not necessarily tied to cable electronics.
MUNDY: Nothing, that's right. In Florida we're transporting the data on cable systems involved in security installations. Jim was in charge of data processing back here when he was located in Bellefonte with the company, but he wanted to get into security and we had an opportunity down there so the pair of them moved down. Linda, his wife, had been with Tele-Media from the time she was in high school. My secretary, Mrs. Howell, was at the University for awhile and with HRB and with Jim Palmer, clear back when I first came with the cable industry. Linda has been with us a long time, during which she served in a wide range of responsibilities. They're all doing a great job. I'm very fortunate along those lines.
FROKE: Your children were born during the time period, say 1946 to 1956.
MUNDY: Yes, that's about right.
FROKE: You left Piper and came with the University.
MUNDY: No, there were a couple stops ... one stop in between there. I had a brother-in-law who was a foreman at then Titan Metal Manufacturing Company and they were having some problems in the electrical department. It was an opportunity, he thought, for me to come up here. Of course, with Piper it was always a very turbulent environment. Not the most reliable situation. So I came up and took an interview with Carl Gettig, from Pleasant Gap, foreman of the electrical crew, and Grey Tressler, who was in charge of the plant down here. As a result of the interviews, I was hired.
So I went to work there and, again, I met some gentlemen that were extremely helpful. They put me on automated equipment. They were having some problems with the extrusion presses. Particularly the new one at Plant 4. There weren't too many, I guess, that understood how the thing worked. They thought it was operated on pressure-type instruments but it was ... Well, that's a long story.
I was there for some time and wound up taking care of substations and also the Ingatron Rectifier equipment, and so forth, in Plant 4, for the mill. Again, people were very helpful, including Grey Tressler, who was extremely helpful. You know, he was an electrical engineer by education but mathematics was his forte. He'd get a phone call and on the phone, while he was talking to the customer his secretary would get the prints, he'd calculate what it would take to make a change. He was quite a guy. He also, later in life, was on the airport authority over here with me. That was a rewarding experience.
From Titan I went back on active duty during the Korean War; and when I came back from that I only stayed a short time and then I went with Standard Lime. Martin-Marietta came after me to come out and automate the plant. They had all the equipment setting there in the racks and the cabinets, but it was never put on line. It was designed that from the time the stone came out of the crushers and was separated to be fully automatic until it wound up as crushed limestone out at the other end. So I took a contract with them and put all that equipment in place--electrically not mechanically. Then I left there and came to the University as a research associate.
FROKE: When you went into the Korean War, did you also train pilots?
MUNDY: No. I went into the maintenance aspect. I did train pilots but not for the government. Off-duty hours I trained on the G.I. Bill in Clarksville, Tennessee. When I went back on active duty I was a civilian that maintained the aviation section for the 200th Field Artillery Battalion locally. Of course, we got called to active duty and I left with them. But I did teach flying down there, off post. Ultimately, I was in charge of the maintenance at Fort Campbell, Kentucky, for Army Aviation as a master sergeant.
FROKE: In addition to Fort Campbell, where else were you stationed during that time period?
MUNDY: During the Korean War my entire tour was at Fort Campbell. They started to break our outfit up. I came up for overseas shipment--turned out to be a supernumerary on the shipment. I went back and the 11th Airborne Division left which put the command of the post back to the post cadre and they asked to have me transferred up to post headquarters to operate the aviation section--the maintenance side of it. Which I did and taught flying out at the civilian airport. Once again, they finally decided to throw me out of the service and send me home.
FROKE: With Martin-Marietta you then went on to take a position at the University. How did that come about?
MUNDY: Ah, how did that come about. I think it came about through my association with Bud Yonkers. He needed help and had told me of this several times. I had my work pretty well finished. I had automated the plant, changed over the power distribution in the mine and converted the substation to 44,000 when they built the new line in. So I went up to Bud and again I was interviewed up there. Those guys all interviewed me, anyway, and they hired me there. When I left, I operated a television repair business here in the county full-time for a brief period of time. The University called me back when they had the projects over in the temporary graduate student housing area. There were several buildings there that were labs. Engineering mechanics had a lab over there. I stayed there through the period of time when the plans were being cast for the new engineering buildings. In the meantime I went out on a lot of projects. We set up the first airborne stress analysis for Piper that they had. Before that it was all static stress analysis. Engineering mechanics attached the strain gauges and everything and I set up the instrumentation and monitored the stuff. I stayed at the Engineering Electronics Group until I was transferred over to work with Bud Yonkers. When he left, I took that lab over and I worked with the General State Authority letting the contracts for all instrumentation in the new engineering buildings. That's the last project I did there.
I got to the cable business when Palmer came over and wanted help at the then Community Engineering Corporation. He had transferred from HRB-Singer over to run CEC after Dr. Brown died. He wanted an R&D department set up and a production test department because there was beginning to be a conflict of interest between Community Engineering and HRB-Singer. There was ownership from HRB- Singer--Dr. Haller and Fred Thompson. There were others. At that time a lot of the UHF equipment that was developed at Community Engineering was being sent over to HRB for final tests. So, anyway, I set up CECs R&D department along with production tests. Finally they came to me--Floyd Fisher and Palmer--and offered me stock options if I'd come over with Community Engineering. And that's how I got into the cable business.
FROKE: I'm going to interrupt you for just a minute to flip the tape here and then we'll pick up the conversation on side 2 of this tape. All right?
MUNDY: All right. Fair enough.
End of Tape 1, Side A
FROKE: This was the time period when Eric Walker had come to the University. First out of the Applied Research Laboratory and then going to the Department of Electrical Engineering and moving on from there to become the dean of the college and then the president of the University.
MUNDY: He followed Eisenhower, didn't he?
FROKE: Yes, he did.
MUNDY: I have a very humorous story about that if you want to hear it.
FROKE: Yes, go ahead.
MUNDY: The antenna site for the State College cable system used to be in the water tower at the University.
FROKE: The one by the Nittany Lion Inn?
MUNDY: That's right. It supplied all of State College. The cable wasn't all through campus at that time but the president's home was on the cable. We had just moved our antenna to another site although we had our lab and offices on College Avenue. An emergency came up where I needed some equipment. We still hadn't removed the equipment from the water tower and I thought, "Boy, I have over there just what I need to cure this emergency." So I came over and stripped probably three or four channels out of there, automatic gain controls, and pre-amps. And suddenly our emergency was cured. Palmer found out that everything was okay but he couldn't figure out how we resolved the situation so quickly. So he came into the lab to me and he said, "How'd you get this thing going so quick." I said, "I went over to the water tower and I just stripped some equipment." "Oh my God," he said. I said, "What's wrong?" He said, "The agreement is that that stays there until we get the cable on campus for the president's house." As I recall, Eisenhower was president at the time. But that created quite a fuss. Needless to say, I worked late that evening getting the system back on the air on campus.
FROKE: Community Engineering Corporation evolved into C-COR, correct?
MUNDY: Well, it went from Community Engineering to C-CO to C-COR. Now the C-CO name was dropped because there were several other C-COs in the country. One of them was a trucking company; one of them was a company that built very sophisticated camera mounts, tripods. In fact, I used to work the IEEE show every year for C-CO. I was always the one that went down ahead of time to set up our booth at the coliseum. I arrived at my booth location and there was C-CO equipment but it wasn't my equipment.
FROKE: Immediately you knew you had a problem.
MUNDY: We had a big problem. So we then became C-COR.
FROKE: Was there a financial settlement on it or just an understanding ...
MUNDY: Not that I recall, no.
FROKE: They just suggested that you change your name.
MUNDY: That's right. We had no choice and that's what we very promptly did. Mimi Barash redid, of course, all our sales brochures and so forth. She took care of our ...
FROKE: Barash Advertising was the advertising agency for you.
MUNDY: Yes, for years.
FROKE: Trying to pick up a little bit of the history that led to the establishment of C-COR. The people in Haller, Raymond & Brown, HRB, were very much involved in Community Engineering, a corporation that you already alluded to.
MUNDY: Right ... Dr. Brown, Dr. Haller, Fred Thompson.
FROKE: They also had very, very close ties to the University.
FROKE: They were academic leaders within the University, so to speak. So while the work that they did had a tendency to stimulate industry, at a time the company had grown to the point where there began to be conflicts between their responsibilities academically as well as their work with the corporation.
MUNDY: That's correct and that's where the parting of the ways came. Of course, Fred Thompson and I worked together very closely. At one time they wanted me to come to HRB but I didn't go.
FROKE: Was Community Engineering Services founded by Haller and Dr. Brown?
MUNDY: Dr. Brown was the principal. I don't know exactly when Haller came into it. Dr. Brown was the real founder. From his old notes, I noted he actually developed some of the techniques that we use in the cable business today. He was the father of them. For instance, cable power. That's strictly Dr. Brown.
FROKE: Was he focusing at that time with Community Engineering Services on cable television or were there other aspects of Community Engineering Services?
MUNDY: Basically cable television and while he was attempting to develop a line of equipment to make them become independent, in the meantime they took on a distributorship from Jerrold Electronics. At one time they actually were a distributor in this area for Jerrold while they were developing their own equipment to become independent.
FROKE: Milton Shapp's records indicate that Jerrold was founded in 1948. Did Community Engineering Services come at about the same time or later. Do you have any recollection?
MUNDY: I don't know exactly but I'm going to make a guess it must have been about the same time. They had some equipment. Their real goal was to become independent with their own line of manufacturing--OEM Manufacturing--that was their real goal in the whole situation.
FROKE: What was it that held them up from becoming more prominent at that early time? I would imagine it was capitalization.
MUNDY: Well, that's true. In those days ...
FROKE: Not very many people believed in cable.
MUNDY: That's the point, and particularly the financial community. It was mostly ma and pa operations. That was our biggest problem in those days. Monies were not being spent for R&D work or for the capital investments to build plants. We used to build plants with connection fees. We'd get $250 a connection, pre-sell the system, and that's where we got our money to build the system.
FROKE: The consumers themselves gave you the money.
MUNDY: That's correct. That's the way it was done. That's the way Shapp built every one he ever built. So we did the same thing. The bankers were still not educated in cable. They were not educated in cash flow businesses. They had to have hard, cold assets. That's all they knew when they started to finance something. Centre Video was spun off from C-COR. This was done to let both companies develop. That's when I met my partner, Bob Tudek. He came in as vice president and general manager of Centre Video. But the bankers still didn't know. We actually used to try to sponsor the presence of a different bank each year at the national convention so they could go to the seminars and they could see the product and meet other bankers and so forth. So it was a long, long time getting banks educated to what was going on and then they were only few and far between. That was the hold up in our business. Plus the fact that there was the in-fighting going on back in the research and development between the vacuum tube and between solid state equipment and that was a very vicious battle. But they still couldn't let go of the vacuum tubes because they didn't have the transistor equipment to do the job. And that's a long story.
FROKE: This relates in part to the ongoing difficulty of introducing new technology when you still have not depreciated existing technology.
MUNDY: That's happened to us for years. Our plants would last a lot longer ... we have to replace them or upgrade them to new technology.
FROKE: Did Community Engineering Services pre-date Centre Video as a distribution ...
FROKE: Let's say that Community Engineering Services was research and development and a touch of manufacturing.
MUNDY: And they had engineering services for other people. And then ultimately they put together some local financing--investors--and they built first the Bellefonte system with the original investors from down in that area. And then after that came the State College system. But they were independent. Two independent groups of investors in those companies--they weren't one.
FROKE: But the same leadership.
MUNDY: That's correct.
FROKE: Did Jim Palmer and Barbara Palmer get involved in the very early days or had ...
MUNDY: They got involved shortly after Dr. Brown's death.
FROKE: So Community Engineering Services had been established before Jim Palmer joined ...
MUNDY: Oh my, yes. He was at HRB-Singer, as a matter of fact, as an engineer. They came to him ... Haller came to him and asked him to come over and take this company over and see if he could get it rolling. Basically, Jim's background is power. He was an engineer, at that time. Before he came to HRB, primarily his work was in automatic high voltage switch gear.
FROKE: And when you say take it over to get in rolling, you mean the Community Engineering Services or you mean Centre Video.
MUNDY: Centre Video didn't exist. It was Community Engineering.
FROKE: All right, very good.
MUNDY: And the Bellefonte system ... I forget what it was called ... Bellefonte Cable System or something, and the State College Cable Company. They weren't part of Community Engineering.
FROKE: When did you join Community Engineering?
MUNDY: Ah, Community Engineering, when did I join that ... it was in the '50s--'57 or '58. At that time they were just finishing the State College system and the Bellefonte system had been built and the antenna site was up at Point McCroy. State College was initially on somebody's ... I believe it was on Dr. Brown's house in State College and then it was moved over to the water tower on campus.
FROKE: This is just in passing but would you know where some of the early records of Community Engineering might be?
MUNDY: I had some of them in my files and Jim Palmer may still have some. He would be a good contact but we ... between Jim and me we had several of Dr. Brown's original workbooks. I reviewed those workbooks and that's where it came up and found out that he originated cable powering. We had cable powering before anybody else in the industry. We powered whole antenna sites with the coax going up the mountain. This was all pioneered by Dr. Brown. Now in Bellefonte he was lucky because they put the site up where the old beacon light was. He had power there. Then he had trouble with ice forming on the feedline. By passing power on the feedline it was able to cope with icing most of the time.
FROKE: At some point if you would like to donate some of these papers to the National Cable Television Center and Museum we would be very appreciative.
MUNDY: There's no problem there. Personally, I may have some old workbooks but Dr. Brown's workbooks, as far as I know, would be with Jim because they were still ... I never took any of those when I left there. He would be the gentleman that had that.
FROKE: The work with Centre Video and with Community Engineering Services that evolved into C-COR began on an official basis ... full-time employment, so to speak ... about 1957.
MUNDY: Latter '57, early '58.
FROKE: Prior to that you were doing incidental-type work with Community Engineering Services and you got to know them ...
MUNDY: That's right.
FROKE: So if there was a particular task that needed to be done, they would contact you because of your background.
MUNDY: That was a service of the University because as a land grant university we did that, as you well know. Still do that for industry throughout the state.
FROKE: So the University was supportive of the development of the cable industry even at that time.
MUNDY: That's correct. Ultimately, I worked with them when they developed their first CATV training program, you may recall.
FROKE: Yes. The one that started about 1968 I think it was.
MUNDY: I forget the gentleman's name that spent a whole summer with me in the field getting familiar with the cable business.
FROKE: This would have been Harry Weaverling.
MUNDY: I think you're right. He was with me when we were rebuilding the Kane, Pennsylvania site and he might have been in on some of the Clarion site when we put the closed-circuit TV in the Clarion University.
FROKE: Coincidentally, the organization at that time--1968--was called the National Cable Television Education and Training Center.
MUNDY: That's right. I remember some of the seminars I attended over there. Dr. ... was it Dr. Amerman?
MUNDY: I'll never forget the seminar that he gave on reliability and the mathematics he went through on determining the reliability of a piece of electronic equipment according to the number and type of components in it. I mean I was completely lost. I'll never forget that. I attended those early seminars.
FROKE: That training center lasted for only two to three years and then the cable industry had that terrible financial problem in the early 1970s and the National Cable Television Association had to withdraw its financial support. It's too bad that it could not have survived at that time because I think it would have been very, very useful.
MUNDY: Oh, yes. Locally, here, we have fellows that we sent through. At that time the classes were primarily held at the Altoona campus, as I remember. We sent a number of people through that course. Early on some of them unsuccessfully because they were put into courses where they didn't have the background but then that was modified to give them the background and some other work and then eventually get them into it.
