James P. Mooney III
Interview Location: Seattle, WA
Interviewer: Paul Maxwell
Interview date: December 11, 2002
Collection: Hauser Collection
MAXWELL: Hi, I'm Paul Maxwell and I'm here for The Cable Center. These are the oral history interviews sponsored by Gus Hauser and the Hauser Foundation to provide a history of cable television. Today we're talking to James P. Mooney – it is James P. Mooney, isn't it? If I remember right?
MOONEY: Yeah, um-hum.
MAXWELL: And we're going to kind of take this through chronologically, your time in the cable industry and your impact or its impact on you, whichever we figure out. Let's start in sort of the beginning. You told me that you grew up in Rhode Island and went to the University of Rhode Island.
MOONEY: Before we start that, I didn't know Gus funded this, and he's a great guy and a friend of mine, and I'm very pleased to be able to be part of a Gus project.
MAXWELL: He provided the funding that started the whole videotaping of the oral histories, and it's actually a kick and we have a pretty good library of it now. So I do some of these, a whole lot of other people do a bunch of them too, but it is nice that Gus did it. Good.
MOONEY: It is nice that Gus did it.
MAXWELL: It's some giving back to the industry, and God knows he did okay in it and he contributed a lot.
MOONEY: Well, I was born in Fall River, Massachusetts, which is one of the old New England mill towns, never really got over the Great Depression. I think when I was a kid 15-20% unemployment was pretty standard around there. I recall even one of my youngest childhood memories, one of my earliest childhood memories was of these huge dray horses pulling carts up the street, and on the carts were loaded the looms from the mills, were being taken to the railroad station to be shipped down to North and South Carolina. Southern Massachusetts, southern New England really never, I don't think even to this day, has gotten over the economic impact of the loss of the cotton cloth business. So, anyway, where I grew up, the whole notion of economic boom and high times that characterized much of the country in the 1950s was just nonexistent. Everything was always sort of economically depressed, and I think as a teenager and then as a young man, I was almost surprised to find out that the rest of the country didn't share all of those problems on a permanent basis. Anyway, I spent most of my years growing up in Tiverton, Rhode Island, which is right next to Fall River but across the Rhode Island border. Tiverton is an old New England community. When I lived there, it still included a lot of agricultural activity, principally dairy farming, but the principle industry was probably fishing – mostly lobster fishing and other shelled creature fishing: cohogs, clams, scallops and so forth, and then there were parts of the village in Tiverton that were entirely given over to these docks where the fishermen would bring over their catch. So I grew up pretty much on the water in this little town which I recognize now was an almost idyllic New England small town existence, but of course then it seemed quite ordinary and boring, even, to me.
MAXWELL: So then you went to college in Rhode Island.
MOONEY: I went to the University of Rhode Island in Kingston.
MAXWELL: And studied?
MOONEY: History, I was a history major, really changed a lot there. I was awakened to all sorts of things.
MAXWELL: Wider horizons?
MOONEY: Well, not only to wider horizons, but to the life of the mind and to the excitement that can go with learning and becoming aware, if only somewhat dimly aware, that there was a whole world out there.
MAXWELL: So what were you going to do when you got out of college? What was your goal?
MOONEY: My goal, every since I was about twelve years old, was to go to law school and get a legal education, but not to practice law, to go help run the government because at that time public service and politics were still regarded as worthwhile and a noble profession.
MAXWELL: So when did you get your BA?
MOONEY: In 1965.
MOONEY: Yeah, and then the JD from NYU three years later.
MAXWELL: So in '68 you entered the world. That's when I got back from Vietnam.
MOONEY: Happily for me, I was not called to serve, something about which I still feel some guilt.
MAXWELL: I wouldn't.
MOONEY: Yeah, well, I think that's the voice of experience teaching. The only thing that I have is the voice in the back of the mind.
MAXWELL: So you get out of law school and you were in New York.
MAXWELL: What happened next?
MOONEY: Went to Washington.
MAXWELL: To fix the government?
MOONEY: No, but to help run the government. My naiveté was extraordinary. I think I just thought that all I had to do was pack up my Volkswagen with all my stuff, and all my stuff at that time still fit in the Volkswagen.
MAXWELL: And those were Beetles in those days.
MOONEY: Those were Beetles, right, and go to Washington and I would be welcomed and immediately set to work at some high policy shop. Well, after banging around on the streets for a while, visiting various federal agencies and trying to penetrate the civil service system, I finally wound up with a job at the Equal Employment Opportunity Commission as a Congressional relations guy. To show you how naïve they were, I convinced them that I knew something about Congress, and how that could be the case given the fact that I had spent my entire life in school and had just arrived in Washington, took what must have been a leap of faith on their part, or at least maybe they just couldn't get anybody better. So anyhow, I got a job at the EEOC and I worked there for about two years as their Congressional liaison, and then finally landed a job on the Hill working for John Bratamus, Democrat of Indiana, who was at that time regarded as one of the rising stars of the Democratic Party, and so he turned out to be.
MAXWELL: And his district was where?
MOONEY: He had the third district of Indiana, which centered around Southbend – Southbend, Elkhart and La Porte.
MAXWELL: Hired only Irishmen or what?
MAXWELL: Did he only hire Irishmen?
MOONEY: No! Oh, no, no, no, no, no. As a matter of fact, there are very few Irishmen out there that I've seen. Southbend is the land of the Polish.
MAXWELL: I know, it's a joke. Right, I know.
MOONEY: And he was a Greek. But I was hired to be one of his legislative assistants, and at the end of a year as LA, his administrative assistant, which then was the title given to the chief of staff, in the office left, and I was fortunate enough to get that job, and then five years after that when he became the Majority Whip I was fortunate enough to go with him as chief of staff in the Whip's office, which was a great opportunity for me, to put it mildly.
MAXWELL: This is the early '70s now?
MOONEY: We're talking '71 to '76, yeah. He became the Whip at the end of '76 for the Congress that began in January 1977.
MAXWELL: '72 was a Democratic...?
MOONEY: '72 was a Democratic, a decent Democratic Congressional year in the face of a very strong tide running for Nixon in the presidential race against George McGovern.
MAXWELL: Actually, that's when my father-in-law was elected.
MOONEY: Really? From where?
MAXWELL: Colorado. Floyd Haskell.
MOONEY: Is that right? Yeah, I remember him. We withstood that one pretty well.
MAXWELL: And that was Wirth's second term, I think.
MOONEY: No. Tim Wirth was elected to the House in '74.
MAXWELL: '74, that was two years later. That's right.
MOONEY: I remember helping in his first campaign, particularly with the teachers in Jefferson County, Colorado because Bratamus was a leader in education legislation and had an interest, as then a deputy Whip in helping the party improve its numbers in the House, and Wirth was one of our guys, and he won that election nicely and stayed in the House for...
MAXWELL: Six years, I think.
MOONEY: Was it six? I thought it was eight.
MAXWELL: Yeah, because Armstrong beat my father-in-law in '78, and he won two years later.
MOONEY: Eight years. Eight years in the House.
MAXWELL: Eight years, yeah, eight years in the House, you're right. It was interesting times then.
MOONEY: Those were interesting times.
MAXWELL: You were in that position, I think, when you were recruited into the cable business, right?
MOONEY: That's right, which would have been at the end of 1980.
MAXWELL: So you had eight years or so...
MOONEY: Four in the Whip's office, ten years on the Hill.
MAXWELL: And in '80, when you got recruited to the cable business, what was the lure there?
MOONEY: Well, we had been caught in the Reagan landslide. Carter was defeated by Reagan, the Democrats had lost the Senate that year to the Republicans, and a number of House members, Democratic members of the House, including Bratamus, had lost their seats, so he was out. I could have stayed. A lot of what I had done as a staff person over the preceding four years had involved working directly for the Speaker, who was then Tip O'Neill. I was pretty much the leadership's vote counter, and he offered me a place on his staff, but he at the same time suggested that I not take it. He said, "You know, a guy in your position only has so many chances to get out of here." He said, "You've got a chance to get out of here now, and if you don't take it you will probably still be here 20 years from now, and you'll be bitter because you'd never been your own guy. You would always have been somebody else's guy."