FROKE: In your role with Centre Video and Community Engineering Services when you went with them on a full-time basis in 1957, were you primarily the design engineer for the systems?
MUNDY: I'd call it more a project engineer. The design work was still coming from guys like Fred Thompson. They would bring it into the lab to me and from there I'd try to come up with a product. That was my job plus I had the responsibility for their systems in the field. They had a lot of problems in those days. They were developing UHF converters, some of which were being used in translators out in the west. The first family of converters they developed went into Towanda, Pennsylvania. I'll never forget. I went up there in the wintertime to make them work--they weren't working. Another funny story. I was there about three days and had come to the conclusion that I ... on the multiplier chains in the local oscillator ... that I had to reduce the queue because it wasn't stable. So, the fellow that was the manager of the system, I called him in and I said, "I want you to go downtown, go around to the dry cleaners and I want you to get me some coat hangers that are soft--iron coat hangers." He looked at me like I was nuts. I said, "Don't ask why--get me the coat hangers." In the multiplier chain, I removed the tank coils that were in there, made them out of coat hangers to give the multiplier chain stability, put the converters in service and I guess they were there until they rebuilt the antenna site.
FROKE: On the C-COR side you carried things to the product stage.
FROKE: And on the distribution--the Centre Video side--you would supervise the installation of systems and also go out and identify major problems that were beginning to show up with the systems.
MUNDY: That's right. When I went there, shortly afterwards--like three years or so afterwards--over 50 percent of our work was R&D work for the government. So it was a combination of the two. We competed very heavily in the early days with octave bandwidth amplifiers--UHF type, IF amplifiers for spectrum analyzers and things of that nature. Eventually, that tapered off and we could support the R&D work in the cable equipment. Then I wound up in that. But it was a mixture. For instance, we put the first amplifiers and distribution system in Point Arguello, California, in the missile pads. That was an interesting project. Those were very sophisticated amplifiers and they were nothing more than an amplifier off our production line modified to suit those purposes. So there was all sorts of that type of work--very interesting.
FROKE: So Community Engineering Services was actually beginning to evolve in a manner comparable to, I guess what you would call, the parent organization, HRB-Singer. In other words, working heavily with government contracts ...
MUNDY: And that's where the conflict of interest began. That was where the original confrontation of conflict of interest came about. And that's what generated it.
FROKE: The question whether it would go on and become a generic electronics research and development firm or whether it would concentrate on the cable television industry needs.
MUNDY: It was a big question. Of course, they went through the same sort of situation all over again when the fellows from HRB sprung off and formed ... oh, Thompson's company ...
FROKE: The Locus.
MUNDY: LOCUS. Remember that? That was the same type of scenario. The only difference there was HRB had cut back on a lot of their work that they were doing in those fields. This group of fellows who were primarily the receiver group spun off and formed LOCUS and that was a big problem. The unfortunate thing was they weren't able to side step the litigation and so on whereas Community Engineering knocked it off quick enough that they weren't exposed to that and avoided it.
FROKE: Mr. Palmer became president of C-COR and Centre Video about that time period, am I right?
MUNDY: Well, as the company names changed and evolved into the ultimate, he was always really president. Fisher was in there ... what was the gentleman from Kane, Pennsylvania, that was your controller at the University?
FROKE: McKay Dobkin. John Christopher.
MUNDY: Christopher. Christopher was there, Fisher was there, and Palmer was there. Those were the three principal guys. All of whom are investors.
FROKE: On both the C-COR and the Centre Video side.
MUNDY: Oh, yes. They followed that through. They came from the original situation. All they did is evolve with it as it went through the chain. And they were good people to work with. Now there was another investor and he was a retired professor at the University. I forget his name now. I'll never forget, I took a ride with him to Hershey one time in his car. Boy, what a wild man. He was a big shareholder in C-COR. We went to a state convention at Hershey. What the heck was his name. I'll have to ... I apologize for that ... a heck of a nice gentleman. But when he got behind the wheel of a car, boy it was seventy miles an hour. I'll never forget. We went over Seven Mountains on the way to Hershey and it was a foggy morning.
FROKE: I was going to say Ray Carpenter but I don't think ... He was on the program side of the University to a greater extent.
MUNDY: And the fellow that started Chemcut was an investor with us and quite active. Maybe I'll think of this chap's name. He was just a great guy.
FROKE: At what point did Centre Video decide to become expansive and move beyond Bellefonte and State College?
MUNDY: Well, at the same time ... that decision was made when the then board of directors decided to spin off Centre Video which at that time was owned by C-COR. It was spun off for the purpose of developing. That's when Bob Tudek was brought in.
FROKE: So just as there was a conflict on the C-COR side, the manufacturing and research development side, as to what direction they were going to go.
MUNDY: That conflict was behind us.
FROKE: Now you were at the point where distribution was beginning to cause problems with the C-COR side.
MUNDY: Well, the problem there was they weren't all common. The investors hadn't necessarily come in through the same door. Even though the entities were owned by C-COR, some of them were basically orientated as cable investors, some of them were orientated as manufacturing investors. And there became a conflict there in that the old attitude was that the cable systems were subsidizing the manufacturing. So it was decided to break that up. Plus, it was felt by the board that both companies would develop much better independently. And that's what, in fact, happened. That's when we went out on the franchise trail. At the time that they spun things off the Towanda system was in existence. They had a franchise ... I believe Kane was in existence. They had the Clarion franchise, but that was it ... possibly Follansbee, West Virginia ... I don't remember. You know Tudek was here when we built that ... Follansbee-Mingo Junction. But anyway, that's what brought it about. I wound up when they spun if off being a shareholder in both companies. As a result and sticking around and helping develop the whole thing is where I finally came up with the wherewithal and cash to originally form with Bob ...
FROKE: The Tele-Media Corporation.
MUNDY: That's right.
FROKE: When the two were split--C-COR and Centre Video--did you choose to go with Centre Video?
MUNDY: Most certainly. I requested it.
FROKE: You wanted to go on that side.
MUNDY: By that time, at my suggestion, they had hired George Dixon who had come on board and took over the engineering responsibility for C-COR and I requested to come to Centre Video. Well, they weren't going to do it but they finally granted that permission but they split my time fifty/fifty between C-COR and Centre Video because I still had the antenna site work that C-COR was involved with. Eventually they took that all over when Tom Kenly came from HRB-Singer to C-COR. He took over the antenna site effort and also the sales effort. Then I devoted full time to Centre Video Corporation.
FROKE: What year was it that Bob Tudek came with Centre Video?
MUNDY: It had to be ... we left there in '70. Bob came there in '64 or '65 because he and I worked together for about six years developing the franchises around the Pittsburgh area. I time it in that he says he flew with me for six years before we formed Tele-Media.
FROKE: That was a very, very rapid period of expansion for Centre Video.
MUNDY: Oh, yes.
FROKE: I believe the figure that I read some place was forty-nine separate franchises were granted to Centre Video.
MUNDY: Actually there was more than that. Is it forty-nine out of fifty-one that we were successful in getting? I believe that's the case with Centre Video but then those numbers are further carried in our history which includes the franchise efforts we went through in Tele-Media to rate our success in getting franchises.
FROKE: What would be the typical pattern of activity when you identify a community? I'm talking now about the time period when you were with Centre Video and you were expanding with Centre Video. What would be the particular pattern of activities once a community had been identified as being a market that you would like to move into?
MUNDY: Of course, the first thing we have to do after contacting the powers to be--mayor, council, whomever--if the community was thinking about cable or hadn't, perhaps, and we wanted to convince them, then we would go into a training program. First of all get to know them but then we'd go into literally a training program.
FROKE: To familiarize them with ...
MUNDY: As cable. The way we would do that in many cases, particularly in football season--now comes Penn State again--we would bring the council and whomever they wanted to bring with them up here for a weekend. We'd usually get them in here on a Friday night. That would be an orientation program and dinner Friday evening. Saturday morning we'd start out early. We'd take them to the offices of Centre Video and C-COR here at Dale Summit. There would be people in from C-COR to give them a tour of the manufacturing facility and explain that. Then we would take them into Centre Video's offices and we would show them how we operate a cable company, how we keep our records--the whole setup. Then on Saturday afternoon they'd go to the football game. Those that wanted to go to the football game would go to the football game. The other ones who wanted to shop or whatever, we'd split up and take care of the whole group. Get them from the football game. There'd be another dinner, and then a brief period again of orientation Saturday evening. Sunday morning everybody would get up and we'd get the people to church that wanted to go to church and then they'd leave for home. Many of the groups came up by bus. Some of them travelled individually but most of them came up by bus from there to here. Some of them I flew in in smaller groups. That was the procedure we used and it was very successful. Of course, they'd always get the tour of Penn State. Many times there were tours arranged with your radio facilities and so on over there. So it was all intermingled.
FROKE: Then you would go out and do a site survey to determine what the costs would be for putting in a trunkline and ...
MUNDY: A search of the demographics first as to whether the market was a good market and then we'd go into the technical side and survey the area for the system, for the antenna sites, and the whole bit and put it all together.
FROKE: You'd look at the demand for cable in a particular community?
MUNDY: Early on, yes. That had to do with the quality of the reception in the area. Believe it or not, everybody thought areas like Pittsburgh were poor cable areas. That wasn't so. There was a high percentage of the people around those areas whose pictures were all ghosty from reflections. Cable was a great blessing to Allegheny County, no question.
FROKE: The assumption was that the Pittsburgh metropolitan area had a substantial number of broadcast channels and consequently they were getting enough television.
MUNDY: That's correct.
FROKE: But it was the reception problem that really made this a market for cable.
MUNDY: It was the reception problem that changed them. That's right. You had your basic networks there and I think you had ... Early on you didn't even have an educational channel ...
FROKE: No. WQED, I think, came on about 1956. Would you like to take a break, Ev, for five or ten minutes.
MUNDY: Well, that might be good.
FROKE: Get a little bit of rest here. I could use a rest.
MUNDY: All right. Fine with me.
FROKE: We were talking about some of the things that you would look for in choosing a community to pursue a franchise and then go on and build. You touched on whether the market for cable was there. In addition to that was the climate of the government apparatus, the council or the city manager. From a technical point of view, an engineering point of view, did terrain and cost of building a system in a particular community play a part?
MUNDY: It certainly did but I want to add one other criteria that Bob Tudek and I personally always had. As we were looking at these areas, one of the early-on things that we considered, and particularly after we were in our business, would we live in the community. And if we would live in the community, our interest went way up.
Now to get back to the technical side. There are many things that affect the cost of building a system.
FROKE: I'd like to go back to what you just got through saying. What were some of the things that made you say, "Yes, I would like to live in this community," or "No, I would not like to live in this community."
MUNDY: Is it a clean community? Do the people seem friendly? Do they have a good school system in the community? Is it just the kind of a place that you would be willing to move into and live--make a living.
FROKE: If you had a gut reaction that, yes, this is a pretty good town, that would carry over into a business-type relationship.
MUNDY: That's right.
FROKE: You would anticipate that you would not have problems that really were not problems inherent in the business itself but were problems coming in because something was wrong with the town itself.
MUNDY: That's right. That was a very important part of the selection--at least by Bob and me. But then on the technical side, there are many things that vary from community to community that have an impact on the cost of building a system. I guess the first and probably most important is the general condition of the utilities plant where you are going to put your cables. And if, for instance, you have a predominant amount of underground construction, it puts the price way up. Now early on that wasn't too significant. The alleys behind the main streets were where the utilities were and we you could still get on the poles. In those days the utilities weren't too friendly either. They still aren't. They loved to see us come to town if they thought we had enough money to upgrade their plant if they had been wanting to do that.
FROKE: There's a whole legal literature in pole attachments, right?
MUNDY: That's right. Pennsylvania, again, kind of led the industry in that whole battle. Barco from Meadville ... he and his daughter, as attorneys through our state association fought this whole pole contract concept and our position on those poles. So again that was a first for Pennsylvania. He was quite a gentleman, by the way. So that was always a big consideration. We went on from there as to the availability of signals ... The type of distribution equipment more or less was a common situation but the antenna sites was where the unique things came in as to how we would get the signals to make up a package we felt would be marketable.
FROKE: You wanted to make sure that you'd be able to get reception that would dramatically improve the quality of the picture.
MUNDY: That's correct. It had to be good. You didn't dare have great contrast across the channels in quality. That was one of the big problems that Canada had early on when they developed Topo scatter techniques. There was the local station, and there was usually at least one local station in the area, and then they put in Topo scatter equipment for reception. Then they couldn't sell the product because signals received using Topo scatter techniques were generally substandard in picture quality to the local station. So we had to watch here and in our development in the United States that we didn't put ourselves in the same type of problem.
FROKE: What were the circumstances that lead you and Bob Tudek to decide that you were going to go off on your own? There was the personal relationship that bonded you very, very quickly. In reading some of the things that I have about your work together, you immediately seemed to strike it off together on a friendship basis.
MUNDY: Yes. I thought a great deal of Bob. We were fishermen. He was a golfer, of course. In those days he and his family ... his wife, she'd catch fish when we couldn't touch them. But that's another story. I told Bob when we were coming pretty much to the conclusion on the development of the franchises we had around the Pittsburgh area, that I had some major projects that I had worked on such as non-duplication for the whole area, and some microwave projects. I went to him about a year before I figured these projects would all be finished and I said, "I'm going to leave. I don't have any plans. I don't know where I'm going. But when I get these projects completed that's going to be it. I'm warning you that you better start looking at selecting somebody to take this job over. We have to start grooming him one of these days."
So that was approximately a year. Oh, it was only a few months after that he asked me, "What are your plans?" I said, "I don't have any yet." I said, "There's all kinds of opportunity out there. Hell, I don't know what I'm going to do." So one day he came to me and he said, "Would you like to have a partner?" I thought a little bit and before I could even respond he said, "I'd consider going with you." At that time he was probably in the frame of mind to leave, also. This was leading up to the merger with TCI. In Centre Video we had come to the point where we had franchises that had to be developed. There were bonds on the development of those franchises and it was difficult for Centre Video to come up with the financing to do all these. That's what triggered either the sale or the merger of Centre Video with some larger organization. Our first big opportunity was with CBS, I believe, out on the west coast. They were in here and were ready to go. They were ready to do it. In fact, I had the fellows from CBS with me in the airplane over Pittsburgh with the low frequency radio turned on listening to the radio because that day the FCC was to make the decision on whether or not newspapers and radio people had to divest of their cable connections that were common to their other operation. Sure enough it came over the radio. I was showing them the area around Pittsburgh from the air. It came over the radio that, in fact, they would have to do that. That killed that deal. So I very calmly took them back to the airport and they went back to the west coast. But Bob was in the airplane with me and there was two or three fellows from CBS in the airplane. That's when we continued to try to put together this financial package, whatever it was, to accomplish these commitments. That's when TCI came along and ultimately it wound up with a tax-free exchange of stock to buy the company. Little did we know it but at the time that took place we were stronger than TCI. We didn't know that. But that's a fact. It's been shown that that was a fact since then as we look back into the history.
FROKE: The perceptions of the financial people, however, probably were different.
MUNDY: That's absolutely right.
FROKE: They perceived TCI as ...
MUNDY: I tell them to this day when I happen to be with John Malone, I tell them, "Look, baby, Tudek and MUNDY: made you." And he just has a little laugh. In fact, he wasn't with TCI at that time. He was still president of General Instrument Corporation. So, when we got that put together then we tended our resignation and formed Tele-Media Corporation. That's how it came about.
FROKE: Did you feel some kind of a personal obligation toward Centre Video to delay your departure.
MUNDY: Certainly. Even though I'd worked awfully hard, we have to face it. Centre Video and C-COR were the steppingstone for me to do whatever I wanted to do. Palmer and his board gave me the original opportunity to get the financial wherewithal to do what I wanted to do.
End of Tape 1, Side B
FROKE: Those characteristics that we've read about you played a part in your decision to stay on for one year with Centre Video. At the same time you had a financial obligation also that you wanted to carry through with.
MUNDY: Oh, yes. I figured that Bob ... Well, I owed it to Bob, I owed it to Palmer and to the board to make sure that they didn't get messed up in that situation. Continuity was a very important thing. A year prior to that I took on Bill Glass' son as an assistant and I had him bringing all the engineering files up to date and getting that filing system complete and I had all these things to do before I left. So, we worked it that way.
FROKE: Did you and Bob have a general idea of how you were going to put together your new company when you left?
MUNDY: None whatsoever. We just wanted to go do our own thing. We had no hangovers from Centre Video or any intent to take over any of the things that we had developed for them that were yet to be ... I should say franchises that we had gotten that were yet to be built.
FROKE: You left all of that behind you.
MUNDY: Yes. We didn't even go see those people.
FROKE: At what point did you say to yourself you wanted to stay in the cable business?
MUNDY: Well, Bob was torn between the cable business and the security business. He had some contacts in Philadelphia that were very good in the security business who wanted him to come with them. I was aware of that but he, on his own, made up his mind that he wanted to stay in the cable business. Of course, I wanted to stay basically in the cable business or I would have gone back to heavy industry. I always liked heavy industry. But I figured that I could get a job in the cable industry with a phone call so why shouldn't I stay in the cable industry. That was my decision. But I would have changed had I not been fortunate in the cable business. It wouldn't have bothered me.
FROKE: How did you decide that you would continue to live in the State College/Bellefonte area? That was about the time that different metropolitan areas were beginning to assert themselves for certain roles within the cable industry.
MUNDY: But the metropolitan areas were not within our means to develop.
MUNDY: And, in any event, with the concept we had of the smaller or medium size systems ...
FROKE: Those were the markets you were going to be going after.
MUNDY: We targeted those markets. Basically classic markets. But we'd have to travel regardless of where we lived so why uproot our family from this area and take them somewhere else only to leave them sit there while we were out developing a company. So it was no question--this was the place to be.
FROKE: And your early franchise work with Pennsylvania, Ohio, West Virginia ...
MUNDY: No, that's all right. She'll get it. In the early days we didn't know too much about areas other than Pennsylvania because with having been with Centre Video ...
FROKE: You knew the state inside and out.
MUNDY: But we didn't realize how many opportunities were out there. We got in the airplane. We met over at the University Park Airport. We had leased an airplane from Stocker--a twin Comanche. I believe Stocker and Claster owned it. I'm leaning on the wing with it outside the hanger when Bob arrived the first morning and that's the first time we discussed where we were going. This is true. He said, "You know, I believe we ought to go talk to some of the fellows that we've known for years. We had set up Tele-Media Corporation so we could operate at least a year without income. That was the agreement with our investors and that's where the money was set aside for doing. So we started off by flying around to see the people we knew. We went up into New York State and saw Jim Coffey and we went around to other places. We went down to the West Virginia convention and so on. We just went around to see people.
FROKE: Was Jim related to Lyle Coffey?
MUNDY: Jim Coffey had been out of Lewistown with George Gardner for years.
FROKE: No, different family.
MUNDY: And he had worked with George Gardner for years. In fact, I met Jim Coffey when he was with Vikoa.. He and another gentleman out of Lewistown ...
FROKE: The Baum group ... Dr. Arthur Baum.
MUNDY: Yes. There was a gentleman, an older gentleman from Lewistown, that worked with him on the franchise trail for Vikoa at that time. I met him when he was with Gardner and then he left and went with Vikoa and I met him many times in the field in his efforts with Vikoa.
FROKE: He suggested nothing in New York right now?
MUNDY: No. As a matter of fact ... I'm trying to think of the name of the community--the home of the big antenna company. There's a town in Ohio by the same name and I'll have to recall that somehow. But anyhow, he took us over, introduced us to the mayor, we had our talk, and they would like a proposal for a franchise. So we called back here and sent them a telegram saying that we would be interested in submitting a proposal to them. Dick Webster was in charge of the Western Union office in Bellefonte and he made a mistake and sent the telegram to the town in Ohio. Ultimately we got that straightened out but we got offers for proposals for both of them. I can't think of the name of the town now. That's terrible. The home of Channel Master is the town up in New York and once we break that down we'll know where it was.
FROKE: Your first franchise was an Ohio community wasn't it?
MUNDY: That's correct. Our first system we bought was a leaseback in Columbiana, Ohio. That was the second leaseback sold in the country. Columbiana is about twenty miles across into Ohio. When we hit the franchise trail in Ohio, we got East Palestine which is contiguous--right next door--and Leetonia and then we went up along Lake Erie and got Geneva, Geneva-on-the-Lake, Geneva Township, and so forth. In the meantime we were pushing to buy Ashtabula and Conneaut, Ohio. Ashtabula was a leaseback plan and Conneaut was owned by the Aiello brothers out of Ridgeway. So then we began to build the franchises after we got them as well as we ultimately were able to buy Ashtabula and Conneaut. But those were the early efforts. In the meantime before we completed that, we went down to the southern part of Ohio and we ... I'll have to think of that name in a minute, too. Anyway, we bought systems down there which were really the second systems we bought. We can look at that history there--it would give it to you. There were two systems down there.
FROKE: This would be about 1973? East Palestine ... New Waterford ... Geneva ... Madison ... Ashtabula ... Geneva ... Celina?
MUNDY: No, that's later. It was before.
FROKE: I'd better give it to you and then you can find it.
MUNDY: Okay. But, anyway, we were fortunate in that endeavor and we got ... I bet they might have even overlooked that in this history from the looks of things here. We won't waste much time on it ... Oh, Jackson, Wellston, and Coalton which is right down close to the tri-state border there next to ... where Marshall College is down there. But we bought those systems and expanded them.
FROKE: What Ev is looking at is a segment from what he and Bob Tudek refer to as their blue books. They have prepared a remarkable history of Tele-Media and we'd already asked Ev if we could include this in the oral history itself and in this way we can eliminate the need to go into some of the detail about some of these acquisitions that we're now touching.
One of the factors that is emphasized in the history is the substantial growth in the number of subscribers that took place in the early months of your purchase or your operation of a particular franchise. Is that something that you also looked at when you went into a community. The penetration of ...
MUNDY: Oh, yes. You must have the capability to leverage the system so to speak--expand it. This is the only way that you can finance the thing and ... The real story is you can't afford to pay taxes and financing at the same time. If you don't have the expansion, you immediately wind up into a tax problem. Because of your income you're not reinvesting it. You don't have an avenue to reinvest. So we have to be able to expand.
FROKE: So you're looking for a penetration maybe of 30 or 40 percent and the possibility that you can go in and very, very quickly move it up ten or fifteen points.
MUNDY: That's right. Now in the early on, Columbiana, Ohio, had just slightly ... just around 200 subscribers on the leaseback plan. We took it up to 1,200 in about three months. That's the sort of thing that we were able to accomplish.
FROKE: What explains your ability to do that kind of thing and other people are less successful?
MUNDY: Tudek has a background in promotional-type work. He was with Blue Cross-Blue Shield ... he was with Muscular Dystrophy. He brings that basic expertise to this partnership and then he got ... Bob Shepard ultimately came on board with us. Between the two of them they developed the sales program we still use which is primarily a door-to-door effort. We also have a telemarketing arm. But we didn't have that for years. It was door-to-door and Bob and Bob Shepard developed this. Tudek brings that expertise. It was up to me to supply the physical plant to keep pace ...
FROKE: To be sure you've got a product.
MUNDY: That's right. To keep pace with their projections as to their sales and what they wanted to do. That's where I came in. They never told me what or how, they just said have the plant there when we need it. That's how it went. And still it's pretty much that although I'm not in that side of it anymore particularly. That was the way the team worked. In fact, Bob Shepard was the first one that came with us from the TCI group. We had had him in State College and he lived in State College and then he moved to Pittsburgh and was in the sales effort for TCI. He's the first one that came with us and we put him up in Ashtabula, Ohio, as VP and general manager but his real job was to develop that whole plant along there from the sales point of view. He never missed a quota. If he couldn't make his quota in what we built he'd over bill the mileage and wouldn't say anything. We'd finally find out about it and then we'd have to figure out how to pay for it. But that's the kind of a guy he is. He helped make us successful in a major way.
FROKE: We are tape recording this oral history in Ev's office and on one wall is a bookcase that includes lots of legal-looking publications. I would imagine each of those is a franchise.
MUNDY: Each of these is either a franchise that we developed or a purchase and the ultimate company we developed. Each one represents a financial transaction either from scratch or a refinancing or a reorganization or what have you. It's a chronological file basically for my estate but we also use it everyday in things that come up.
FROKE: So it's a total record of the evolution and the growth and development of Tele-Media.
MUNDY: That's right. Sales basically are not in there ... where we sold systems ... because it doesn't require keeping track of all that legal work. These are all purchases or financings that we went through.
FROKE: The 1970s, when you left Centre Video, were initially very, very difficult I would imagine because the stock market on cable was way down. TCI was selling for about one, if I remember correctly.
MUNDY: I got as much as over thirty bucks for their stock after the merger took place. That's when we quit leasing an airplane and I bought the first airplane personally and then leased it back to the company. I'll never forget one occasion. My son-in-law Frank Vicente was with me and he was still going to Penn State and we were over at University Park in a hanger. Toftrees had decided to get a new airplane. They had a nice twin in the hanger the same one I was in and they came in and wanted to sell me that airplane. Well, I kind of liked to have had it and I had the stock to just go ahead and buy the airplane. Well, that was just a short time before the market went zip ...
FROKE: So you and Bob got out while it was still up.
MUNDY: We never got out. We kept a lot of their stock but we cashed in enough of the stock to form Tele-Media Corporation. To make our obligation in the initial group of investors which were all Pittsburghers. We called them the "Sewickley Five." They were all from Sewickley, Pennsylvania ... multi-millionaires.
FROKE: How would you identify them in terms of interest in cable?
MUNDY: They were brought to us primarily by Rose, Schmidt and Dixon. Evans Rose, who was active up in this area with Penn State and with one of the governors. He was campaign manager and that sort of stuff. But politically they were our law firm at that time and they brought these fellows to us.
FROKE: And you sold them on the potential in cable?
MUNDY: That's correct. And they were all clients of Evans Rose.
FROKE: What were their backgrounds?
MUNDY: Oh, they were from the metals industry; they were from the coal mining industry; they were from real estate. Grant McCargo was one of the biggest real estate people in the Pittsburgh area. John Oliver of the Oliver family in Pittsburgh that owns the buildings--he was the biggest single shareholder in Kodak at the time. This was the type of people we had.
FROKE: Now, Tele-Media is privately owned. You and Bob then have the financial interest in Tele-Media. Did you have some kind of a bond arrangement with the "Sewickley Five" or ...
MUNDY: We didn't have any terminating point.
FROKE: You had a loan from them for a certain period of time?
MUNDY: They had equity in Tele-Media Corporation proportionate to their investment. It was not a lot.
FROKE: So over a period of time you bought ...
MUNDY: We bought them back. The biggest part that we bought back was when we reorganized the Lake Erie company. We did the financing to buy them out at that time. It was not a loan--they had equity in Tele-Media.
FROKE: Now then, 1970-1971 were not good times financially for the cable industry but these were the times when you were going out there. Because you had this financing and because you were operating at a relatively ... I guess I would call it inexpensive capital investment approach to building, going into the smaller communities and so on ... you were able to thrive, really.
MUNDY: We financed the first system we bought 100 percent. One hundred percent ... not a buck down--Columbiana, Ohio--Equibank in Pittsburgh.
FROKE: So you were not moaning and groaning, so to speak, about what was going on in the cable industry. You were simply building a step at a time for the future.
MUNDY: Actually when times were tough we did better because we had some connections to get financing that allowed us to go in and take advantage of some real bargains. So we always did better when times were tough. We were a size where we weren't over burdened with debt. We knew how to come by these properties and so it was good ...it wasn't bad times for us. We didn't have any problems. We used to make up the cash flows and stuff between the two of us. It was many a night we spent in a hotel in Pittsburgh or in the William Penn doing cash flows, he doing one part and I doing another part and going to the bank the next morning to get a loan to do something. That wasn't uncommon. Those were the greatest days of this whole situation for me. If that cash flow didn't fly, we'd go back and make up another one the next day and back in the next. And that's the way we did it.
FROKE: You moved from one state to another during that 1970s time period. What was the receptivity of government to your various ventures. Did you encounter any hurdles during the 1970s that were unusual?
MUNDY: Well, we encountered some political people that were rather cantankerous, so to speak.
FROKE: These were personalities?
MUNDY: That's personality problems. But as far as the communities and our ultimate subscribers, for the most part they were kind to us. They wanted the service. We gave it our best shot to give them what they wanted and they appreciated that. They were very faithful but their elected officials weren't necessarily in that light. Unfortunately it seems in politics, and I shouldn't say this, but it seems in politics that you have somebody involved in the council or some other facet of corporate government of a community and they'd never had any notoriety in all their life and suddenly they're elected to this office and now they're looking for notoriety. They seem to have a passion for pursuing that. But we could always cope with them. Sometimes it wasn't too pleasant but in the end ...
One thing, we were always honest. We told it like it was. If we made a promise, we tried to fulfill it. We never did any deals under the table. Now there was a lot of that crap going on. We ran up against a lot of it but in being honest we prevailed in the end when those things were actually taking place in the franchise battles.
FROKE: The 1970s were also the years in which some of the promise of cable television were being written about. The Wired Nation which lead, I think, to probably some of the big mistakes of the cable industry ...
MUNDY: Blue skies.
FROKE: Blue skies type of stuff. Did you and Bob deliberately make a decision to shy away from that kind of a thing? You didn't seem to get caught up in it.
MUNDY: We didn't purport to do something that we weren't sure we could do. We would allude to the possibility at some time--these other things being available--but we didn't tell them that we were going to bring them to them because they weren't available at that time. We told them point blank what we were capable of doing, what we would do. We even had their format laid out for the system--the whole bit--in our presentation and that was it. We mentioned the fact that as technology progressed and the market was there for these things, that it would be a natural evolution, that if we were still there we would provide them if they were available but they weren't available now and we didn't say they were available.
FROKE: That contributed to the sense of integrity of your operation as well.
MUNDY: Right, and with the financial people gradually ... it enhanced our position with them because they knew we weren't going out and presenting a program that couldn't fly.
FROKE: Three years ago I had the privilege of being invited to your celebration at the Atherton Hilton Hotel and you had many financial interests from all over the country.
MUNDY: That was when I was so emotional that night I couldn't even talk when I looked over that room.
FROKE: The testimonials that were coming from these major metropolitan bankers from all over the country.
MUNDY: Many of the bankers that were in that room that night actually attained their position in the bank as a result of loans that they helped put together and financings they helped put together with Tele-Media.
FROKE: It looked good for them.
MUNDY: And they were literally promoted. Some of them had been promoted when they were present at our closing; a phone call would come in that you are now so and so. That happened at different times.