MAXWELL: Good advice.
MOONEY: Which I thought was very shrewd and very good advice.
MAXWELL: He was truly a shrewd man.
MOONEY: He was a very shrewd man. He projected an image of everybody's grandfather, but Tip was not everybody's grandfather. He was a very shrewd and very tough Irish politician, who also, I might add, was very loyal to the people who worked for him. Anyway, this was not a great time to look for a job if you're a Democrat because the whole Carter administration was on the street, the Democratic staffs from the Senate were on the street, and there were more Democrats running around looking to be picked up then there were people willing to do so, and I heard just by chance from a guy who worked on our staff that the cable guys were looking for somebody. My first question was, "Who are the cable guys? Who are they?" A sidebar – I recall the first time I ever heard of cable was in the early '70s. I was out in Southbend, doing some work out in Southbend, and I was staying with some friends out there and it was early evening and we were watching the news, the early evening newscast and they were watching the Chicago stations. Now, Chicago's about 100 miles from Southbend, and I said, "How do you get such great reception on the Chicago stations here?" And they said, "Well, we get it over the cable." "What's the cable?" And they told me how there was this big antenna outside of town and that there was a trunk line that ran into town and then all the wires spread out, and I said, "What?! They run a wire to everybody's house? Can this be?" And yes it could. I must say the intervening years between then and when I found out that the cable guys were looking for somebody, I hadn't learned a hell of a lot more, except that the cable guys were doing some interesting things, and that was sort of in the middle of one of the first super hype campaigns of the wired home.
MAXWELL: Oh, that's right. Ralph Lee, what was his name? Wired Nation was about right then.
MOONEY: Right, and what was the thing Warner Amex had?
MAXWELL: Qube, in Columbus.
MOONEY: Qube, yeah, in Columbus, yeah. So anyway, I figured I'd go and sound out the cable guys and see if they had anything that was interesting to me and whether I was interesting to them. If you're on the Hill, you think logistically in terms of the Hill and who knows who, so my first thought was well, who's got jurisdiction over these guys, and it was Commerce, and Tim Wirth was on the sub-committee, and I knew Tim and so I went to see Tim. I said, "I hear the cable guys," whoever they are, "are looking for somebody." And he said, "Oh, yeah, they are. I'll get you an interview." In about a week or so, they called me and I went down and I talked to Bob Ross...
MAXWELL: So that's who interviewed you first?
MOONEY: Yeah, it was Bob Ross, and it immediately became clear to me the I was getting this interview as a courtesy to Tim, but that they had decided to hire another guy, and as a matter of fact, Wheeler was going to have lunch with the guy that day and hire him. This was like a 10:30 AM appointment. So, anyway, we're doing this courtesy interview and it was very interesting. I thought, this could be a job worth having. So I said self, think fast, talk fast, and I thought fast, talked fast, and by God, Ross was in Wheeler's office at quarter past 11:00 and said, "I think we ought to rethink this."
MOONEY: Yeah. And I went in and I talked to Wheeler and I had this resume with a list of references on it, and it was a pretty damn good list, if I do say so myself, but I don't remember which one of them said, "Are you saying that if we call these people they'll know who you are?"
MAXWELL: Well, that sounds like Tom, actually.
MOONEY: And I said, "Yeah." I don't know what he did. This guy they were going to hire was on some Senator's staff and they apparently promised the Senator, I'm not going to say who it was, that they were going to do it. In any event, they didn't, and hired me instead, and thus was my entry into the wonderful world of cable.
MAXWELL: So when you got there, what did you think?
MOONEY: This was a mistake. Because I guess I had been so hyped up from my interview that I hadn't noticed how crappy the offices were. I mean, they were really bad. The furniture was literally falling apart.
MAXWELL: Yeah, they were still across the street from the Sheraton?
MOONEY: They were still on 16th Street, across from the Sheraton. The building was condemned, by the way, after NCTA moved out of it, and they had a lot of problems.
MAXWELL: I'll say!
MOONEY: I went to work on January 2nd, and I had been to the White House staff Christmas party just before Christmas and there were a couple hundred people there and in the room there were two people who had a job, me and another guy, so whether or not this was a mistake...
MAXWELL: You were still pretty happy about it.
MOONEY: I was still pretty happy about it and said, well, we'll give it a go. They had explained to me pretty carefully what it was they were looking for. They said that they had a problem being legitimized and they had this big problem with the cities, operating in a kind of policy vacuum, had exercised some vague authority given to them by the FCC to issue cable franchises but done so in a way that was extortionist and really had the potential for killing the business in its cradle.
MAXWELL: Of course did they explain to you they were quite responsible for the extortionist nature competing from the franchise side?
MOONEY: No, I didn't find that out 'til later, that these were, to say the least, willing victims.
MAXWELL: Right. Very much so.
MOONEY: They wanted a federal statute legitimizing them and setting up the ground rules, and I said, well, that's sort of my business to help with stuff like that. I got there and I began to learn more about the business and learn more about the political landscape in which they operated, and remember too, after I'd taken the job but before I started having a conversation with John Dingle, who didn't think much of them at all...
MAXWELL: He was a Congressman from Michigan?
MOONEY: Yeah, he was from Michigan.
MAXWELL: And was head of the Commerce Committee, or Judiciary Committee?
MOONEY: He later became Chairman of the Commerce Committee, but at that time had not quite ascended to the top, but was a senior member of the Commerce Committee and most of what he knew about cable he knew from the franchise wars in Michigan where there had been a couple of very highly publicized indictments of local officials who had solicited bribes from the cable companies seeking to gain the franchises within their jurisdiction, and John was somewhat of the opinion that this was a shady bunch and had cautioned me about it. But anyway, it didn't take me long to figure out that the regulatory problems they had with the cities was a lot more complicated than appeared on the face of it, that they had an image problem that was somewhat related to that, but also had begun to take on some distinct independent life of its own and that that needed to be cured if they were going to get anywhere on the other count. And further, that they had this terrific rub with some of the most influential lobbyists in town with the movie guys, the broadcasters and the sports guys over a thing called copyright. Whether the 1976 Copyright Act had in fact set up a fair system of copyright, of compensation to the copyright owners, or whether in the words of Jack Valenti it was merely a pittance and amounted to highway robbery and so on and so forth. That was an issue that was heating up very rapidly in the first couple of months that I was there.
MAXWELL: Well, that's just as some of the early growth of start-up cable networks was happening, too.
MOONEY: Yes, that's right.
MAXWELL: Which exacerbated that aspect. The early '80s were an explosion of new networks, actually.
MOONEY: They were an explosion of new networks without programming.
MAXWELL: Right, but it worked.
MOONEY: Yeah, it worked. To the credit of the people who ran the companies that backed cable programming networks they hung in there long enough...
MAXWELL: To succeed.
MOONEY: ...to become something until we reached a point where three nights ago an HBO program outdrew all three of the traditional broadcast networks combined, even though it was only in a third of the homes in their universe.
MAXWELL: A startling change from those early days.
MOONEY: One hell of a change!
MAXWELL: I'll say! It was 1980 when you got there...
MOONEY: 1981. January 2, 1981.
MAXWELL: CNN started that summer. WTCG, which it was called, that's TBS now, was on the satellite already, HBO was on the satellite, Showtime hadn't yet gone on satellite in 1980...
MOONEY: Yeah, Showtime was up, actually they were just up.
MAXWELL: It must have been right then...
MOONEY: I think it was right about then.
MAXWELL: ...because it seems to me they did a lot of...
MOONEY: It might have been in March.