FROKE: What would explain going from one financial company to another--simply the availability of dollars?
MUNDY: The availability of the dollars ...
FROKE: Because there were so many of them that ...
MUNDY: Well, the point is that it doesn't take you long in a major effort to hit the lending limit of a bank. So that's one problem. The other thing is that bankers kind of hold hands and personnel change and many times you followed the personnel because a bank would decide that they're going to get into cable and they take ... personnel would leave this bank and go over there. Now they have a whole new situation and we would follow them there.
FROKE: And undoubtedly there's a sense of competition also that once they know that you're out looking for a purchase in an area why they would be coming to you.
MUNDY: But we developed a relationship with some of the people in the financial world that we were faithful to them. They helped us. Now they're in a situation where they're the new boy on the block and they have an opportunity to do something. They come to us and say what are you fellows going to be doing and is there some place for us and so forth. If we had a place for them, they had it. And that's the way it works.
FROKE: The 1970s were also the time period when cable began to put much, much greater emphasis on original programming. Prior to, say 1970, most people perceived cable television as delivering broadcast signals in a viewable manner.
MUNDY: We had the old weather scan and things like that.
FROKE: That's right. But come the middle of 1975 and the satellites and so on, all of a sudden cable programming began to change. What were the challenges of that time period for you and Bob?
MUNDY: Well, of course, satellites weren't quite in yet. But cable programming started to come along and the biggest challenge to our whole industry was to utilize the program sources to the extent that they could exist because their revenues were solely from cable. This was the problem and that's where a lot of the failures came early on. It wasn't the fact that they wouldn't ultimately have been good program sources, they just didn't have the financing. We, as cable operators, could only finance so much. We had to stay within the framework that the market would bear. That was the battle. One of the guys that helped most idea-wise and investment-wise and so forth in this whole scenario was Dr. Malone. I can remember having lunch with him at different times and he was always saying we have to get programming into this industry if we're to be successful. He was one of the guys that pushed that from day one.
FROKE: HBO, I believe, came on with their satellite service, pay service, in 1975 and they were ...
MUNDY: I don't remember when they had satellite. The pay service, at first, came in with terrestrial microwave. New York Penn in this area. Remember we had to feed in New York stations. Ultimately they brought us Home Box Office. So, terrestrial microwave and then from there into the satellite program. The satellite program made our industry.
FROKE: Now then, you had to rebuild sometime during the '70s in order to accommodate the larger number of channels. Did that pose a financial problem for you.
MUNDY: Well, it was bound to but ...
FROKE: How did you handle the demand for it?
MUNDY: If we really stop and think about it, there weren't that many available. HBO was about it. There were different things tried. The financial network and stuff like that but ... they did that teletype initially.
FROKE: GridTronics was trying to fool around with what eventually developed into The Movie Channel.
MUNDY: That's right. But these people weren't on line. HBO was the first one we had to accommodate so we literally dropped some duplication we had on network television, opened the channel up, and put them on.
FROKE: So you were up to twelve channels at that time and you were ...
MUNDY: That's right and we were at twelve channels for a long time because we didn't even have ... early on we didn't have the equipment to go beyond that that was really proven. Even the first two-way equipment was twelve channel equipment and that was developed in Canada. The cross-over filters, as I recall, were developed by Cascade. They made the first cross-over filters but it was still twelve channel equipment and we actually used that in the early stages just to send information of origination type from the office to the antenna site and put it on the cable system.
FROKE: The 1980s were the time period where you ...
MUNDY: That was the blooming, when things started to ...
FROKE: And that's when you had to really face the cost of rebuild.
MUNDY: But we were in business from '70 so in our plants for the most part we had anywhere from five to eight years already in them. Many of the plants were financed with an amortization of ten years with a balloon at eight so we actually paid the system off at the end of eight years.
FROKE: And you were ready to borrow again.
MUNDY: That's correct.
FROKE: Timing plays a great deal of difference here, doesn't it?
MUNDY: And this was Tudek's expertise. The same way when he anticipated that the interest rates were going to go wild, he said we've got to do something about this. He finally came up with a plan to cap the interest when we went in to borrow the money to begin with. Well the bankers weren't thinking interest was going to go wild and they capped it for us with the idea that surplus went to the end and the loan was paid off at that time. Well that saved our butt. That whole Lake Erie complex was capped at 15 percent when interest was running 19 and 20 percent. That's what kept us out of bankruptcy because we could never, never have existed paying 20 percent interest. That's right off the top. So those are some of the things that were interesting. And that's where Tudek's expertise in this partnership came out. These were his ideas.
FROKE: It was in the 1980's that you and Bob decided to say take Tele-Media One and start all over again. What were some of the factors that lead to that decision?
MUNDY: Well, we were still reasonably--what do you say--middle-aged. We weren't ready to do any retiring and we had a lot of good people with us. We felt an obligation to those people, too. So we decided to go on and after we were at that turn around period for about a year we came out with what we called the five-year plan. And that plan was ... and we presented this to the people that were still with us ... at the end of five years we'll see where we are and then we'll make a decision what the next step is. If it's the right thing to get out of business, we'll sell. If we want to reorganize and go into a long-term situation that's what we'll do. And that's where the fifty-year plan came out--to perpetuate the company at the end of that five years. So here we are.
FROKE: In 1984 you sold out to TCI.
MUNDY: I think that was the date, yes. We didn't sell completely. We kept about 50,000 subscribers as I remember. It's a matter of record in that history. That gave us a bed income that helped support the group of people that we kept on board in the interim and reassigned.
FROKE: But there must have been some overriding reason why you wanted to say get out, so to speak, in 1984 and start all over again.
MUNDY: They were all sound business reasons.
FROKE: They were business reasons.
MUNDY: That's right. Period. In any company there comes a time ... we'll call this a reorganization. This had to do with debt. It had to do with the condition of the marketplace at the time. All of those factors came in and it was the right thing to do. Now we went to TCI and we never intended selling all the subscribers we had. We only wanted to sell them 50,000 subscribers. That was a debt-deduction effort. After we started negotiating with them, they came up with the idea why don't you sell it all to us because the systems in many cases were contiguous to plants they already had and it was an ideal situation for them. Stuart Blair, who was formerly a vice president in Chase Manhattan, at that time had gone to TCI and he's the guy that kind of brought this together. He was deeply involved in this.
FROKE: Tele-Media could have continued but ...
MUNDY: We could have continued but it ...
FROKE: From a business point of view ... from a financial point of view?
MUNDY: A business point of view at that time and what the near future looked like, we came to the conclusion that we had better reduce some of this debt so we can press on with no problem. We never wanted to be strained or up against ... having our people scrambling to meet debts, so to speak. So that was how that all came about.
FROKE: In the hindsight you feel that was the right decision?
MUNDY: I have no doubt, I have no doubt. It all worked out fine and here we are. I guess that's all I can say.
FROKE: And in 1984 you and Bob and all of the people that you held together began to rebuild from ...
MUNDY: That's right. Now you must understand one unique thing about Tele-Media. Our key people all have equity in this company and there were a number of them at that closing with TCI that ... we made several of them millionaires because of the equity they had. Part of which they earned while they were with us. Some of them had put in equity coming in. So they played a big part in the decision to do this after we presented it to them. We had sold them on the idea. We weren't obligated to but we did. And to this day when we go into major changes our management team has considerable equity in Tele-Media Corporation.
FROKE: In addition to that you kept on all of the people from your old Tele-Media, so to speak.
MUNDY: We've only ever lost one key person. The rest of them have been there in that management group with us since they came on. Now in the last five years or so we've taken on some new young blood. We've enhanced our accounting department and we've enhanced the legal department. We now have in-house legal. Allegretti was the first attorney that came with us from Buchanan, Ingersoll but he's primarily now engaged in the financial side. Allan Jacobson from State College is on board and has just been promoted to corporate attorney and he's in the process of hiring an assistant attorney to work with him. These things have all been done to make our internal working closer and more expeditious and to reduce outside overhead.
FROKE: With the accumulation of equity of staff on the first sale, and the fact that you kept everybody on in order to go into the second generation of Tele-Media, and some of the corporate decisions that you have made related to assuring the future the company by giving amenities to many of your staff, Tele-Media, then, in the industry has established itself as having a very, very ... well the word I'll use is not appropriate but it gets to the heart of it ... paternalistic attitude towards its employees. Is that something that you and Bob deliberately set out to do to make your company so receptive to caring?
MUNDY: We'll go back to TMC--our logo--Tudek, MUNDY: and Coworkers. That's been from day one. We've carried that concept through from day one because both of us, Tudek and MUNDY:, felt that in past times in our life we had been treated unfairly with organizations that we had been with for one reason or another and in our company we didn't want that to occur. We recognized how important these people were if they stayed with us. We couldn't make the company by ourselves. These people will help us make the company if we give them the opportunity. So that's been from day one.
FROKE: So Tele-Media Corporation really has another name--Tudek, MUNDY: and Coworkers.
MUNDY: That's right. And "C" is for coworkers. Always has been from day one.
FROKE: That's a very, very nice management plan.
MUNDY: Well, it's paid off for us. Some people look at us and some of the things we do, the promotional programs or incentive programs we've put on, the number of couples we've sent to Hawaii on trips they've won, and all this kind of stuff ... some of the bankers kind of look at us and wonder about that. But every buck we've spent in our people has been returned to us many fold.
FROKE: On that good note I'm going to pause for this first taping session and I'll come and see you tomorrow morning at nine o'clock.
MUNDY: Okay, fine. I'm not going to ask what I'm even supposed to talk about.
End of Tape 2, Side A
Tape 2, Side B was not used
FROKE: We are continuing with the oral history of Ev Mundy being taken in his offices at Pleasant Gap, Pennsylvania, just outside of State College. The date is the 27th of November and we're picking up the second of the sessions that we are having with Ev, trying to keep each one of them around two and a half to three hours so one doesn't get too tired.
Ev, thank you again for giving me some of your time to work on the oral history.
MUNDY: Most certainly.
FROKE: We have been talking for the most part in a chronological way although we keep moving back and forth on some topics from time to time. So let's continue that same process. Although we've not adequately explored everything prior to 1984, I'm going to ask some questions this morning that would continue a little bit of the chronology from that date.
Nineteen eighty-four was the date that you sold your first Tele-Media organization so to speak to TCI.
MUNDY: That's true. That was the major sale. We had made, of course, the Florida Keys sale to TCI prior to that but that was basically Tele-Media's major sale and it was to TCI.
FROKE: What prompted TCI to get into the cable business down in Key West, Florida? Did your fishing interests draw you there and through that circumstance you became aware of the availability of the Key West system or are you a Hemingway fan?
MUNDY: Well, I respectfully doubt that either case prevailed. As far as TCI's involvement in the Florida Keys, it was a classic system and it was just plain a good business deal. John Malone came down there and did a considerable amount of study personally and he liked some of the engineering achievements that had been accomplished in the Florida Keys in the line of microwave as well as the earth receiving situation. The system had a lot of appeal to Dr. Malone and that's what did it plus the fact that it was an excellent business proposition for them because of the microwave. I think they envisioned the microwave to become a part of their common carrier division that already existed. So it was ideal for them.
FROKE: So they saw it fit into their total business plan.
MUNDY: That's correct.
FROKE: When did you buy the Key West system? Do you recall?
MUNDY: Oh, boy. I think we had it for about five or six years. So we'll move backwards from that and we'll come up with the date.
FROKE: So that would probably be about 1977 or '76, somewhere in there?
MUNDY: That sounds about right.
FROKE: How did it come about that you bought the Key West system or was that an original construction on your part?
MUNDY: No. The Key West system was probably one of the first cable systems in the United States. Actually it didn't operate as a conventional cable system.
FROKE: Because of the distance from television signals.
MUNDY: They had no signals except Cuba and they put in a broadcast-quality studio and operated it really as a closed-circuit television station providing the programming from the studio. It was all broadcast quality. You could have set a transmitter in there and put up your antennas and gone on the air and met the basic requirements for a television station.
FROKE: And they would acquire programs from CBS, NBC, and ABC and play them back on their system.
MUNDY: They did a lot of that and they also originated an awful lot of programs there. Because of the bilingual nature of the Florida Keys, they tailored the programming to that group. And they also carried Cuba on there. When we bought the system, some of their own original antennas for Cuba were still in place down there.
FROKE: What prompted you to buy it or how did you learn about its availability?
MUNDY: I'm quite sure that was brought to us by a broker and then after going down there and meeting the people involved--the Spotswood family primarily--the whole situation appealed to us. It was quite a challenge. It didn't turn out quite as we had originally planned. The two plants in existence at the time were Key West and Marathon. Both of which were in very poor technical condition. We envisioned basically doing a certain amount of repair and upgrading in those plants and then going into the construction phase to increase the subscriber base but it didn't work quite that way early on. After we were there a few months it became obvious that we had to rebuild those two plants and then go into construction for expanding the systems. But it worked out very fine.
FROKE: I want to come back to that from a technical point of view at a later time. Here from Pleasant Gap, Pennsylvania, so few people in State College would know that your company was actually operating on a national basis and engaged in business down in Key West, Florida.
MUNDY: That's true.
FROKE: How have you and Bob Tudek--and this doesn't have anything to do with anything we're talking about-- how have you and Bob Tudek been able to do this in such a quiet way? Here you are one of the largest multiple system owner cable systems in the country and there are very, very few people in State College that really know the scale and scope of what you have accomplished.
MUNDY: Well, Bob and I, number one, have always been low-key type individuals. We never looked particularly for any notoriety. So with the contacts we had within the communications industry, people took us to these opportunities and we discovered some of them on our own. Early on most of our administrative functions were based outside of this area. For instance, our accounting department was based in Ashtabula, Ohio, early on. And he and I commuted there. So really back here about all we had was the engineering function and administratively my office and Bob's office with our secretaries and that was it. Then we moved the whole accounting department back to Happy Valley down in the Bellefonte area. We bought a building and put them in there and that's the way it's been. We've just been low-key. We didn't want vendors ringing and beating on our doors. And so we've been able to operate very well.
FROKE: It's an amazing story. It is actually one of the finest cable television organizations in the entire country but yet it's tucked away here in State College where very few people know about it. Obviously you're widely known in the cable industry for a wide variety of reasons.
MUNDY: Well, thank you. That's about the size of it. I think recently several times when we got into the broadcast business Zimmerman brought out the point that people in the area didn't realize who Tele-Media was and the extent of their business activities and the fact that they had almost 100 people employed locally in Centre County operating here from this complex. I guess we didn't really realize that we had that many until we went through a phase of looking into the future and what our physical plant requirements would be for this organization locally.
FROKE: When you began rebuilding for your new Tele-Media, you had been the twenty-first largest cable system in the country--multiple system operations--and you were operating somewhere around 400,000 or 500,000 subscribers. What lessons did you learn from that that resulted in changes as you began thinking about what you were going to do in acquiring new systems and building your new organization? What were some of the new things that you drew upon for experience? Or did you say things worked well based on the guidelines we'd used before--the principles we'd used before, the business plan--and were simply going to be successful in the same way that we were before.