MAXWELL: That might be right. The other channels that had started included Nickelodeon and MTV, by then. Well, MTV started that year. They went on the air – gosh, I can't remember the date. It seems like it was that spring too, because that's when a lot of...
MOONEY: Louise (Mooney) would know. She represented them.
MAXWELL: Yeah. I started Multichannel News that year, that September, and that took off pretty quickly. So when you got there, talk about the enemies cable had. And enemy might not be the right word.
MOONEY: Put it this way, it wasn't clear at that point whether the cities were the industry's enemy although that might have been only because of the absence of open warfare having been declared. They were certainly bent on extorting as much as they could from the operators...
MAXWELL: That's quite true.
MOONEY: ...and the operators were desperate to get these franchises, but at the same time were also agitating for regulations at the FCC, which would free them up and reform their process for them, and the cities were annoyed that the operators were doing that because the cities thought that this was a God given right of theirs to do what they wanted to do, and so I think that relationship was, to put it mildly, tense. Openly antagonistic, I think, were the baseball guys, the movie guys and the broadcasters.
MAXWELL: That's because of Turner and the Braves, right?
MOONEY: Turner and the Braves, and by then WGN was being distributed out in the Midwest. One of the Washington D.C. stations was being carried on microwave belts down the East Coast to the South, and I think that the New York station...
MOONEY: Right, was being redistributed and retransmitted in the Northwest, again, mostly by microwave.
MAXWELL: That's right. Eastern Microwave was the company. That was the Newhouses.
MOONEY: I think the broadcasters were beginning to wake up to the fact that this could be more than an irritant to them and indeed at some point could constitute serious competition. The baseball guys were wide awake to the fact that this posed the threat of breaking up this nice...
MAXWELL: Sure, it was market poaching.
MOONEY: ...monopoly they had with each team having its assigned market out of which the others would stay. And the movie guys, of course, were upset because they thought it diminished the value of their film packages, not to mention the TV part of their business where they would sell exclusive rights to this or that TV station in this or that market. The antagonism of the broadcasters, movie guys, sports guys, was pretty apparent. The precise nature of the dispute was a little bit harder to figure out. It of course centered around the Copyright Act of 1976 and there had been a couple of Supreme Court decisions in which the Supreme Court as a matter of statutory construction decided that the Copyright Act, which up until 1976 was pretty much the only copyright legislation on the books and hadn't even been amended that much, the Court had decided the Copyright Act didn't apply to this so that these broadcasts weren't protected by copyright, at least against the cable operators retransmitting them. Well, a lot of the cable operators, I think, as an emotional matter believed as a consequence that the Supreme Court had announced they had a constitutional right to do this, whereas the Supreme Court had said nothing of the kind. They just said, "Well, the Act doesn't cover it."
MAXWELL: As they later found out.
MOONEY: As they later found out. And while the broadcasters, etc., and the movie guys were seeking to have the '76 Act repealed or substantially recast so as to extract much more in blood and treasure from the cable guys, the cable guys were not really arguing it on a policy basis. They were arguing it as a matter of First Amendment rights and of the fact that the Supreme Court had reached this and that decision, and so forth. The two opposing sides, therefore, were like ships passing in the night.
MAXWELL: They really didn't engage in a policy discussion.
MOONEY: No! No! There was no real policy discussion, but there was a hell of a lot of shooting and a lot of shouting and Congressional hearings and so on and so forth. After awhile, I say "I", but I and a few other people, I guess, finally figured this thing out, that all you had going here was a policy discussion. That there was no real right or wrong in an absolute moral sense, and certainly not in a constitutional sense, but what had happened was that the cable guys had started doing this as a matter of course and the broadcasters and the movie guys had tried to shut them down with lawsuits. Failing that, the broadcasters, and even more so, the movie guys, had made a big stink in Congress and tried to get something attached to the '76 Copyright Bill when it came by, which I remembered well, by the way, but didn't remember anything about the cable thing. That was just a little sideshow. The big thing in the '76 Copyright Act was what librarians could do in the way of Xeroxing books for inter-library loan and that kind of stuff. That was the thing. There was a titanic battle between the librarians and publishers, but anyway, the cable guys didn't remember it that way. But what Congress had done then was simply to enact a compromise wherein the cable guys would get to continue pretty much what they'd been doing, but instead they had to pay something for it, which was a typical Congressional compromise and once you understood that history then you were in a position to deal with it and help make it go away, which after awhile, but only after a very tumultuous ride with attempted compromises of this and this, did it finally go away. And of course today it's irrelevant.
MAXWELL: Yes, totally.
MOONEY: Totally irrelevant because distant signals, they were in the package, but they don't matter.
MAXWELL: Well, they all kind of disappeared. I mean TBS is no longer a television station.
MOONEY: No, that's right. It's all fiber embedded, yeah.
MAXWELL: And then WGN segued into the WB and circumstances changed. So in 1980 when you got there how many cable subs were there?
MOONEY: I think there were about 23 million.
MAXWELL: Yeah, that sounds right to me because when I first got in there were 12.
MOONEY: Yeah. The ultimate approach to the copyright fight on a political basis was to tell the Congress if you do what these guys want, you're going to be taking stuff away from people and that is the big sin. Constitutional rights – aaah, that's sort of interesting, but let the courts worry about that, but take something away from somebody, oooh! And once that was figured out it all sort of went away.
MAXWELL: That's why it went away. That is good.
MOONEY: So we had to rise above principle.
MAXWELL: A very good line, Jim. Who were the powers that be in the cable industry at the time? Did the programmers have a very big voice?
MOONEY: No! At NCTA? No. NCTA, then and for all I know today, is principally an operators' organization. The programmers had a couple of members on the board, but two out of 23, at the time, at the time that didn't amount to much. When I got there it was also the case that the programmers were just in their formative stage and didn't have a whole lot of meat on their signals.
MAXWELL: Well, and in that case, they were primarily financed by the operators at that stage because nobody else would.
MOONEY: Yeah. Doug Dittrick was chairman and a lot of people on the board then were still the people that you'd find on the board ten years later, but certainly not now. Dan Aaron, from Comcast; John Malone, from TCI; Monty Rifkin, from ATC – ATC had, I think, been bought by Time Warner a year or two previously and Monty was still running the company; John Saeman was there from Daniels...
MAXWELL: Chuck Dolan?
MOONEY: Chuck Dolan was on the board, as was Gus Hauser. Bill Strange, Ed Allen, Jerry Lindauer...
MAXWELL: I talked to Jerry yesterday.
MOONEY: Did you? How is he?
MAXWELL: Very, very good.
MOONEY: Oh, good. 'The Colonel', I used to call him.
MAXWELL: Right, but he was a light colonel.
MOONEY: Uh-huh. A light colonel.
MAXWELL: I always remind him of that.
MOONEY: It was a board that was for the most part entrepreneurial.
MAXWELL: That list of people is.
MOONEY: Yeah, those were the guys who had started it or who had gotten there not too long after it was started.
MAXWELL: Was Amos on it, from Continental at the time?
MOONEY: Yes, yes, he was. How could I forget Amos?
MAXWELL: You shouldn't.
MOONEY: I shouldn't, no. He's one of my heroes.
MAXWELL: Yes. So they, though, were operators trying to claw their way, they had managed to get into the suburbs and they were trying to claw their way into the mainstream of American television delivery, I guess is a way to say it, and across the early '80s that was the end, really, of the franchising super battles.
MOONEY: Up until about '82, yeah.
MAXWELL: Then they, I think, all realized they had overreached, so it set the stage for the next set of problems, back to the problems with the cities. Now the original city franchising was because of rights of way, literally. To get across the streets, literally. That's where the logic of the regulation comes from.
MOONEY: That's still the hook. Legally that's still the hook.
MAXWELL: Right, and they ran into pole attachment battles in the late '70s, early '80s where that just finished...
MOONEY: The pole attachment battle had really been finished in 1978, or at least the big part of it was finished in '78, with the enactment of the pole law. That was for the most part, not entirely, but for the most part a battle with the phone companies.
MAXWELL: Right, utility to some extent.
MOONEY: Yeah, utility companies, who either would not let the cable operator on the pole, or who would charge an extortionist price to get on the pole, and there was some municipal involvement there in the sense of municipal utilities, but for the most part, it was the boxes and the big indies as we knew and loved them, and they thought that cable was just evil incarnate. "Imagine somebody else having the nerve to use a wire? And wanting to get on our poles?" So Congress had enacted in 1978 to give the operator the right to get on the poles, but curiously enough, didn't simultaneously specify, or even describe in general terms, a formula for how much the operator was going to pay the utility, whether it be the phone company or the electric company, but just sort of kicked that to the FCC, and there was a good piece of the Washington D.C. communications bar that made a very good living arguing pole cases before the commission for quite a few years after that. In any event, by the early '80s, the main policy dispute that cable people had was whether they were going to get a federal statute which would validate their independent existence as a kind of medium – because the FCC traditionally had classified cable as something ancillary to broadcasting and that is simply an antenna system and had predicated a whole lot of rules that suppressed cable on that basis. The cable companies had finally come to the conclusion that the FCC was so hidebound and so much a captive of its own rules and its own traditions and its own policy assumptions that the only way they were ever going to straighten this out and get a statute of their own was by going directly to Congress. They apparently had tried that once before in the '60s to disastrous results.
MAXWELL: Well, it resulted partly in the FCC freeze.
MOONEY: Yes, that's right. But by the early '80s they were willing to try it again and were looking around for guys like me to help them do it. What we did was first figure out what it was they wanted.
MAXWELL: Not a simple process.
MOONEY: Which was not a simple process because there was a substantial minority within the industry who thought that any statute, especially a statute which made any concessions to municipal authority in this area, would be an affront to the First Amendment and that if we were only patient the courts would sooner or later vindicate our status not only as a First Amendment medium, but one which as a consequence should be entirely free of regulation other than matters strictly necessary to protect the public health and safety, and that if we did not put our eggs in that basket, but tried to gain legislative relief even as an interim matter, that we would poison the well. That was a fight which went on in the cable industry until about three or four years ago.
MAXWELL: Yes, I know. That originally, though, was led by a guy who wasn't even a member of the NCTA.
MAXWELL: Well, Farrow and Tow and others in that... and an ex-FCC cable bureau chief, Sol Schildhause.
MOONEY: I'll tell you a funny story about Farrow. I'm going to digress for a minute.
MOONEY: At some point by the late '80s, early '90s, Harold finally decided that he was going to stop butting heads with the NCTA so he joined as a member. He bought some cable systems. I think that these things were actually called Low Ball Cable out in California.
MAXWELL: That's true.
MOONEY: And he brought these cable systems into membership with the NCTA and people were saying to me, "Are you going to allow this guy to be a member?" And I said, "Yeah, well, why not? He's a cable operator, you know? Why not? Sure, we'll take his money and Harold's seen the error of his ways; he can join." And finally the application for membership came in and Yuge Yianishek, who then was and still is, I think, in charge of membership at NCTA brought the application up to my office and said, "What should I do with this?" You've got to understand that Harold had made some minor headaches for me. I don't want to exaggerate it, not big headaches, but some headaches that occasionally cause me some problems, and I said to her, "Here's what I want you to do. I want you to take his application and enter it into the databank, send him a welcome letter and the welcome pack and put him on all the mailing lists, etc., but I want you to make a mistake when you enter his name. Instead of 'Harold Farrow' I want you to put in 'Howard Farrow'." So she did. About a month or two later I get a letter from Farrow saying, "You know, you people are so screwed up that you can't even get my name right." And Yuge brings the letter up and she says, "I think we'd better change it, don't you?" And I said, "No, don't touch it." This correspondence went on for about a year until finally I get a letter from him saying, "You win." Signed 'Howard'.
MAXWELL: That's good! Harold was a character.
MOONEY: He was a character. Anyway, the cable operators understood that they had to go to Congress but before they could do that they had to figure out what they wanted and there was this First Amendment thing, but I think the clear weight of opinion among at least the bigger companies – you get down into different strata of size and you encounter different kinds of politics, different kinds of opinion – the clear weight of opinion among the bigger companies and certainly on the NCTA board is that we should try to figure out whether we can get some statute that they could live with. Well, all right, what can you live with? There were a couple of committees that worked on this, one chaired by Ralph Baruch. I think there was also a special committee appointed to deal with it.
MAXWELL: Did Trygve run that?
MOONEY: He might have. I don't recall. I have a mental block on that. Trygve was at that time on the executive committee, and ultimately of course, all these questions came to and were decided by the executive committee. The other groups could think it out, and it was very complex.
MAXWELL: I remember talking to Amos about it, likening it to the Theodore Vail deal.
MOONEY: Yeah, it was kind of like the Theodore Vail deal in the sense that you'd have to make a devil's bargain here.
MAXWELL: Right. You had to. If you give up this, you get all that.
MOONEY: Right. So, the trick then was how to get what you needed to run a viable business and protect the stability of the assets, which was important.
MAXWELL: We had a serious capital generation problem at the time because of the vagaries of the city making decisions about rates, right?
MOONEY: Well, it was not only the vagaries of the cities about making rates, which was probably the principle problem, but there were a couple of other problems close behind it, one of which was the uneconomic concessions they would demand that companies make to them upfront as a condition of receiving a franchise, including agreeing to do things that had nothing at all to do with cable like plant trees and build libraries, but the other thing, and potentially as important as the rate issue itself, was that there was a significant body of opinion among the city officials that once your franchise period had run, and you had for tax and other purposes depreciated much of the equipment, you should have no real further economic interest in that plant and the whole thing should be put up for a new franchise and you should not be allowed...
MAXWELL: So, no right of renewal?
MOONEY: Yeah, and you should not be allowed to recapture even what we today call goodwill, which is the value of the up and running business.
MAXWELL: Interesting economics.
MOONEY: Yeah! Well, of course, if that view prevailed then there would be no cable business because there'd be no point in investing in it because at the backend there was just a big zero.
MAXWELL: Not a good backend.
MOONEY: No, and indeed, capital intensive industries... The sad, and at the same time, intriguing part of this is that there were some members of Congress who actually took this crap seriously. Not many, but some, which said a lot about the state of economics teaching in American colleges and universities.
MAXWELL: And law schools.
MOONEY: And law schools. Anyway, once we had figured out in a very broad outline what we thought a cable act should look like, then the trick was to figure out how to get the cities to buy it, and there was a political strategy to that, there was a kind of enticement strategy because they had problems with this too, because their own authority to regulate cable was kind of up in the air.
MAXWELL: Right, was under attack.
MOONEY: Well, not only was it under attack, but it didn't seem predicated on anything real other than this notion they had about the rights of way, and I think ultimately...
MAXWELL: And once you get beyond public safety...
MOONEY: Well, they had to be concerned that at some point some court would say the king has no clothes, and these guys are trying to take a public health and safety power they have and leverage it into being junior FCCs all over the country. So the first thing we did to scare them a little bit was got a sympathetic committee in the Senate, the Senate Commerce Committee, to support a bill sponsored by Senator Goldwater that pretty much had our wish list in it. It didn't go anywhere, it wasn't intended to go anywhere, it was sort of a dry run that fulfilled two purposes. 1) it made the cities sit up and take notice that yeah, it was actually possible Congress could legislate them pretty much out of business in this area, and the other thing to do was to get that committee used to it, used to the issues, used to going ahead with something like that.
MAXWELL: So it was an education process, too.
MOONEY: Because we always knew, assuming you had to get this done within a two-year timeframe that our big problem was going to be in the House and the faster you got it done in the Senate...
MAXWELL: The faster the pressure the better the... right.