MUNDY: Well, that's a pretty difficult question. I don't think that we had any real basic changes in our philosophy as far as the business and how we envisioned the company as to its structure. Certainly when we started on the second cycle we were more knowledgeable than we were and experienced than when we went through the first bit. We used the same basic criteria, if you will. One of the big advantages we had, and this is an advantage and not a change, we had a management group put together who were used to working with one another and that really probably was the thing that enabled us to go as rapidly as we did. Early on we were very disappointed in the plants that were for sale. The problem was the plants were run down, needed rebuild, and the owners weren't willing to recognize the fact that these would have to be rebuilt when they looked at the price they wanted for their properties. But, no basic difference in our concept. We had the same philosophy. The biggest single advantage was that ... well there were several. One, we were known in the financial community. Two, we had a trained management group that was used to working with one another and that's what's made the second cycle as successful as it's been.
FROKE: So you were looking for good communities, good towns, good municipalities in the sense that we talked about before--they had the right feel. You were looking for the small to medium-sized community that would be manageable and would not require all of that struggle and pain that you encounter in the major urban metropolitan areas.
MUNDY: Yes. We weren't ready, even at that time, to go into the Pittsburghs. We had opportunities that we could have probably expanded on in Pittsburgh itself years ago. But Pittsburgh wasn't ready for it, our industry wasn't ready for it so we didn't move.
FROKE: Moving into those new communities and talking forthrightly about what was possible and telling them exactly what it was that you would provide as a cable television service. No blue sky--lay it all on the table so that everybody is up front with the information.
MUNDY: Basically, that's the philosophy we had going in the first time and we didn't change that. If you were to go in any other way, and many people did, lo and behold after they built their plant and people saw what they got, what they had been told or implied in their meetings early on, it just made for a bad environment for the business and many of them weren't too successful. So we didn't do that. We laid it out and told it like it is.
FROKE: There's a certain amount of lore about Tele-Media and one is that you and Bob share the executive responsibilities and that you function in charge for three to six months and then Bob does it for three months to six months. At least I know as we tape this recording Bob and his wife are down in Florida and you're here in Pleasant Gap running things. Does it really work that way?
MUNDY: We really both work all the time if the truth were known. We do have ...
FROKE: So you have fun with this story.
MUNDY: Well, yeah. We both work all the time. For instance, let's see, we started this on Tuesday ... Monday I was engaged in a three-hour conference call with Bob in Florida with some of my other people. So we both work all the time. But there are advantages to it. We can, in fact, get away. You're not on an eight-hour pound when you're down in Florida. You have a chance to relax and do other things so there's lots of advantages to it. But no, we work all the time.
FROKE: It just becomes a matter of switching the physical environment.
MUNDY: And there are certain of the basic administrative or management functions that stay placed here, that have to happen here. That when he's here, he takes care of; and when I'm here, I take care of. But that's ... We both work full time. The bankers ... I kind of get on them when they ask me when I'm going on vacation.
FROKE: One of the lores of cable television on an industry-wide basis was its beginnings as something of a ma and pa operation. A husband and wife working out of appliance stores. A husband and wife working out of even funeral parlors--there are a few of those down in West Virginia that I've run across. These things became family type of operations that continued for a long time. I think that that is characteristic of Tele-Media in that, certainly as you have talked, you've identified the involvement of your family in Tele-Media. Bob, then, has the involvement of his family in Tele-Media. What are some of the advantages and some of the disadvantages and do you see that changing at some point down the line?
MUNDY: Well, there's both. One of the most difficult things that you're faced with when you do involve your family is to make in fact, and have it not be fiction, that at eight o'clock in the morning or whenever the day starts the family are the same as any other employee. This is one of the difficult things and this has to be understood by the family participants to the extent that it becomes obvious to your other people that that, in fact, is the case.
FROKE: They're an employee of the corporation and they have to observe all the guidelines.
MUNDY: That's right. That I've always insisted on with my family and Bob has with his and we've been fortunate that that's the way it's worked. That's one of the big things because if you're going to have any longevity with your key people then they have to get the impression and have to be shown that the opportunities for advancement and so forth are just as equal with them as it is with the family people.
FROKE: Do you have performance evaluation criteria for your staff in general?
MUNDY: For the most part, yes, and we also have a review of the staff once a year.
FROKE: And these same guidelines lines would apply to members of the family.
MUNDY: To both parties and we make a habit that in my case I never review my family members. Bob reviews them and I review his family members. And the same way when we brought them on board and hired them. I never hired any of my family. He would do that and the same way with his family that came on board.
FROKE: And he would make the evaluations as to where they might fit within the company based on their background.
MUNDY: We'd discuss it, of course, mutually ... separately. But we've kept that apart when they walked in the door. My son-in-law is Frank Vicente. I'll never forget Frank came to me early on. After he graduated from Penn State, of course, he went to the Air Force and ultimately was a career officer but he decided to get in the cable business and when he was considering coming in he told me his father--Frank was from Latrobe--he told him he said, "Now look, if you go to work with Everett and Tudek in Tele-Media you're part of the family and you're going to have to work harder than anybody else there."
FROKE: That's another part of the ...
MUNDY: That's right and that's been the philosophy that pretty much has been the case. In Doug Best, who is Bob's son-in-law who has our Connecticut companies in that whole region up there ... he's done an excellent job. We now have Frank and my daughter down in Richmond doing a big job. We had Tom in corporate development but we have him working primarily now in learning the security business and where the values in the security business are and how one operation affects another. That study ... hopefully we'll be the most knowledgeable people about those things in the business and that will enable us to get financing and all sorts of things. And then, of course, Jim and my daughter-in-law are down running the security company out of Greenville, South Carolina. They're coming up to speed there and doing a great job.
FROKE: In some of these arrangements, and this question begins to move into a personal realm, a private realm and if you don't want to answer why just simply tell me to go mind my own business here, but there are situations in the cable industry, as well as in the newspaper industry--Louisville, Kentucky, for instance, with the Bingham family and so on--you see it in the popular press quite frequently where a business such as Tele-Media has grown to become a major financial entity as such and stresses and strains begin to develop within the family and all sorts of problems begin to arise. You're now talking big business with Tele-Media. Do you anticipate that at some point down the line there are going to be unusual stresses and strains with Tele-Media or in this fifty-year plan that you and Bob have developed for your company have you anticipated that some of these transitions can be made there? Do you want to tell me just to go mind my own business?
MUNDY: No, no. I think in business it is a problem that has to be very carefully thought about going in. That's the time to think about it or let's say put it on its right track. Again, we have organized this business in a very democratic fashion where everybody has a voice.
FROKE: This going back to Tudek, MUNDY: and the coworkers--TMC.
MUNDY: That's correct. And when it comes to equity shares that we normally give out for special assignments ... In other words, if we open up a whole region and we move a family into that region with a VP-general manager to be responsible for that, we are in the habit of giving an equity bid in that system to that individual.
FROKE: To provide motivation as well as ...
MUNDY: That's right. It doesn't make any difference who goes in there. When we select them there's no differential between one or the other. In the ranking as far as titles in the company, there's no difference. The guy's a VP or he's a senior VP, that's it. I don't envision it. Now as far as my family is concerned, they understand that they're equal with everybody else. They would additionally one day participate, through my estate, more than the others but even that estate is laid out in a fashion that the voting rights don't become overbearing.
FROKE: Do you discuss with your family your plans for the estate or do you regard that as a personal matter?
MUNDY: In generalities I have gone over it and what I'm trying to do. The estate, as a matter of fact, has just been really pretty much finalized two years ago. There's still some things to do but the basic concepts and so forth have been put in place and so has Bob's.
FROKE: Another question that is related on ma and pa operations and their evolutions, frequently these evolve into public corporations. Have you and Bob considered the possibility of going public with Tele-Media?
MUNDY: We've always tried to avoid that as long as we were able to get financing based on the private sector. We've tried to avoid that for a number of reasons. Probably one of the most important ones ... At the stage the industry has been in, for say it was in when we started to come up through and even as we came up through, in order for us to have the ability to move quickly and without exhaustive soliciting of authorizations and so forth we've shunned away from the public offers. We still would rather remain a private company and will probably do so until such time as financing basically isn't available.
FROKE: Your relationships with the federal security agencies only touch on those things if, by chance, you are acquiring a publicly owned facility.
MUNDY: That's right.
FROKE: You don't have to deal with that in your own company as such?
FROKE: Cable television used to be very simple. Well, at least perceived as simple. You put up an antenna to get a broadcast signal and distribute it to households and that was the business. It's much, much more complicated today. We've identified some aspects of television cable diversification not only being distribution but also a programming agency.
FROKE: Tele-Media is also diversifying. Just a few years ago you acquired a significant number of radio broadcasting stations.
FROKE: Do you want to talk about that a little bit? What prompted that decision. Your Lewistown experience, I'm sure.
MUNDY: Well, Bob always had the desire for radio or TV.
FROKE: Did he work in radio at one time, too?
MUNDY: No, but as I told you he was a speech major in college and he always wanted to be a sports announcer. He's heavy in sports so it wasn't hard to convince him. And I always, for a technical point of view, was extremely interested in the radio business. So that plus the fact that we were looking and recognizing that you can't have all your eggs in one basket. I think a classic example of that is the present what I call an evolution that we're going through in the communications industry. It's best to have things split up in several baskets. So with that in mind the radio was a natural for us. We felt that we had the management expertise within Tele-Media and certainly accounting and that sort of stuff within Tele-Media that with a reasonable amount of time we could do well in broadcasting presuming we had a good group of people there, which we have. So it was a natural. We're very happy we're in that. We're fortunate. We have some good markets, we have good people and we're now very heavily involved in the management day to day of that company. Early on we kind of sat back and went through a learning phase, if you will. But we're gradually becoming more and more involved in day-to-day management.
FROKE: Your vice president in that area is Robert Zimmerman, a long-time State College broadcaster.
FROKE: Did he come to you or did you go to him in putting together this first package?
MUNDY: I think he mentioned this package was going to be available, I think is the way it happened. Then one of the brokers that we knew brought this to our attention because of the local stations. They anticipated we would have a particular interest to the local stations, which we do. That basically is how it occurred. It was a combination.
FROKE: Did you sit down with Bob Zimmerman, you and Bob, and talk it through or did you work through the broker primarily.
MUNDY: We leaned very heavily on Zimmerman because Zimmerman was very highly respected in the radio and broadcasting business. The financial people in the radio community had a high regard for him because of his function and the gentleman that really owned the stations at the time. Both of them were highly regarded in the business. We sat down and spent a lot of time with Zimmerman proper. The broker didn't function that much. It was kind of between the owner, Zimmerman, Tudek and MUNDY:--that's how it was put together.
FROKE: And you have something like nine stations now, is that right.
FROKE: Primarily in the eastern part of the United States.
MUNDY: Out as far as Indiana. We start in Rhode Island and come on through. We have two in Rhode Island; two in eastern Pennsylvania; one in Hershey, Pennsylvania; two in State College; and two out in the farm country in Indiana.
FROKE: Is your plan to expand with radio properties just as you planned to expand with cable systems or have you reached a plateau that you feel comfortable with?
MUNDY: Plateaus are always disastrous in business.
FROKE: You either grow or ...
MUNDY: You either grow or get out. At least that's our philosophy.
FROKE: What's the basis of that philosophy? Because your expenses and costs rise and you don't have any ...
MUNDY: Well, people become ... I'm hunting a word and I can't think of it ...
FROKE: Self-satisfied ... dormant?
MUNDY: Plus the fact their morale begins to drop because the challenge ...
FROKE: Nothing seems to be happening. The same thing day after day.
MUNDY: That's right. Now the people, particularly in the radio business, are very energetic people. They're sales motivated--that's their life. If they see them come up to a point and it flattens out or it becomes a plateau, they start looking around ... "Is this what I'm going to be the rest of my career." They're looking for bigger and better things.
FROKE: And that begins to churn the organization.
MUNDY: That's right. Once you get the ball rolling, you have to keep it going. You can't say, "Well, I've arrived, it's nice to be here," and sit down and relax. It don't fly. And that, literally, is the actual bit that's involved in the cable business. Your key people in the cable business, and most of the key people in broadcasting, they recognize that take-home paycheck is not your life. Your real wealth is in your accumulation of equity over the years. Your paycheck is for incidentals, fun, and that sort of thing. The equity is what counts and if you're going to acquire that you can't quit moving. You have to move. So we would be expanding, yes.
FROKE: Radio in cable is, today, a very prominent topic. In the western show out at Anaheim, California, this year I was told that the exhibit floor, while it was not dominated by audio-type systems or radio-type services, certainly there were very, very prominent overall with the equipment manufacturers as well as programmers. Now that you have this foothold in radio broadcasting conventionally, are you going to make some kind of a link into cable distribution? Have you thought about that at all ... a super radio station or something along that line?
MUNDY: Well, I don't know if a super radio station but cable and radio always has been common with us. Early on we've always attempted to carry a high quality package of FM. We learned that in State College way back in Centre Video. With your music department at the University, we had that certain group of students and faculty who ... any number of them didn't even have television sets but they were cable subscribers for the music. And when we redid the microwave system ... terrestrial microwave coming in here and brought the New York stations in plus the CARS we put in for the stations to the east and Pittsburgh. We brought in FM stations on subcarriers for their use. So it's always been a common thing and I'm glad that we went into radio rather than TV broadcast stations because I think the TV broadcast stations ... it's been a natural evolution. The delivery of the material has changed. Now the only thing that we lose with satellite delivery is the local impact but that's even being changed with advertising insertion and instead of insertion you can actually take breaks on some of these programs, run your own newscast and the whole bit. The delivery process is changing. Radio's going to survive. You don't have a television set in your car--it's not even legal--but you certainly have a radio receiver in there.
FROKE: Even with national news programming services such as CNN there's a diversification at the regional and local level now.
MUNDY: That's right and they provide for that in keyed breaks in their program sequence so you can insert your local situation.
FROKE: Chicago is beginning a Chicago news network which will be a twenty-four hour news service. Washington has one. Los Angeles has one.
MUNDY: A lot of them are a bit redundant--you have to have your national and you have to have your local. And the same thing now ... in the radio business is where this glares.
FROKE: So you've got an audio service and you've got a video service which is basic to your delivery system with Tele-Media. But you're not quite ready to say that you're going to enter the national programming business on the audio side or ...
MUNDY: No, I think there's so much to be done in the areas we're presently involved in that we have lots of time for that sort of thing.
FROKE: Well, let's go around the video production side because I do know that in addition to your radio broadcasting facilities you do have major television production facilities up in New England.
MUNDY: That's correct. We have two. One in Martha's Vineyard which is an excellent facility and, now when we bought the western Connecticut plants, we have a separate company within that company that is a production facility. They cater to industry. They do a lot of things for cable in the way of insertion and so forth and it's an excellent facility--completely self-supporting. All of our entities that we get into are designed to be self-supporting, and that one is.
FROKE: They produce commercials for ...
MUNDY: They produce commercials. They produce training programs for industry. Wherever video ...
FROKE: ... can be used.
MUNDY: That's right. They are knowledgeable in applying that and do very excellent work. Since we took over we've pushed them out and made them go down to New York City and really crack that market. They're doing excellent.
FROKE: And by the location that they have, they probably can compete very effectively against some of the New York production companies which would ...
MUNDY: Oh my, yes. Most certainly. Then, of course, we have a local company which does your Keynet advertising insertion. Within our radio group Lion Country Video is a part of that which is on your local system. So we've been at this not only in this area but we did local origination and public service work with video years ago. For instance, in our Lake Erie company we had a mobile van traveling all the time doing things in the community so it's not new to us.
FROKE: The production facilities that you have in New England have been described to me as comparable to what you would find in any major metropolitan television station.
MUNDY: That's correct. They have a number of studios. They're really equipped ... like again, you could throw up an antenna and go to work.