MOONEY: First session – the faster you could get it over to the House, the longer you had to resolve the problems that you knew ultimately would work. So that's what we did. After the Senate had passed the bill, John Dingle got up at the National League of Cities meeting and said to them, "Boys, I sympathize with you on this cable issue you have, but you'd better work it out with them," and that was the big breakthrough.
MAXWELL: A real politic point of view. Line in the sand.
MOONEY: They all said, "What!?"
MAXWELL: And he had that power at that time, very clearly.
MOONEY: Yes, he did. I'll tell you a funny story that happened once during that period where a woman named Ann Wexler, who had been in the Carter Whitehouse and then was on retainer to us, and I were going around the cities talking to mayors about how it was in their interest to come together with us and work something out in a reasonable fashion that everybody could live with. She had been the public liaison, and liaison to Democratic mayors in the Carter Whitehouse. She knew them all. So, we went to see George Lattimer, who was then the mayor of St. Paul, and during that year – this was, I think, in 1982 or '83 – the president of the National League of Cities whose lobbying arm in Washington was our principle opponent on this thing. So we went to see George. Dingle had promised me that he would call George and urge him to try to come together with us and work something out. So, George obviously, Mayor Lattimer was preoccupied with being the mayor of St. Paul and wasn't thinking too much about the National League of Cities, or for that matter the cable issues, which was part of that, so Ann and I are ushered into his office and I start making my pitch about how this is in everybody's best interest, and he's sort of vaguely following it, and he's looking at his watch because it's getting time for lunch and finally I get to the part where I said, "And John Dingle I believe is going to call you and talk to you about this." And he looks at me and he perks up, he says, "John Dingle!" In the outer office you can hear the phone ringing and the secretary comes and she says, "Chairman Dingle's on the line for you."
MAXWELL: Great timing!
MOONEY: It was almost supernatural, and George warmed up a lot after that phone call interrupted our meeting.
MAXWELL: He actually listened then.
MOONEY: Yeah, he started listening, and sure enough we pretty soon got into negotiations with the League.
MAXWELL: So you got a deal, though, finally.
MOONEY: We got several deals.
MAXWELL: But the first deal that everybody felt like they had there were a couple of court cases that derailed the amicability and the deal, I guess is one fair way to say it.
MOONEY: There was a Cox case, particularly in the summer of '84, June of '84 that derailed it.
MAXWELL: It got all the way to the Supreme Court, right?
MOONEY: Well, no, actually I think it ultimately might have gone all the way to the Supreme Court but the district court case pretty much derailed the deal. In fact, we were about to move a bill in the House Commerce Committee in the next day or two and on the morning that the case came down a number of us were in the kitchen of an apartment of a Commerce Committee staffer where we'd all gone to get a little peace and quiet and had all the papers spread out on the table and we were working out some final language to go into the bill, and somebody called from his office and said, "Gee, you guys ought to know that this court case..."
MAXWELL: And that derailed the process right at the moment.
MOONEY: Yeah, it sure did.
MAXWELL: As I remember, you had to go tell Dingle the deal that was done wasn't done?
MAXWELL: That must have been a fun process.
MOONEY: Oh, yeah, it was a lot of fun. It was a lot of fun. But he was not unreasonable. I mean the ground had shifted under everybody.
MAXWELL: And he recognized that?
MOONEY: And he recognized that, but he was not pleased about it because as chairman of the committee, one of his primary objectives was to make as many headaches as he could go away in the given year, and if this one didn't go away then it would be around to confront him again next year, and chairman don't like that.
MAXWELL: No, they don't, I know.
MOONEY: So, we had to do that and the markup was called off and everybody just sat around for awhile until I remember one day in August I talked to Ed Allen. I said, "You know, this is a damn shame. We cannot let this thing go." And I went up to see Dingle again and said, "What do you think? How do you read the cities? Do you think we could get them back to the table if the industry was willing to go back?" And he said, "You get your people willing to come back and I'll take care of the cities. I'll get them back." So we had that famous board meeting the following week, in the August heat in Washington, and that was a pretty colorful conversation. I remember standing at the urinal in the men's room and being berated unmercifully by one guy who was not a member of the board but who'd come to watch and said, "How can you possibly do this? We're on the verge of vindicating our First Amendments rights," or whatever, and I said, "Don't talk to me, talk to them. I just work for them." I told him that my candid assessment was that they had a shot now and if they took it we had a good chance, not a certainty – it was hard at that point to say even a probability – but a good chance, and if they didn't take it then it would be a long time before the opportunity presented itself again because the way Congress works is that these guys knock themselves out politically trying to get something done, and if it fails...
MAXWELL: Yeah, it's like once burned.
MOONEY: And it's discretionary, unlike say extending unemployment compensation benefits or whatever. If it's discretionary they can just say, "No. We tried that, it didn't work, I've got other problems to deal with." So, they said, "Go try it again," and we got together with the cities again the first week of September and it was remarkably easy. I think they were just tired. I think they were just exhausted by it, and I think that the National...
MAXWELL: And they probably felt they'd lost already to a degree.
MOONEY: I think they felt that they had, and that they were salvaging things which otherwise they might have lost, but I also think that there was a lot of internal pressure in the National League of Cities organization to the effect of "For God's sake, get this thing done. There are much more consequential things that we need to put our political muscle behind than cable television. Who cares about cable television when we have all of these other crushing problems facing the cities?" In the early '80s there were a lot of crushing problems facing the nation's cities.
MAXWELL: So this was...?
MAXWELL: September of '84 and you're back at the table and cut a deal.
MOONEY: Well, we cut a deal and went back to the board with it and they approved it, and tallied it up.
MAXWELL: Well, it wasn't unanimous.
MOONEY: No, it wasn't unanimous. I'm just getting to that part. The House approved it on a voice vote almost unanimously and it went to the Senate and then the real fight started because there were a number of people in the industry who felt very strongly that this was still the wrong thing to do. No matter how good a bill the rest of them thought it was that this was still not the right thing to do, and they decided to fight it and you had all of these peculiar alliances going on.
MAXWELL: Very, at the time, I thought. It was fun to cover in those days.
MOONEY: Yeah, yeah. The Senate, as you know, is a strange and wonderful place and Senators are strange and wonderful beings.
MAXWELL: I agree.
MOONEY: And there were all these road blocks that began to be put up in front of us and you had everybody from the Naderites trying to kill it, to the anti Equal Employment Opportunity people trying to kill it...
MAXWELL: Well, it had an EEOC component in it, if I remember. It was Mickey Leland... right.
MOONEY: It had Mickey Leland's amendment which would have subjected us to a what were then called "goals", and which may or may not have been used to regulate us with quota like requirements, depending on who was running the FCC at any given point, and this was the kind of thing that I pretty much would cede to corporate counsel and let them work it out because you try and get between the companies and the civil rights types in Congress on that one all you're going to do is get eaten alive.
MAXWELL: And Mickey was never easy.
MOONEY: Mickey was never easy and Tim was very much in support of him. And then you have Netzenbaum, who was leading the charge for the Naderites who had decided at the last minute that what they wanted out of this was the right to participate as a party in any litigation involving franchise renewals. And that was totally out of left field, but also was a prospect too horrible to contemplate. We would have sunk that bill easily if that was part of it because to hell with that! All of the time a game was being played to delay us, back us up against the end of the session. It was an election year and Congress wanted to be out of there. As a matter of fact, it was a Presidential election year and everybody was scared. Most people believed that Mondale didn't have a chance, but that's not the same thing as believing they were, as a consequence, safe. I mean, nobody's safe in a Presidential election year. Pretty soon we got a day or two left and that's it. I got a call at 1:00 in the morning the night before the supposed last day of the Congress from somebody who told me what it was that Netzenbaum wanted.
MAXWELL: Who called?
MOONEY: Doesn't matter. I said, "It shall be done." And it was done.
MAXWELL: And what did he want?
MOONEY: He wanted something. He wanted a favor.
MAXWELL: Oh, that's easy.