FROKE: You could become a national programmer and have your own program channel that you would sell to other cable systems.
MUNDY: Well, that's true. But, again, we've got to look at the economics and the whole bit. I don't want to get ahead of ourselves.
FROKE: All sorts of opportunities. You mentioned Keynet. I was really not aware of this one.
MUNDY: Keynet was a local company formed down in Bellefonte. They formed with the idea that they wanted to do ad insertion on cable systems. That they wanted to do it better than anybody else was doing it and they recognized that they had to develop the equipment to do it.
FROKE: The early days of ad insertion sometimes were pretty painful.
MUNDY: Yeah. Three people ...
FROKE: Sometimes you could see them, sometimes you could not.
MUNDY: You could almost see the guy sitting in the studio. But anyway ... They have developed the associated software for the computer program to conduct this insertion overall at the remote sites as well as automatically record the events for billing. They have achieved that. They have the ad insertion equipment which we are now beginning to put in place in our various systems, and there's a heavy demand. They're finishing up the new software and after we get that copyrighted I'm quite sure that we'll be ready to push those out on the open market. We're going to not necessarily move that company out of here but we are going to get our big facility in western Connecticut and this company together because of the expertise that's up there plus what's here. We're going to melt them together and let them go to work.
FROKE: Keynet then functions at three different levels. In one sense it's an advertising agency.
FROKE: In another sense it's a production house.
FROKE: And in another sense it's a distribution system using computer technology in order to get the inserts activated at cable systems whoever their clients might be.
MUNDY: We have a number of the TCI systems that they do the insertion for. They have the remote antenna site equipment. They have the centralized computer system in the offices here in the Crider Exchange Building in Bellefonte. They have their studio for making up the ads in the Crider Exchange. I think Crider Exchange is the one over Plum's Drug Store there. The actual timing and all that sort of stuff is controlled, remotely, from down there to another computer-based device at the antenna sites where they can change them, do whatever. Of course the tapes that are made up down there are taken to the sites and put in the various decks so that they can operate in that fashion.
FROKE: The communications to activate the video decks, that comes out of Bellefonte?
MUNDY: They can change them. They put them in storage.
FROKE: The basic program is at the local site.
MUNDY: They put them in storage, in memory, at the site but at any time they can call that site up and change the sequence, eliminate, add, whatever they want to do. That is the management of the program library. But the program library is generated in the studios here or supplied by the customer in the form of tape and that has to be taken to the site and put into one of the cassette players at the headend. That's how it's done.
FROKE: It's great that you were able to put together this organization and satisfy the professional aspirations of one of Penn State's great gymnastics stars. Marshall Avener wanted to get into radio and television from the very beginning of his academic career at the University.
MUNDY: That's right. Marshall wanted to be part of that company when we acquired that company. He's quite a guy. He's really a live wire, that boy.
FROKE: You also have another business--installing satellite earth stations for people who want to receive their television programming in that way.
MUNDY: That came by as a natural. It was a need. People in the cable industry have constant pressures to expand their services into rural areas many of which economically are not really feasible. Now is wasn't fair in our minds to let those people sit out there without the benefit of television services. So we came up with the idea of forming a satellite company that would sell, lease, whatever the actual hardware--that's the earth station receiving equipment. Then within that organization they have a programming company to supply the various pay programming, if you will, on a national basis. So it's all put together and it does operate contiguous to our systems where that need is. Of course, that generally is the programmers' requirement, too, that we operate in the area where we do have franchised cable systems and we also have their programming on our systems. But we can't just go out here and stick a group of earth stations out here and put the programming on if we're not even in the area. We can sell to you if you call up our programming division. We can see that you get the programming.
FROKE: So you are the representative of many of the cable programming services that you provide.
MUNDY: Oh, yes, most all of them. We are authorized to sell in all of our contiguous franchised areas and there are certain conditions where we can sell it in other areas, too.
FROKE: A decade ago there was a lot of conversation about a competing television service and one that would cause cable television a great deal of difficulty. That was the direct broadcast satellite--DBS. At least one aspect of it has really gravitated toward cable. Cable television is really functioning as the local agent or the local representative for what you might call DBS services. You hear from people who want to have television service; you work with them to get a ground station, earth station, satellite installed; you sell them the program services; you bill for the program services; you pay a certain amount of it back to the program vendor, so in a sense you're really in the DBS business, too.
MUNDY: Well, I guess you could say that.
FROKE: What you're suggesting is that cable has not pre-empted DBS. That it is still out there.
MUNDY: That's right. That's my opinion or let's say that's my concept of the definition of DBS.
End of Tape 3, Side 1
MUNDY: I have a number of thoughts on the subject. Long ago Bob and I recognized if you were going to succeed wherever cable went we would never succeed if we took away the local charisma. Example, Ashtabula, Ohio. Early on when we were authorized to carry certain stations and had to get special permission for others, it was clear that the people in Ashtabula, Ohio, didn't necessarily give a damn about the news in Youngstown--they wanted the Cleveland news. The people in Erie didn't care about Youngstown news. They were primarily interested in Pennsylvania news and in their local news. The point of all this is that DBS puts together a group of channels and delivers them as a package to a subscriber, but if they are not able to maintain a local format within the area or the contiguous area where that subscriber is, they're not going to keep that subscriber. That's one advantage a newspaper has. A newspaper has national news and it has local news. In radio we have national news, local news, national advertising, and local advertising. As far as the advertising is concerned, we carry them at two distinctive accounts. We keep track of them income-wise separately and they're sold through two completely independent efforts within the organization. So if you're going to be in this business, if you lose the local charisma you're not going to be successful. No way. I don't care what the technology is.
FROKE: So you are not optimistic about DBS as a long-term television service?
MUNDY: No. It will probably have a place. Each one of these things that come in take their little niche and what this does is fragment the market as far as the advertising market is concerned and the time market for viewing. Cable is unique in that, yes, it's getting into the advertising business but that's extra income. Fundamentally, cable doesn't need that to survive. So it will be a major thing with us in time, and it's a sizable one now, but you've got to have the local part at the same time.
FROKE: Total advertising, I think, is now up to about three billion counting national, regional, and local--at least based on what the professional advertising cable association puts out in terms of data.
MUNDY: Well, that's about right.
FROKE: So you don't think that Chuck Dolan and John Malone are going to make a major impact with DBS?
MUNDY: I think what they're going to do ...
FROKE: Maybe have some more movie channels.
MUNDY: Well, they'll probably utilize a lot of their programming themselves on their own cable systems, let's face it.
FROKE: It will be another distribution system, then.
MUNDY: That's right. And I could be wrong but if they're successful in keeping the local contact with the people then they stand a chance to do pretty well. But if they don't do that, they'll never make it and we'll still have a place. You see I envision cable as a spectrum within a spectrum. I always try to explain that to people. Our electromagnetic spectrum is saturated to the point now that everybody's in the middle of the street with guns fighting with each other. So who's going to get this slot and who's going to get this slot. Here we are in the cable business. We have a captive spectrum--the whole thing. Now that we've gone to optical-type transmissions we have a spectrum even broader than the electromagnetic spectrum. So we shouldn't get all nervous about these things. Let's develop what we have here because it's going to be needed. The other's carrying a full load now and everyday they're fighting over who's going to get what. We've got this beautiful spectrum here that we control. Therein lies our security.
FROKE: As you were talking I could not help but go back and think about your Lewistown Sentinel days.
MUNDY: Oh, yes. I loved those. I was fortunate ...
FROKE: The local flavor and its importance. It carries over into all media, really.
MUNDY: I can remember the days, particularly at the Sentinel, of the World Series. You know we didn't have television in those days. They had a big board that they mounted on the side of the building over there and there were people inside with a teletype. And they were moving the ball around and the runners around on this board so the people standing out in the street could tell what's going on in the World Series. So we've come from that in my lifetime to what we have today.
FROKE: I used to be a sports announcer, too. I'll have to get together with Bob sometime. I used to recreate games for a small radio station out in South Dakota.
MUNDY: Well, you have the voice for it. I imagine your air voice is very excellent.
FROKE: So we had a lot of fun. The context of this discussion is diversification of the activities of Tele-Media and we have been talking about Keynet-- their ad insertion--and that lead us into a number of side discussions. Let's go on and be specific about some other ones, however. Your security system down in the Carolinas. Could we talk about it a little bit?
MUNDY: Okay. It's diversification. My youngest boy has always been interested in, let's say, digital communications. He started out with me when he was in junior high school and up through high school in the radio ham shack. I didn't have teletype equipment there and he got very interested in this so I went around and bought old Western Union gear, repaired it, and put it on the air. This was his interest and from there into the telephone business. He always wanted an interconnect company. From college we got him into computer stores. We had a couple Computer Land stores and he's following this technology. Then from there when he was with Tele-Media he set up our accounts receivable systems throughout the company and things of that nature. Security was a natural thing for him. When I didn't see that he got into an interconnect company in the phone business he grasped this security situation because so much of the digital or computerized technology has grown into or come into the security business. His interest there was such that he wanted that project if he could so we gave it to him. We invested in it, and they're doing great. His wife is quite a computer gal and she majored at Penn State in advertising so they make a hell of a team.
FROKE: Is the security tied to a cable distribution system?
MUNDY: We do that in Florida but that's the only place. Now that existed when we bought some Florida systems. Again it needed to be upgraded. As you may recall years back, Tocom came out with a total communications system. The nuclei of that whole system was a security system with its own computer for monitoring and all that sort of stuff. So we had that in our Florida systems but that's the only place we're actually using the cable system to carry data involved in the security plan.
FROKE: With your son, the security program that he is developing does not necessarily link into cable technology?
MUNDY: He's constantly looking and acquiring the expertise to put it on cable where requested and undoubtedly one day when we really get into the data business in cable. You see the banks are our clients, the oil dealers are our clients, the power companies are our clients, the security companies ... we will see a day that that will be there.
FROKE: In a sense your son and you are positioning Tele-Media for that kind of activity by getting a strong foundation in conventional security systems.
MUNDY: Right. We would hope that all comes to pass. I envision a spectrum within a spectrum ... keeping that in mind ... that we're going to do that. We would have done it years ago but in this business the expertise was not there. The best thing that ever happened to us is we formed CableLabs. At least now we have a group to apply technology to cable and certainly I would hope to come away from that with standardization. The only reason that the cable company today isn't taking care of all your fuel dealers and everything else in the community by telling them when to go out and service Joe Blow's oil tank is that nobody could come to a standard system and those that did have systems wanted to say how many gallons were in the tank instead of just sending an alarm system back to the computer at the oil dealer to roll your truck. Who the hell cares how much is in it. They'll set that gauge when they put the tank in. For years I've been fighting this battle and it's going to come around. CableLabs ... I do sincerely believe it is going to be the Bell Labs of the cable business and I do think they're going to bring standardization to our industry which will bring down the cost because of mass production and we're going to be able to be competitive. But under the concept that everybody's system was the best, that's what we should use and fighting among ourselves as to who we're going to use has kept us out of the business.
FROKE: You are participating in the financing of CableLabs?
MUNDY: Yes. We were a charter member of CableLabs when it was organized. It's a sizable expenditure. There have been some, naturally in our midst, that may not completely envision what's going on and have questioned our expenditure but Bob and I both have insisted that we continue to support that.
FROKE: Another diversification is in telephone answering services. Where do you have those operations going?
MUNDY: That's a very small part. That is also in the south and actually the one big situation that we got involved in for a brief period of time we didn't stay in. Telephone answering and paging ... we did investigate that industry. We got involved with another party for a period of time. It wasn't a question of the industry not being right ... the parties just didn't mesh. We didn't stay there. But we have learned the technology, if you will, and from time to time we'll be taking advantage of it when it's the right thing to do.
FROKE: This is another one of those ancillary services that might have a market, might have a demand at some point down the line and when the technology is ready for it.
MUNDY: Right. The paging industry is going through a big evolution right now, too. They're going national. Satellites--that's a hell of a competitor. Of course it's no good to the local guy. It's only good to the traveling man. That's another thing. People look at this and get all upset ... it's going to hurt our business. It's not going to hurt the business. It's going to take care of something that hasn't been taken care of up until this time. So that's what I feel about that situation.
FROKE: Are there other areas that would be classified or categorized as diversification that you would like to talk about or have we hit on most of them?
MUNDY: I think we've hit on most of them. One thing you have to be careful of in business. If you get the idea of diversifying, you have to be careful that you don't move too rapidly and not do a good job on any one of them.
FROKE: Forget where you bread and butter is.
MUNDY: That's right. It has to be, let's say, put in a balance and the balance is based on the risk factor as you would when you made up a stock portfolio. You have so much of this, so much or that, and so much cash. You have to be realistic about what you're doing.
FROKE: As a result of your background, Tele-Media has a reputation of having a number of firsts in application of technology in the industry. In reading about Tele-Media I ran across the reference to the fact that Tele-Media had the first thirty channel two-way converter system. That was out in one of your Ohio systems, right?
MUNDY: Right. That was thirty or thirty-five channels. I don't remember all the details and I don't want to misstate anything. We had two areas going at that time. Initially, we put in two-way capability in Ashtabula and Geneva and up along the lake. We came to the point where we took on the philosophy that we would just design two-way, period. Even to the extent of inserting the crossover filters even though we didn't put the amplifiers in and use it as the need called. I guess the first time that we put in a system and really opened the return channel completely was in Celina, Ohio, as I recall. That's where we ran into the noise problem and where I tried to get C-COR to go to the squelched approach on the return line. For instance, if you're doing pay-per-view or any of those things your computer would interrogate one branch at a time and as those transponders opened up and sent their data back, those amplifiers would automatically open up and everything would be in great shape. But everything else would be shut down.
FROKE: What were your applications of the two-way capability in Celina and Geneva?
MUNDY: Well, in the Geneva area up along the Lake Erie area originally it was primarily local origination both by Tele-Media and by the schools ...
FROKE: So it was an educational application.
MUNDY: That's right. When we designed that system we designed it so that we could use the return plan to place the programming where they wanted it. In other words, people are clannish. Town A doesn't necessarily want their programming going to B or C. This came out again up along the lake. So we designed the plant to be flexible. We designed the plant to carry the programming from a given school to the other schools they wanted and so on but to be flexible. We brought the school administrators, including the school superintendent, his visual aids people, and that sort of stuff, to Penn State and they spent a lot of time. They spent the better part of a week here at Penn State with your people getting the basic background so that they could see what they really wanted to do and what was practical. But that was the early application. Later we used the two-way concept on microwave as well as partially on the system to carry programmable data stream to our converters in the homes. Up along Lake Erie we used the CARS microwave system, probably one of the early ones, because when we went to Jerrold they were all nervous as to what its reliability would be. We were going to carry the data stream on microwave with their converters. So we ignored them completely and put our sub-carriers on and did it.
FROKE: You mentioned awhile back the importance of maintaining local emphasis in programming and in news and the like. I think another verity that is built into the U.S. culture at least in most states is that education is a local control situation. People feel very uncomfortable if the educational system begins to move outside of the local area.
MUNDY: That's true.
FROKE: We take a great deal of pride in our local schools.
MUNDY: Right and when you start consolidating you get in trouble.
FROKE: Bigger is not necessarily better in this realm. Another first for Tele-Media was the fifty-four channel two-way AML system, first in the nation. AML, I think, was a huge development if I'm not mistaken.
MUNDY: That's correct.
FROKE: What's the context for that and where did that take place?