MOONEY: And it was done, and he vanished as an opponent to this thing. That left us stuck with the EEO thing. That got resolved in a way that was less agreeable and involved some unfortunately very tough conversations of precisely who was going to take the heat of this thing going down if it went down. Happily, in the end, reason prevailed. I'm leaving out a lot of stuff, including some fairly juicy stuff on how things get done in Washington if you need stuff done at the last minute. Who you hire and how you find out who the guy is to hire, and so forth.
MAXWELL: I don't think there's any real secrets about that anymore.
MOONEY: No, no, there aren't. But we did what we had to to get that bill passed. We didn't break any laws, but ultimately I think at about 6-7 o'clock in the evening the House gave it final clearance and it was done. It was a group effort. We had a lot of people and spent a lot of time, a lot of money, risked a lot of their personal standing in the industry just to get this done, and of course risked a lot of "I told you so," if three or four years down the road the thing went bad because it was not a perfect statute, cities did get significant authority, particularly in the granting of original franchises and there was a lot of grandfathering. There were not too many new original franchises left to grant. There were some, but not too many, but a lot of the stuff that they already had in there was grandfathered and kept, and people were going to have to, in terms of capital outlays, people were going to have to wait through the term of a franchise, usually fifteen years, before they could get rid of it, and we were still going to get rate regulated for two more years.
MAXWELL: But the sense of renewal was a significant solution to an overhanging problem.
MOONEY: To an overhanging problem. The assets ultimately were going to be safe. All you had to do...
MAXWELL: Was live through, which made the capital markets a little more favorable at that time.
MOONEY: Right, sure.
MAXWELL: So cable exploded.
MOONEY: It made the capital markets more favorable at that time because you'd go and see the bank and say, you see, this is not really such a flaky asset. There's some "there" there that's going to stay there. But you could also point to rate regulation – two years – which in the going forward time framework you're dealing with the banks is a relatively short period of time, and you could also, with respect to those who could look beyond the next couple of years, argue with a great deal of force that once we were free of rate regulation, not only would our ability to pay down the debt we'd incurred to build these plants, but we'd also have sufficient money to start plowing into programming and become a significant medium of our own. Now, that was a little bit of a reach as an argument with the Street and with the bankers, especially with the bankers because bankers don't like to think that way. They're not visionaries, but there were some people on the Street who were visionaries. Not that many, I don't think.
MAXWELL: No, not many at all. I remember.
MOONEY: But enough, I think, to make it a respectable notion that cable was going to be a big deal.
MAXWELL: Well, the network launching started from then. We were adding channels a week there for awhile. I know – I was selling advertising to them.
MOONEY: And you even had, heavens to Betsy, the broadcast nets start to make noises and make tentative efforts towards getting...
MAXWELL: That's when they jumped in. It was interesting times.
MOONEY: It was very interesting times.
MAXWELL: So how did you relish that success?
MOONEY: Well, by this time I'd become so emotionally committed to the cable industry and its virtues and its merits and its promise that I thought it was just the greatest thing since sliced bread and of course I was very happy to have been a part of it and to have been there as the leader of at least the mercenary army they employed in Washington to do these things for them. And it meant that I probably had some sort of future there because during the summer I'd become president of NCTA, about two weeks, as a matter of fact, after that court case came down that almost sunk everything. I liked it. It still to me, then, was very much one of those jobs where you're driving in in the morning and you say I can't wait to get there and I can't believe they pay me to do this because I have so much fun doing it. And I was having a great time. I thought it was just peaches and cream. You know, for a brief period there, for a couple of years, we had our problems in Washington but it was nothing we couldn't handle. There was nothing close to the intensity and the pressure of trying to get that thing through. I'm one of those people who tends to internalize a lot of this stuff and take personally that I have to get this done. I can't go home at night and forget about it, and say, "Well, the hell with that. I'm not going to think about that until tomorrow morning." I think about it all the time. I dream about it.
MAXWELL: Dreaming about Dingle does not sound like a cool thing to me.
MOONEY: Oh, John's a good guy.
MAXWELL: I know that, actually, he's a good guy.
MOONEY: There were others who were not such good guys, but he's a good guy. I felt a great sense of relief that this thing was finally done.
MAXWELL: So the industry began growing rather... I mean, they were building out those franchises.
MOONEY: They were building out the franchises, they were spending more money on programming. As the programming got better, the subscriber crowd increased within built up areas, and it was one of these deals where one fed the other.
MAXWELL: That it did.
MOONEY: To the point where I think by the end of the '80s, when you took it up to around '89, the broadcasting industry really began to get scared, and they understood that in the words of one broadcaster, I will never forget, some guy who went to some broadcaster conference in Baltimore said, "We had for long understood that we were God's chosen and that all we had to do to make money was hold up our bowls and it would rain money."
MAXWELL: And it did!
MOONEY: And it did for a long time. I dated a woman for awhile whose father owned the CBS affiliate in Mobile and went down there once with her to be present for a party they were throwing on opening a new headquarters and studio for the station, and Gene Jankowski and a bunch of other CBS brass were there and I was introduced to them and they knew who I was. I was, at the time, executive vice-president of the NCTA. They clearly regarded me as the scum of the earth. To the broadcasters cable was an illegitimate form of television populated by people who were rogues and scoundrels and just barely one level above the criminal class in this country. They were open in their contempt for us, as you recall.
MAXWELL: I can recall very well.
MOONEY: And I think that one of the things that isn't really talked about much in the cable industry, but which nonetheless was real for awhile, was that we wanted to show them.
MAXWELL: That is a very true statement. It's fun being an underdog to a degree. It's a lot more fun when you're the underdog that comes out on top.
MOONEY: Yes, it's most fun as you're coming out on top. When you're under and being kicked, it's much less fun.
MAXWELL: Right, but it certainly gives you an edge to get there.
MOONEY: Yes it does, very much so.
MAXWELL: And I remember that treatment very, very well. That was around the time that ABC and Westinghouse...early '80s was SNC and the news fights and the other things. Those were interesting times.
MOONEY: Yes they were.
MAXWELL: But they were a lot of fun. So you were still at the NCTA at the end of the decade and things began to change in the early '90s. We had the problem in Tennessee with the rate increases.
MOONEY: Not just in Tennessee.
MAXWELL: No, but that was the egregious one at Al Gore's mom's house.
MOONEY: The problem in Tennessee was that some fellows from New York who were of all things broadcasters...
MAXWELL: Marty Pompadour.
MOONEY: Marty Pompadour. I wasn't going to say his name, but now that you've said it...
MAXWELL: He's not a bad guy, but...
MOONEY: He's not a bad guy, but I think Marty had too much money and it was burning holes in his pockets, he didn't know what to do with it.
MAXWELL: Well, he had just run Ziff's television stations, remember?
MOONEY: Yes, he had. He had, and he decided that he and some friends of his were going to buy these Tennessee cable systems and I guess they sort of forgot to do due diligence.
MAXWELL: They certainly did.
MOONEY: They overpaid for these really run down...
MAXWELL: Very small market...
MOONEY: Very small market...
MAXWELL: Not market, actually.
MOONEY: Yeah! Too small to be markets. Systems that were pretty much held together with chewing gum, and I mean they were chewing gum systems and they charged chewing gum prices, but of course Marty and his partners all of the sudden were in hock up to their eyeballs having overpaid and not done due diligence and finding out what it was exactly that they were buying, and had to jack the rates way, way, way up, like 75-80% increases and this was all within Al Gore's state. And indeed, as you mentioned, I think some of his relatives were involved in this.
MAXWELL: His mom. I mean, his mother and dad. Wait, his dad was dead by then, but...
MOONEY: No, his father was still alive.
MAXWELL: His father was still alive? But it was his mom who got the bill, I remember I vividly.
MOONEY: Al was on the Commerce Committee, did not like the cable industry and as was later shown to much broader effect, wasn't troubled by facts or scruple in accusing people of things.