MUNDY: We put a number of them in and I have to collect my mind. Of course we did it in Connecticut--that was northeast Connecticut. That whole area of northeast Connecticut is interconnected with two-way AML and it's a fifty-four channel system as well as the University up there. We have that. That was a big project.
FROKE: That was a huge project. Doug has talked with me about it from time to time.
MUNDY: That project was a cooperative project between the University, the telephone company, and Tele-Media. The telephone company and Tele-Media shared in the actual installation of that system and the physical plant.
FROKE: So you could accommodate their concerns for the voice which ...
MUNDY: That's right. For their equipment as well as our equipment. Okay.
FROKE: That should have been written up more widely. That's a beautiful system that you put into the University of Connecticut.
MUNDY: Yes. We're very proud of it.
FROKE: You should get it written up.
MUNDY: It took the cooperation of a lot of people to get that accomplished. Okay. We had, I think, AML microwave in Erie, too, and where else? By golly, you're starting to pick my brain here and there's a hollow spot up there.
FROKE: In addition to the large number of channels that would be one aspect of it, another is the use of AML. What are the advantages and disadvantages of that?
MUNDY: Well, AML basically is a system--a multi-channel system--that has the package concept. AML incidentally is an AM system.
FROKE: In terms of frequencies.
MUNDY: Conventional CARS has discrete channels in the FM-type of equipment. The biggest advantage of AML is the ability to handle a package of frequencies at the receive site. The equipment rack you could put in one pedestal of this desk. (Much like a trunk amp in size.) In conventional microwave, CARS microwave, you would have a discrete receiver in a nineteen-inch rack for each channel. Now envision this to be fifty-four channels. So AML definitely has its place and will continue to have its place. The hops are shorter on AML unless you could boost the power. They do have provisions to boost the power and authorization to do so under certain circumstances.
FROKE: Another area that you were working in very, very early was fiber. Charleston, West Virginia, now has a substantial amount of fiber that has been laid for trunk or ...
MUNDY: Initially we joined some thirteen antenna sites or so. I don't remember their name, but there are a number. Fiber was an ideal way to do this. In other words, we can take the best antenna site out of the whole group and we can now feed a fiber system that interconnects all the communities that were initially served by the separate sites. We increased the quality of the pictures drastically. It was a natural at the time when you were piping this through that a portion of your trunk system was also trunked in fiber. So that's how it came about. But the initial effort was to pick out the best off-air signals you could get and give the whole area the benefit of those. Certainly from an economic point of view it's much more reasonable. It's much more maintainable and we're away from the old thermal equalization problems and the long cascade. We're away from a lot of the noise problems.
FROKE: So you might pick up one broadcast station off one of the antenna sites and another off another one depending on what the quality is and then feed them by fiber into the headends of the individual systems.
MUNDY: For the most part in that particular case I don't think we used over two of the old sites to the maximum and it's all fed in and piped to all of them. Then, of course, we have our earth stations and that's always a problem because the redundancy in those sites was tremendous. The cost was tremendous.
FROKE: Now you have one or more earth stations?
MUNDY: And that's it. So there's all kinds of advantages above and beyond the quality that we're producing for the subscribers.
FROKE: How much fiber are you laying right now, let's say in a six-month period?
MUNDY: Well, we're down in Delaware, down in that end ...
FROKE: Are you using it primarily for trunk and feeder?
MUNDY: Not feeder.
FROKE: Not feeder, just trunk. Okay.
MUNDY: That's right. Although they have come out with some new directional couplers that are making the picking up ... not feeder but sub-trunks. A feeder isn't practical on fiber just because of the subscriber tap off unit. It's really not practical at least to my knowledge at this point in time. But the sub-trunks are becoming practical now with the effective optical multiplexer but it's really a directional coupler. They have developed those into a very simple thing to handle the same as the passive type lump constant ones that we've used in the cable business for years.
FROKE: I want to come back to that topic of feeder and talk a little bit about the future with telephones. You did some pioneering work in the clustering of cable systems and you were alluding to that just a moment ago in the application of fiber. You acquired cable systems over a period of time to take advantage of the economies associated with having clusters of cable systems in a geographical area.
FROKE: That's paying off in a wide variety of ways for you. Could you discuss a few of them?
MUNDY: Well first off, if you can cluster your systems-- ignoring the technical aspects--just in management and personnel ...
FROKE: So you could have a southern Ohio cluster.
MUNDY: Region or cluster and you can do a lot of things just in the administration. You can generally upgrade the technical staff as to their expertise because you can now afford to pay for that. Equipment-wise, as far as test equipment and all that sort of stuff, you cut out the redundancy to the extent you would have if these systems were all scattered out. When it comes to supplying programming, many times you can then lean on microwave and you can, from a single source, cover a number of those systems without the duplication of the very expensive equipment that is needed to supply this programming. So then you're getting into the technical side and where you can save money there. I guess the first big advantage to it is the caliber of people that you can afford to put in there for administrative purposes and technical management.
FROKE: And you might also be able to negotiate a better per-subscriber rate with some of the program services.
MUNDY: Really that is generally done by numbers. In other words after we pass--as an example 10,000 of this or 50,000 of this--we go into another rate category so the clustering isn't necessarily impacted in that.
FROKE: It does not bring economies necessarily.
MUNDY: That's right because we can enjoy the economy as long as we have the accounts whether they're clustered or not.
FROKE: You talk now about regionalization and then earlier you had talked about the importance of local ... I'll add another word because you did not use it ... local involvement. How do you maintain the localization by keeping your hands on the local if at the same time you are moving in the direction of regionalization or clustering?
MUNDY: Okay. With our people even if you're clustered for the most part you still have a local office staff and the maintenance is out of it ...
FROKE: So there is a contact point.
MUNDY: Now that's one. The other one is we have always, and I in particular, have always tried to get certain of our people involved in local public service clubs and things like that. We like to see them in Lions Club, in Rotary, and so on and so forth. They've got to have local identification. The women perhaps with parent-teachers, whatever. But you've got to have local involvement. If they're an Elk or this or that, that's always helpful.
FROKE: So there's no contradiction built into regionalization as the strategies to maintain local touch.
MUNDY: It doesn't relieve your responsibility in any way, shape or form as a businessman for the local situation.
FROKE: A term that is coming up widely now is personal communications and there's a linkage with cellular telephone and some of those technologies. Where do you see Tele-Media in PC activity?
MUNDY: For the most part now it's talk although New York is getting prepared for it and some of the other areas. Our plants that we're now constructing will allow us to participate in that area if and when it's practical and the market is there to support it. We talk about all these things. Personal communications involve, in my opinion, the average busy person in the local environment. Beyond that I don't know. Now they say that this will even become usable in a large business office. I can guess where it might happen. We will have physical plants that will allow us to participate, that's all I can say.
FROKE: When and if it's the right thing to do in the local community.
MUNDY: That's right. We will have the transportation system for it.
FROKE: In some of the other innovative areas, you made reference to CARS systems. You've used that widely as a part of your initial clustering, am I right? (Community Antenna Relay Service/CARS)
MUNDY: Correct, very much so. My exposure to CARS, for instance, was right here in Happy Valley. Believe it or not, the first solid state CARS microwave system was installed right here in State College.
FROKE: The very first one?
MUNDY: Yes. We were about a week late getting it installed. We were trying to beat the rule changes so we could grandfather it. At the national educators convention this equipment was being demonstrated and it came directly from the convention and was installed here. The first leg of that was between Dale Summit and down at Lock Haven to bring in the stations from the east. The second leg of it went in between Dale Summit and up at the Tyrone VOR site. You fellows had a tower there for your educational TV network. We enhanced the Channel 6 signals on that leg. But that was solid state equipment and my first exposure. It went on from there. When we formed Tele-Media we used it every opportunity we could. The first time it couldn't be used was down in the Keys as I had mentioned to you earlier. And there we still used the CARS--Community Antenna Relay Service--concepts and rules but we were wavered in the common carrier frequencies that would perform in that environment.
FROKE: I understand that that was also a first in terms of going to the FCC to get a waiver.
MUNDY: The first one in the country and to my knowledge the only one. I haven't heard of any since.
FROKE: The CARS frequencies were set aside for interconnection purposes for cable only.
MUNDY: That's right. It started off at twelve and then they went down into ten as the spectrum filled up.
FROKE: And to use them for any other purpose requires some special attention by the FCC.
MUNDY: That's right. The common carrier in the Keys was in the four gigahertz region because of the very vicious temperature inversions which generate antenna decoupling that existed down there. Everybody told me it was impossible for it to be done and I finally blew my stack and said, "It's my money I'm spending and this is what I want done." I'm serious ... my attorneys, everybody. We started off by searching as to what frequencies were used and the four gigahertz band was the only one down there. AT&T had not reserved in any fashion the six gigahertz. So I said, "Let's go after it," and we got it. So that was one of the appealing things to TCI, by the way. So I was excited about that.
FROKE: In your many years of work in cable television, what are the two or three items that you would identify as those that brought you the greatest personal satisfaction and professional satisfaction? What are those things that stand out in your mind as above and beyond all of the other achievements, all of the other things that have happened?
MUNDY: Well, some of them go clear back into the R&D lab at C-COR. Some of the techniques we used there were applied to the cable industry. I was involved in developing some of their UHF amplifiers, some of their special octave bandwidth equipment.
FROKE: In C-COR, what you felt was the satisfaction of knowing that you were developing the technical means by which a new industry was being launched.
MUNDY: That's true and I was competing with others who were trying to do the same thing and that part of it was exciting. When I got out into regular full time raw cable, it was always gratifying to accomplish something that everybody said couldn't be done, either technically or legally. There were a number of those.
FROKE: The cable industry seems to have been loaded with that. Everybody was telling them they could not do it.
MUNDY: That's right. We constantly strived to show them to be wrong and that was a very exciting thing to me.
FROKE: You want to identify a couple specific ones ... the CARS example was one.
MUNDY: CARS is a good example. The other, of course, is the satellite system, modifying the equipment to discretely monitor downlink channels in the four gigahertz environment all around you. Back to CARS again, we were one of the first ones to use subcarriers on CARS for data transmission. We had used it here for bringing in remote FM stations in the music business. There's so much. I was involved, too, as coaxial cable came along. It seemed like we were constantly developing new cables and then we would find ourselves with no hardware to fit the cables.
I had done a lot of research work at Centre Video and also Tele-Media in connectors, in the hardware in the cable itself early on. That was a thing that was always changing until we got up into the phone-type cables, the low-loss cables, the air-dielectric cables. It seemed like every time a guy would come in and he'd have a real hot cable, we asked him, "Where do we get the hardware for it?" His jaw would drop because it wasn't available.
I did have another interesting project. I worked with Amp Corporation as a consultant. They were testing their connectors to meet specs on a CW basis, a discrete frequency basis, and they wanted to use sweep technology. Their engineers came into my lab and then I was down there. They finally got the sweep technology approved for government orders on connectors. Then we got into some of the converter businesses. First we had the programmables and then we finally got into the addressables and the applied. The programmables never got me too excited or we didn't do anything special but when we got into addressability we did have some techniques that were firsts. The Lake Erie situation used data transmission. They literally told me in a meeting in Philadelphia that they thought I was crazy, this wouldn't work. But it did work.
Early on, antenna sites were my love and the antenna work. We had the log periodics come out. Well that was supposed to be God's gift to all the problems in the world but it wasn't. If you were really in a co-channel problem you still had to go back to good old yagi antennas and come up with the structures to accommodate them. Kane, Pennsylvania, is one. It's sitting right smack in the middle of Buffalo and Pittsburgh. They both have Channel 4 that you want to look at. When I couldn't get Scientific Atlanta to guarantee the reception there then I went back to a gentleman over at HRB local again and we worked together to come up with the arrays that would allow us to do the job and it was done.
FROKE: To bring in co-channels.
MUNDY: To eliminate the co-channel interference and up there we had Buffalo interfering with Pittsburgh; Pittsburgh interfering with Buffalo. Then we always had a mix of Michigan stations coming in. This involved Channel 6 - Johnstown and the Pittsburgh area, too. That was a big co-channel problem. But we've had good pictures.
FROKE: Our Channel 3 at the University is a drop-in channel with a minimum separation of Cleveland and Philadelphia and Harrisonburg and Syracuse. So when you say co-channel, I know exactly what you mean.
MUNDY: Right. We finally brought Channel 3 over and put it on the local system, interference free, right from the studio. Of course, electrical interference was one of our big problems on that channel. It wasn't co-channel in our case. But, it was very interesting.
FROKE: We talked about those things that gave you satisfaction, both personally and professionally. What are the two or three things that caused you the biggest disappointments? What would you do differently if you had it to do over again, would be another way of phrasing the question. What are the opportunities that were missed that you felt strongly about?
MUNDY: Well, of course, we went into the standardization. That's been a constant fight of mine and it's probably one of the greatest disappointments because I saw all of this revenue slipping away from us merely because people were being hardheaded about the thing when, in fact, they had the physical plant, they had the technology to do it. That was always a disappointment for me. I guess the other thing ...
FROKE: If the cable industry had moved earlier in terms of standardization some of the ...
MUNDY: You'd have a different picture right now. You'd have an entirely different picture now.
End of Tape 3, Side B
FROKE: Being late on standardization opened the doors, as you were saying, for competitors to make it a little bit more difficult for you on the long haul.
MUNDY: That's right. It gave them all kinds of time to look at the situation and actually poise themselves to become involved. We could have had all that business. Years ago I attended a seminar in New Jersey with Hartenraft of Centre Oil and Gas Company. I went down to one of their computer seminars. At that time oil companies were monitoring heat degree days--how many degrees of heat do we have for this and that. As a result, that year was the year that we had the fuels cut back and the President asked everybody to turn their thermostats back. Well, between the two things, it completely upset the fuel oil industry and they were making all sorts of nonprofitable deliveries where they'd run a truck twenty miles or so out to a customer to put in one hundred gallons of fuel oil when they should have been putting in five hundred.
We could have had all that business, and that was a classic example. I sat in that room and listened to this and listened to the distributors from the East Coast telling of their plight. So that was a big disappointment.
Another thing, I think at one time I had organized an excellent training program--technical training program. I had worked with your people on your first effort along these lines. But somewhere along the line in our industry we've let that slide. We've evidently expanded right around that part of our endeavor. At the present time, in my opinion, we're not doing a good job. We have an acute shortage of technically qualified people and that's been a disappointment and I've tried repeatedly to crank up and come to grips with it. We're doing it again along the lines that I did it before. That's where we have come back to repairing a lot of our own equipment rather than sending it out to contractors. By doing that we develop a laboratory facility that we can rotate technicians through and put them down on the bench here and let them really get the feel of things. That's part of the training but a very important one. So I guess that was a big disappointment. But beyond that most of its been very enjoyable and rewarding.
FROKE: I hope over a period of time that the National Cable Television Center and Museum through its activities under the rubric of the Center might begin to pick up some of those things that you're talking about. It could become a catalyst for education and training in the industry.
MUNDY: Yes it could and should because certainly you have all the academic tools to do it, even the mechanical facilities to do it. You know it's surprising ... that brings a point out. I had a shocker two or three weeks ago. I was in conversation with a group of fellows and around the table happened to be a telephone man--an oldtimer--and he was explaining to another guy how some of the stuff worked. I honestly don't think that he knew the difference between a transformer and a rectifier. I really believe that and he worked in the telephone industry all his life. That's another reason why I'm not afraid of telephone competition. When the telephone company had leaseback plants, the majority had contracts with the local cable company to maintain their leaseback plants; they didn't have personnel to do it. So they've got a training problem, too. Now maybe their fellows in their switch centers and so forth are highly qualified technically but certainly the bulk of the people aren't.