MAXWELL: Not then. Boy!
MOONEY: If a kid walked into a bank and stole one of the pens off the courtesy counter Al would accuse him of machine gunning half the tellers and stealing all the money out of the cash drawers and not perceive that there was some problem of verisimilitude inherent in such statements. Anyway, that caused us a big problem because it gave him an incentive, a down home incentive to come after us.
MAXWELL: It was a perfect populist argument.
MOONEY: Well, yeah, it was not only a perfect populist argument, but it also happened to coincide with characterizations of us that had been made by the dish industry, which was a pretty big deal out there in the hills and hollers of Tennessee. But by itself, this wouldn't have amounted to much. However it occurred within the context of widespread resentment of cable rate increases far beyond the rate of inflation, and although there were perfectly good reasons for that they were a little bit too ethereal and academic in nature for most people to appreciate. All they knew was that their cable bill was going up. Widespread resentment of poor cable customer service...
MAXWELL: Which was valid.
MOONEY: Which was valid, which was very valid. Everybody's got cable stories, even cable operators have cable stories. I have cable stories.
MAXWELL: So do I.
MOONEY: It also occurred in the context of the broadcasting industry becoming more and more alarmed that unless something was done to sit on cable it would become not only serious competition for them, but perhaps competition they could not withstand.
MAXWELL: Well, networks were beginning to get a little heat from cable nets and advertising.
MOONEY: Yeah, they were, and they could see this and they could see which way the trend was going. It also occurred in the context of the telephone companies becoming alarmed at what our aspirations were, and at the same time that they began themselves to feel stirrings of aspirations toward our business. That was in the days where the phone companies thought that they could get into the video business.
MAXWELL: They could get video down a copper pair, right.
MOONEY: See, they were all going to put fiber to the home, then, too. Remember that, fiber to the home?
MAXWELL: I remember that very well. One little town in Georgia actually did it.
MOONEY: One step further removed, but still present in this little stadium we're describing were the labor unions. The IBEW...
MAXWELL: That's right. And the CWA.
MOONEY: The CWA, the telephone company unions, and to a lesser extent, the broadcast industry unions, which were at the same time fearful that we would indeed make inroads into the businesses that they represented and therefore threaten their jobs, and resentful of the fact that we were largely unorganized to adopt their language. We didn't have labor unions.
MAXWELL: I think unorganized actually fit more broadly than that.
MOONEY: That too, right. There were still other people dancing around out there on the edges of this metaphorical stadium we're building. The dish guys, and the sports guys still sore about this and that over copyright, the movie guys having very mixed feelings over our growing influence, and what happened was that not only were a few members of Congress, like Gore, predisposed to be hostile to us, and with good constituent reason to be hostile to us, but there were a whole lot of troops standing around waiting to be led in a crusade against us. Gore, and Jack Danforth, who if you remember is an Episcopal priest, and who really felt that some of the cable people were evil out of his Cape Jour Du and other experiences in Missouri, began to put together a coalition that was very hostile to us and pretty soon we're in a big fight.
MAXWELL: And didn't quite see it coming. At least the operators didn't. I don't know about what it was like in D.C.
MOONEY: The operators didn't want to take it seriously.
MAXWELL: Well, that's a fair characterization, I think.
MOONEY: See, Gore had made a run on us a couple of times in the late '80s with this dish thing.
MOONEY: It was scrambling. It was scrambling and whether the cable programmers were going to take steps to keep people who owned C-Band dishes from taking down off the satellites the programmers signals for free, and according to the opponents of the cable industry, and especially the dish people, the operators were engaged in a kind of conspiracy to require the programmers to do that, to scramble their signals.
MAXWELL: Not withstanding the fact that the dish organization split over the issue at that time with businesspeople taking...
MOONEY: That's right, that's right.
MAXWELL: I'm going to Taylor Howard's funeral tomorrow.
MOONEY: Yeah, I saw he died. What...?
MAXWELL: Plane crash.
MOONEY: Oh, that's right.
MAXWELL: He's a pilot.
MOONEY: He wasn't that old.
MAXWELL: No, and a good man and a good friend of mine.
MOONEY: I'd met him a couple of times. I really did get along with him.
MAXWELL: He's a class act.
MOONEY: That's what I recall. He was a class act. Some other people were not class acts.
MAXWELL: Very much the opposite in fact.
MOONEY: Anyway, Gore had made a run on us with this a couple of times and we beat him in the Senate a couple of times. He used to make a run on the appropriations bill and I think the operators mistakenly took that as a sign that we'd always be able to beat it, but there was a growing ferment out there which...
MAXWELL: And arguably the rate increases were aggressive on a broader sense.
MOONEY: Oh, I think that they were aggressive, and if they weren't aggressive they appeared so to the point where it was impossible to in a brief space of time explain why they weren't aggressive and how they were justified. It only takes a minute or a couple of seconds to hurl the accusation and then it take five minutes to answer, to give the justification. But there were a couple of important things that went on here. One was that the broadcasters began to understand that they had an opportunity here. I don't think they knew what kind of an opportunity, but they had an opportunity and these guys of course had a long history of using the government to their own ends.
MAXWELL: Still do.
MOONEY: Still do! They're masters at it. There were present, within the broadcasters group then, one or two people who were very, very smart, very politically experienced including a good friend of mine named Marty Franks who then had been hired to run the CBS office. He was an old Mondale guy, and Marty was told to get this in hand and see what he could do to put the hammer on the cable guys, and he began to put together this coalition because while Eddie Fritz had proven to be an effective leader of the NAB, his experience and his historical... put it this way, he didn't know anybody outside the broadcasting industry, aside from the best people they knew, the people who were their particularly steadfast friends in Congress. His experience did not include the rest of the world. Marty Franks' experience included a hell of a lot of the rest of the world including the union guys and the telephone guys and so on and so forth, and he began to put together this coalition and I believe – maybe I give him too much credit – but I believe if anybody deserves credit for putting that coalition together it was him. He did a hell of a job at it. It was a fight that went on three or four years, maybe, and ultimately we lost it. We almost won it.
MAXWELL: It was close.
MOONEY: It was close. We didn't have to lose that fight.
MAXWELL: But it was a big loss. The '92 Cable Act was very crippling.
MOONEY: It was a terrible thing. It was framed almost entirely without cable industry participation, and by that I mean operator participation. Some of the programmers were in on it for reasons that are so complex and so bizarre it would take a whole day to explain them, but it was everybody else's wish list, really.
MAXWELL: It felt that way.
MOONEY: The initial cut that the FCC took at implementing the rate regulations was bad enough, but then when Jimmy Cuello got finished being temporary chairman and Reed Hundt came in and redid them, then it really got bad. It was a great depressing thing for the industry. Now fortunately the industry has sprung back. The '96 Act took away a lot of the misery that was...
MAXWELL: It took the worst of the onerous parts of it off, right, and it changed the rate regulation paradigm. Although when we look back, that's when Malone figured out how to embed the cost of upgrading set top boxes into the rate regulation formula, which allowed for significant rate increases on a lockstep basis. So we got to the '92 Cable Act and everyone against the cable industry got their wish list. So cable had a little stutter step there in the markets and a lot of other things. '92 was kind of a tough year in the cable business.
MOONEY: Oh, yeah, I think it was more than a stutter step, it was a real problem and the psychological effect on the industry was as bad, I think, as the actual economic effect. And for that matter, I think in retrospect, and largely due to the fact that the '96 Act came along and undid much of the mischief done by the '92 Act, I don't think the industry suffered any permanent injury from it. But, at the time, there was a significant amount of damage that was being done, and of course nobody knew that the '96 Act would be coming along in a few years. I think the spirits in the industry were quite low.
MAXWELL: They were very much. Well, that led to the first big steps towards the consolidation of the operating side of the business because it felt so much antipathy and pressure from different market places.
MOONEY: Yep, and I think it led to a certain amount of hubris in the phone companies, who decided that well, these cable guys have messed it up and now we're going to come in and show them how to do it, and the great merger of Bell Atlantic and TCI that died a-borning, but I think that the industry suffered no permanent damage from the '92 Act in part due to the fact that the '96 Act came along within a few years.
MAXWELL: Well, subscriber growth, by the way, through that whole era was steady.
MOONEY: Yeah, I was just about to say, I think it's a tribute really to the vitality of the business and the fact that if you describe evolving consumer tastes and habits as history, the cable business was on the side of history.
MAXWELL: Yes, very clearly at that point.
MOONEY: And it didn't really slow down at all.
MAXWELL: No, not right in that area. It didn't begin to slow down until the end of the '90s.
MOONEY: That's right. And there was enough money already in the programming pipeline and enough programming infrastructure that had been created to get programming into the pipeline that the industry pulled it off quite well and now is in a position vis-à-vis its competitors in the broadcasting industry that is much stronger than was the case even in 1991 and 1992. Now, of course, a lot of other people also have noticed what a good business subscription television is and we have our own competition coming from the K-band industry and so forth, which has been doing pretty well also during the last five years.
MAXWELL: Very, very well. Another interesting thing that resulted out of the '92 Act that was an unintended consequence – the beginning of the consolidation on the operator's side helped push the consolidation on the programming side and the split between the operating and the programming side is much more pronounced today than it was at the time.
MOONEY: Yeah, I think that's true. You've got a lot less common ownership across that gulf.
MAXWELL: Much, much less. That used to be the norm. It is not now.
MOONEY: I also think, though, that you have had a bit of a reversal in the historical understanding of who's the pushee and who's the pusher because it used to be the operators who were always understood to be in a position to push the programmers around and I think that situation has achieved much more equilibrium.
MAXWELL: That's true, but I think that's partly because they diverged.
MOONEY: Yes, I do too.
MAXWELL: So we're at '92 and you're at the NCTA and the world isn't very happy. I hear you weren't very happy then.
MOONEY: Well, the world wasn't very happy. I wasn't very happy. Part of the world wasn't very happy with me. I wasn't very happy with all of it. I think that a lot of the mid-size guys were unhappy with me and thought that if I'd just done things better that the '92 Act wouldn't have passed and I was sort of the opinion that they told me to fight it and I sure as hell did and gave it everything I had to take it down, but ultimately when the veto of a president who is three weeks away from a general election is overridden due to a substantial number of members of his own party going over to vote against him, you know something's up.
MAXWELL: And it ain't necessarily the bill.
MOONEY: Right, but something was up. And no matter how many votes we broke off, there would always be another one to fill in the slot.
MAXWELL: That was an amazing historical accident, almost.
MOONEY: Yeah, it was, and our mistake was getting caught in it. But in any event, a number of things happened to me after that. One thing was that the board was kind enough to re-up my contract, gave me a nice raise and all that stuff. That didn't sit too well with some of the guys, especially guys who were not on the board. My mother died in January of 1993 and we're not a close family, but there is something that happens when your second parent dies. You really understand in a way that is deep that there is now nothing between you and the deep blue sea but you. It matters not a whit that for 25 years you may have been paying that parent's bills and all that stuff. It matters nothing. The next thing that happened is that we almost lost Jimmy in April. He came down with a gastric ailment that nobody could understand, and he was 18 months old. He is a skinny kid to begin with. He couldn't keep any food down, anything you tried to give him he'd vomit up, and they gave him every conceivable test for everything they could think of in terms of it being some kind of a bug. They did a laparoscopic study of his stomach, you know, they fished a thing down.
MAXWELL: He must of loved that.
MOONEY: Oh, boy! They did a barium enema. If you've never seen an 18 month old kid get a barium enema, be glad because it ain't pretty. They strapped him to a board and the kid just screeches. They took it so far as to do an MRI of his brain to try to figure out if it was something neurological. And here the kid's been in Children's Hospital for two weeks, they're trying to feed him now intravenously and little kids can't take intravenous much because they've got these itty bitty veins and then they keep blowing the IV out and there's only so many places you can put it. They still couldn't figure out what it was. The pediatrician finally told us, take him out of here, get him out of here. If you keep him in here much longer they are not going to figure it out, the specialists are not going to figure it out. If they were going to figure it out, they would have figured it out by now. And if he stays here much longer he's going to catch something, and his resistance is such that he could end up dying of pneumonia or something. So we took him home and gradually over a period of a month he started to come back and he gradually was able... We were feeding him some awful stuff. The only thing he could tolerate which we had shipped down from New Jersey – they didn't even sell it in the Washington area stores – it was a liquid thing for geriatric patients, but he could stomach it and he gradually came back. Louise and I had been married for three years and I just almost lost my child. At the same time, I don't see it getting any better at work because I know that it ain't over yet, that Jimmy Cuello is only going to be temporary. We get along with him, but somebody else is going to come down the line.
MAXWELL: And then we got 'Heedless Hundt'.
MOONEY: Yeah, and it was probably going to be somebody picked by Al Gore, and I've got all these guys grousing in the industry, saying, "Ra, ra, ra, this guy's got to go and so forth," and I finally decided, I started talking to some of the executive guys about it and several said "This is not a problem, fight it," and a couple of guys said, "This is a problem. We're not going to tell you what to do, but you've got a fight here." And Louise and I talked and we said, "Hell with it." I've done this for ten years, I was tired of doing it...
MAXWELL: It wasn't a thrill going to work.
MOONEY: It was no longer a thrill going to work. It felt like you were sort of at the bottom of the national trash chute. I would describe it as a different type of shoot were this not being filmed for educational purposes because everybody's complaint about the cable industry... people had gotten so used to complaining to their Congressman about the cable industry that it felt like it all eventually came back to me, and I'd say, "Enough! I don't run these companies." But I had personally been given a hell of a good run in that job. I had gone further than I ever thought, when I came to Washington in my Volkswagen, that I would go. I had finally discovered that there were other things in life. I was married and I had this little boy. I had discovered via my mother's death at an advanced age my own impending mortality, and it occurred to me that there might be other stuff in life that was fun. Why do I want to just sit here and keep slugging this out? The hell with it. So we quit.
MAXWELL: And moved out here. We're in the Northwest, by the way.
MOONEY: We live on an island in Puget Sound that is about 12 miles due west of Seattle, 20,000 people. The island's about the size of Manhattan. We have a beautiful house that we just finished rebuilding on a 155 feet of waterfront, which includes deep water moorage where we keep our boat. We have a nice little business that has its pressures, but nothing like what we were used to in the old days. We're still in the cable industry, we have fun. As we mentioned at lunch, we have home delivery of the Wall Street Journal and the New York Times.
MAXWELL: So life's fun.
MOONEY: Life's fun, life's great.
MAXWELL: And cable wasn't a bad deal.
MOONEY: And cable was a great deal. Cable was a wonderful, wonderful thing to be involved in. I think sometimes we're too close to it. I think sometimes we miss, really, that we were part of a really big thing that changed this country, changed the way people life their daily lives, and did so largely to the good.
MAXWELL: You were down in Atlanta the day CNN started, I think, along with me and a few hundred of our best friends.
MOONEY: Yeah, yeah! Right!
MAXWELL: And that, frankly, is something to look back on.
MOONEY: Yes, it is. Yes, it is. I saw John Hendricks in an airport a little while ago and I said, "You know, I have to tell you again," because I've said this to him before, "how proud I am of what you've done." And the difference he made, not only in terms of our industry but in terms of television and the life of the country. It is a very important thing we've been involved in, and it's a good thing. It's also been a hell of a lot of fun.
MAXWELL: It's been a good ride. Thank you. This is the Hauser oral interview for The Cable Center. I'm Paul Maxwell, this is James P. Mooney. Thank you very much, Jim.
MOONEY: You're welcome. Thank you.