FROKE: Well, let's go into a discussion of the potential competition between the telephone companies and the cable industry. The federal government certainly is opening the door for that competition to intensify. At the regulatory level, the court system now has also opened the door with Judge Green's decision being set aside. You don't fear their competition for one reason that you've just given and that is that they are also trailing in this whole matter of education and training, particularly at the local level. And another one I think you were beginning to get at when we were talking about fiber, is the application of fiber.
MUNDY: Well that's true. Now the telephone company is preparing themselves for this there's no question about that. In the latest issue of Cable World, there's a classic article from the headhunter organizations. Those are organizations if you want to fill a vacancy in your staff you let them know about it and they search for it. Several of them are telling us how the phone company is making inquiries and they're beginning to pull some key people out of the cable business into their business. The magazine explains some of the difficulties that they are having in that here comes a guy from the cable business, he's generally a fast mover, nobody tells him what kind of suit to put on, and they put him over here in the phone environment and then you have the prejudice of the oldtimers in the phone environment for this new guy that's just landed.
Nonetheless, there's going to be lots of problems. I don't mean to imply that the phone company isn't a problem, I don't mean to imply that. But I think that we have all sorts of opportunity to counteract a lot of it and certainly perform in parallel to them. I don't know how long it will take or what form it will take. I really think it's going to be a merging process to a degree.
FROKE: The major advantage that the cable systems have from the things I have read or the conclusions I have reached from the things I have read, is the connection directly into the home that cable now has for video.
MUNDY: That's right.
FROKE: And that's something that the telephone people don't have.
MUNDY: Correct and the only way they can get in there now is slow scan. They call that Phone-A-Vision or whatever the hell it is. Christ, we do that in the ham radio shack and there's no thrill in that. That's a bunch of still portraits. Until they either go coax ... and I don't see them going fiber, they're going to have problems there.
FROKE: And either one is a major capital investment.
MUNDY: To them, yes. They've got all this twisted pair. Now they say that they have technology with sampling techniques that is close to being utilized on the twisted pair to give them pictures of reasonable resolution. That is the talk in their journals now that they're going to use compression, high frequency sampling. I don't know how the hell they're going to high frequency sample on a twisted pair. Anyway, I don't see it but they say they're going to do it. So when they say they're going to do it, you better watch it.
FROKE: You began to talk about the possibility of some kind of a hybrid system evolving over a period of time with the telephone people doing something and cable people doing something. Working perhaps side by side. Do you want to elaborate on that a little bit?
MUNDY: Well, I think economics is going to force that.
FROKE: How might it work in the case of Tele-Media if that principle were applied to Tele-Media? How might it work?
MUNDY: Well, I think it would work probably no differently than if we lease certain portions of the spectrum to somebody. Or as we now ... we lease space in their ducts. I don't see it any more complicated than that.
FROKE: So you would negotiate service from them and they would negotiate service from you.
MUNDY: I think that would probably be the situation, right. And one would compromise the other and consequently bring about an economic ceiling that would be realistic for our subscribers in both cases.
FROKE: You probably know Dick Loftus and Bob Brooks in the cable business. They now have formed a new company that will attempt to do some of the types of things that you are talking about. They're describing it as a brokering service. Trying to bring in the appropriate locations--the telephone interests and the cable interests together--rather than have them go into some kind of a head-on confrontation that would be destructive to both of them. They have set up their shop in St. Louis and I would imagine will begin publicizing and promoting it shortly.
MUNDY: I think that's going to be early on, I really do, because it's ridiculous to run a whole bundle of cables into somebody's home when you can come in on one cable and do it all. That one cable certainly can be shared by several entities. It doesn't have to be one individual. And unless we keep our mind open to that we're going to punch a hole in the hull somewhere along the line and somebody's going to sink. We've got to open our mind to that sort of thing.
FROKE: Where do you think television broadcasting is going to be down the line? If you were an investor, would you put money into television broadcasting?
MUNDY: That's a hard question.
FROKE: That's not a nice question either.
MUNDY: No. I wish I could step around that one.
FROKE: Radio broadcasting ... you've already made the commitment. You said it's going to be around for a long time.
MUNDY: And I have a lot of faith in radio broadcasting. I really have a lot of confidence in it. But all of these entities that we talk about--television, radio--first of all we've got to talk about what service is competing with them as far as the evolution in the media. Then we've got to talk about how they're supported and where their support comes from. I've always said every market only has so much money to spend. You can only fragment it so far and then those persons participating in that communication can no longer afford to be there. That appears to be what's happening to the television stations now to a degree. Well, it's not to a degree--their viewing is down. In some cases they're only getting 50 percent of the market where at one time they had 98 percent of the market.
FROKE: And there's some rather dramatic forecasts about fatalities among television broadcasting stations in the years ahead.
MUNDY: That's right. We've already experienced the UHF market and the percentage of those stations that went dark in that market. It's going to be a rough one. If they were smart they'd take their nickels and they'd somehow get involved in the whole evolution to satellite services and use their service in cooperation with somebody else to keep the local feel. That local feel has got to be. So somebody is going to pick that up and carry it on, whether it's the local TV station or what but they're going to do it. It takes a lot of money to support a TV station. The other media now through satellite are going to directly compete with that television station particularly on its national advertising which is a big buck with them. So, I don't know. I'll still put my money in radio.
FROKE: Speaking locally, TCI State College-Bellefonte has an arrangement with the Altoona television station for insertion of local news from State College to ... or it's Johnstown, I guess it is.
MUNDY: Yes, Johnstown.
FROKE: Do you see cooperative arrangements such as that prolonging the life of the television broadcast station?
MUNDY: Certainly it will supplement it. If some deal of that type can be done, it enhances both the cable system and the broadcaster and that's the type of thing that's going to have to happen.
FROKE: The television broadcast stations take up a substantial amount of spectrum space that you talked about. Spectrum space is at a priority and distribution capability, through cable television ...
MUNDY: Is a whole new spectrum. But I think you're going to see the broadcast spectrum begin to shrink, They've already taken some of the UHF spectrum and put it into public service communications. You're going to see this dwindle in my opinion. I don't see the VHF spectrum for television coming down. If anything, it may widen a bit as we get into high-definition television and depending on the success of the compressibility programs that they're going through. Not only the success technically but the cost.
FROKE: On a categorization basis, the independents and the UHFs would be the most vulnerable.
MUNDY: I would think so. Now independents, if he were in the right portion of the frequency spectrum, he should survive. But I still think the UHF stations are in jeopardy.
FROKE: The newspaper field ... Knight-Ridder, a number of years ago, put a substantial amount of money into the idea of the electronic newspaper. Cable television, back in the '70s, was also talking a lot about the electronic newspaper. Do you see them also being vulnerable? Knight-Ridder folded their operation, by the way, down in Miami--Dade County. They couldn't get it to go.
MUNDY: Well, we've had requests along these lines. Go back to Ashtabula, Ohio, and look at that--the Star Beacon which was a big newspaper chain along the lake front--had this in mind. We had meetings discussing it. The local radio station up there, a very aggressive group, had in mind doing this sort of thing from their studio facilities there. They formerly had had a UHF station that went dark so they had the background. The news-type situations at the present time are not too successful because if they are computer-based they are tying up expensive computers in the home for that one purpose and that's not too practical. It's got to come over the boob tube. So it's a ways off. We have services. I can go home this afternoon at my computer and get my financial data and I can get all the news in the world I want from specific publications.
FROKE: But you still pick up the Centre Daily Times and read it in the morning?
MUNDY: Yes sir. I look forward to it. I'm glad it's now a morning paper. What the hell, at five o'clock it's old news.
FROKE: Advertising revenues for newspapers are declining and readership, generally, is declining. But you don't have the same dire forecast for newspapers as for the UHF television broadcast stations?
MUNDY: My dad taught me something when he was trying to convince me to become involved in the publication or newspaper business. He said, "Always remember, when times get tough they can find a nickel or a dime to buy a newspaper to look for a job." That makes a lot of sense. As a kid he pounded that into me. You can always find a few cents to buy a newspaper to look for a job. And that goes back to local again not national.
FROKE: Magazines probably have made their adjustment to all of this audio video competition that is around. The general circulation magazine for all practical purposes has disappeared with the exception of the Readers Digest and a few others that you can count on less than the fingers of one hand. Specialization has taken them forward--a magazine for almost every possible interest.
MUNDY: The same thing that we've done in radio. We key an audience that we want and we make the format to appeal to that audience and we capture it.
FROKE: And in a sense what you're doing is a publisher of cable programming services. Where eventually you'll have even more than fifty-four channels. Manhattan opened with one hundred channels if I remember correctly.
MUNDY: Years ago, Malone and I were having lunch together and we were on the subject of fifty channels, thirty channels, twenty channels. Of course his attitude has changed from that time but I guess the consensus at that meeting was what the hell do you want all these channels for because the people aren't going to view them anyway. They're not going to have time to view them. But that has proven not to be the case.
FROKE: People are finding certain program channels that are of special interest to them and while the audiences are not as large as say the old audiences at CBS, NBC and so on, they're financially viable.
MUNDY: I guess prime time doesn't have the significance that it had one day.
FROKE: No, no.
MUNDY: Therein lies a lot of this. They say they only have a certain percentage of prime time viewing. But their prime time doesn't have the significance that it once had. For example, the Weather Channel--one of the most viewed channels in the country. Of course, I get mad at them, they're really killing us with advertising. I watched Channel 10 news last night. There was one skit in there, I almost went to sleep with the number of ads--one right after the other. They're going nuts.
FROKE: Part of this is because the unit payment on the advertisement is lower than it used to be.
MUNDY: Well, that's true. But our people will only put up with that crap so long. They'll shut that station off--after they get the most important part of the news that they're interested in--they'll shut them off and go to a satellite channel.
FROKE: Have you joined any of the other cable operators in visiting other countries to see about international activities?
MUNDY: We have done some work in that. We've looked at the European market. In fact, we were going to send some people over there and then when this economic crunch came along ... Australia was another place that was of interest and we actually went so far as to learn how their franchising was handled. We find that in that case you go over there and help put a whole package together for the franchise. But the fact that you come there and work with them technically and every other way doesn't give you any priority in the selection of the franchisee. So there's pluses and minuses.
Ireland is another place that the cable is really going through. We know a chap over there that's very active in that. Yes, we have looked at that market but we didn't get on an airplane and go over and look at it. We've been looking at it through the eyes of our brokers and the media.
FROKE: You probably would have to enter into some kind of a partnership with an organization or individual in another country in order to resolve some of the legal issues.
MUNDY: Oh, I have no doubt about that. The same way that early on in the cable business we did the same thing in this country. Where maybe the local guy was the guy that was the principal in acquiring a franchise wound up with a piece of the action. It wasn't the sale of the franchise. He wound up with a piece of the action of the company.
FROKE: So there was some outside financial interest or outside stimulant to get the franchise process moving, but you had to have a local person to really know what was going on in the community.
MUNDY: That's right. Now that the communities have formed their own organizations and they are communicating among themselves to a degree, that practice is no longer necessary. They trust their own personal knowledge to be able to pursue this whereas earlier maybe this local guy was an engineer or for some reason had acquired some basic knowledge or whatever. They put their trust in him rather than what they have now with their own organizations.
FROKE: Ev, we've talked for five to six hours in these conversations. I've come away with a feeling that you are generally very optimistic about the future of cable television.
MUNDY: I have no problem with the future of cable television. It's not going to be easy. It has no time for pity parties. You've got to put forth the effort. You have to make the investment to know what's going on. You're going to have certain organizations within your area that you'll have to support, such as we now support CableLabs. There's most certainly going to be lobbying organizations that we're going to have to support more directly in order to survive. This in my opinion. Our NCTA I think is involved in too many other activities. I envision NCTA should almost be an exclusive lobbying organization. Let somebody else worry about national conventions and all that kind of stuff. We have CableLabs for technical participation now. CableLabs gets far more input from the operators and what their needs are than what NCTA does. So I have a certain amount of criticism of NCTA. I think over the years there's certain things that they've given away--given away. But yes, the cable industry is going to survive but they're going to have to cooperate with one another, communicate with one another very closely, and there's going to have to be mass efforts to accomplish what we want to do. Not Mr. Individual. I have no problem with keeping my investment in cable if that's the question to be answered. I have no problem with that.
FROKE: A second observation that would come out of the conversation is the organizational principles that you have been abiding by since the very beginning of Tele-Media. You have set a course that's been constant and you've really not modified or changed that course. A few minor ripples, a few minor changes. I would guess that you value highly continuity through the years.
MUNDY: Oh my, yes.
FROKE: From the point of view of personnel, from the point of view of business strategies. Continuity is something that is extremely significant as a organizational principle for you.
MUNDY: Certainly. And it has been with Bob, too. I guess the greatest thing, at least as far as I'm concerned, is back to the partnership of Tudek and Mundy. Here's two guys that are pretty much opposites. He is, at least early on, he was the business man; I was the technical man. Those two individuals don't necessarily look at the same thing in the same way. Yet we trusted each other exclusively and that's the secret to the partnership. You have to have absolute trust. And when you get pushed up against the wall, if the other guy isn't available, you've got to have the trust in one another that you make the decision, that's it. You don't look over your shoulder, even if it's a bad one, and be critical or what have you. You learn your lesson from it and your partnership will be successful. I've learned a tremendous amount from this man over the years. I guess that's all I can say there. Continuity is important. Another thing: our people can't forget about the guy that ten years ago when they had their butt in a crack helped them. So now the guy comes down the street and he's selling something. Let's liken it to the salesman for a reputable company. I can remember when we didn't have enough money in C-COR for certain test equipment. From my connections with the various vendors when I was back at the University working with the General State Authority putting these contracts out, I'd pick up the phone and say, "Hey, I need a piece of test equipment and I've got to borrow it. I can't pay it. How 'bout it?" I'd get it. They'd say, "Where do you want it delivered?" Years later, when I can afford to buy this stuff, I'm buying from those guys. That's back to continuity. I can remember one project when I needed test equipment. I didn't have the money to buy the test equipment. I had a government contract. A couple of phone calls and when I arrived at the project the test equipment was sitting there in shipping cartons waiting for me to go to work. That's continuity. And now it goes right back into your own people. You've got to remember what these people have done over and above, and where they've sacrificed in the lean times. When better things come along and they're a little better, you've got to take care of those people.
FROKE: And it's also friendships.
MUNDY: Friendships, yes. And the word friendship has definitions ... a million of them. One thing I've never done in industry is overfraternize with my people. I never did do too much of that. I go out occasionally and have dinner with them or a couple of beers or what have you ... but we don't attend the church socials together and all that stuff. There would be too much of that. But the friendship, the help ... when the light comes on and somebody needs it, if I have it and they need it, they can have it. That's the part of the friendship that's important.
FROKE: Ev, thank you very, very much for the time. And as you reflect on the conversations that we've had and identify additional things that you might want to talk about, just give me a telephone call and I'd be happy to come out with a tape recorder and sit down again.
MUNDY: Well, I'm very appreciative that you took this history, because I'm comfortable with you. One thing that bothered me all along, I was wondering who was going to take this history and how it was going to go. As I told you early on, I'm coming off the wall. I didn't make any particular preparation.
FROKE: These are exactly the types of things that we like to talk about. Thank you very much.
MUNDY: And thank you. I appreciate it.
End of Tape 4, Side A