CableLabs founder Richard Leghorn was named a recipient of a special Vanguard Award for outstanding contribution for the role he played in helping create CableLabs more than 20 years ago.
Beginning in 1984 and for the next few years Leghorn worked with the NCTA board of directors on creating an entity that would plan, introduce, and help develop new and innovative technologies for the cable industry. Leghorn personally funded a significant study by RAND Corp. that led to the structuring and establishment of CableLabs in 1988. He now serves as director emeritus on CableLabs’ board of directors.
Leghorn is slated to receive his award on Tuesday at The Cable Show ‘08.
What follows is an extensive interview with Leghorn by CED’s Senior Editor Mike Robuck.
CED: How did you find out that you were included in this year’s class of Vanguard Award winners, and were you surprised?
Leghorn: Dick Green called to say that CableLabs would like to present me with a special Vanguard Award if I was going to be in New Orleans for the cable show.
CED: Who is the first person you’ll thank when you receive your award?
Leghorn: I’ll express my appreciation to whomever gives me the award, say that in accepting it I do so to honor those who worked with me to get CableLabs off the ground, and also Dick Green and his associates who got the job done.
CED: CableLabs celebrates its 20-year anniversary this year; what went on behind the scenes to get CableLabs off of the ground?
Leghorn: After much thought and considerable work, I proposed to the NCTA board at the meeting in La Quinta that they go ahead to organize an R&D consortium, taking advantage of all the work I had done and my earlier experience with matters of this sort. Everyone yawned a bit but was polite. They were too busy acquiring companies for the consolidation of the industry and matters of that sort. However, in September of 1987, Jim Mooney, then president of NCTA, wrote that it was time to crank up this idea, and that he would be willing to organize a committee to do so, but did not think the organization should become part of, or subservient to, NCTA.
I approached John Malone to chair such a committee, and when he accepted we agreed on five or six other committee members. I also gave RAND Corp. a $50,000 grant to survey other industries that had collective R&D consortia to see what lessons we might learn. Economist Lee Johnson did this work. I asked him not to give us any written reports, just an oral briefing so that we could quickly select what features were appropriate for the cable industry.
Our first committee meeting was in January , CableLabs was incorporated in May, and on June 9, John Malone wrote a letter inviting operators to join. I felt that if we got 50 percent or more of cable subscribers represented, it would be a success. To my surprise and delight, 85 percent signed up within a month or two and accepted a proposal that they commit support for six years, the time necessary for a new R&D entity to prove its worth.
CED: What is CableLabs’ biggest accomplishment in its 20-year history?
Leghorn: When CableLabs was organized 20 years ago, the broadcast industry was beating up on cable in the business sense; the telephone industry even more so. Today the broadcast industry is clearly playing second fiddle to cable. The telco industry and cable are now in a neck-in-neck competition.
CED: What technology will have the biggest impact on cable operators and their subscribers over the next five years?
Leghorn: DOCSIS 3.0.
CED: What was your “welcome to the cable industry” moment, or what cable operator-related memory stands out the most for you?
Leghorn: In 1965, I bought a house on Cape Cod to live in during the summertime. It had a huge and ugly roof antenna. I told my wife to just call the cable industry and ask for service. There was no operator on the Cape, so in 1966 I organized Cape Cod Cablevision Corporation, which contracted with Stromberg Carlson to build the first 10 miles and promptly made every mistake in the book. Fortunately, I was able to straighten this out in time to build a profitable company, which John Malone acquired in 1984.
CED: U.S. companies, especially those that provide services, increasingly rely on their vendors to innovate. How would you evaluate cable’s reliance on its suppliers? Are there any risks or perils from cable relying on a defined subset of vendors in the communications industry at large?
Leghorn: Let me distinguish between systems engineering and component engineering. Systems engineering, in order to assure interoperability, defines either guidelines or specifications for vendors. CableLabs does so principally through establishing committees and coordinating their efforts with members of both operators and vendors, hardware and software. In addition, vendors license cable operators, sometimes royalty free, through CableLabs the right to use their patent claims, which affect interoperability, as opposed to those dealing with what we call the bells and whistles of their products. The systems engineering is best done on a collective basis.
However, conforming components are best developed and produced by vendors, who price and sell to operators quite independently as required by the antitrust provisions of the Cooperative Research Act. Sometimes operators also develop components, as Comcast increasingly does with its “acres” of engineers. However, when such efforts are attempted independently of CableLabs, it can be costly and unproductive. Take for example DCAS, which Comcast and Time Warner tried to develop independently of CableLabs at an unnecessary cost approaching $2 billion. Proposals for developing DCAS had been made by independent cable engineers six or more years previously. I refer to proposals, among others, by Gary Logston and Steve Dukes. Unfortunately, CableLabs’ board did not support programs to develop DCAS until after the failure of operators’ efforts became obvious. As for cable’s reliance on their suppliers, this is very productive as long as the suppliers offer products conforming with CableLabs guidelines and specifications.
CED: Why would CableLabs be able to shape innovation or identify useful innovation any better than MSOs would by communicating directly with their vendors?
Leghorn: As for your question about the risks to cable from relying on a defined subset of vendors, you probably have in mind its reliance over the years on Scientific Atlanta and Motorola to provide set-tops. One of the purposes of organizing CableLabs was to set guidelines and specifications in order to open up the cable market to additional competing vendors. It took too long for this effort to bear fruit, but in today’s digital age, this role of CableLabs seems to be working quite well.
I distinctly recall that in the course of organizing CableLabs, I discussed the proposal with Sid Topol, then CEO of Scientific Atlanta. He endeavored to persuade me that such an activity was not necessary, saying in effect, “Just tell us what you need and we will develop it.” He asked me to visit Atlanta to review their R&D program in order to substantiate his point. I spent two days with them, but the experience in no way changed my mind regarding the necessity for an R&D consortium of cable operators. Some years later, Sid Topol recognized the value of CableLabs’ provision of guidelines and specifications in defining products with a relatively huge market. And when McCormick took over as CEO, he continued as an enthusiastic supporter of CableLabs.
CED: Can you explain how CableLabs might function as a common carrier (your third of three proposals offered for consideration), and why it could be necessary or useful to adopt that role? Why should CableLabs’ members fund this expansion of CableLabs’ responsibilities?
Leghorn: I distinctively have not recommended that cable function as a common carrier, but as a competitive carrier. It already does this to a significant extent. However, it might be advisable, in view of regulatory pressures, to offer common carrier services with limited performance capabilities. The cable industry has not yet adopted such an approach.
Although its so-called “walled garden”, which actually contravenes antitrust law, is crumbling, it has until now sometimes restricted access of independent program suppliers to cable’s distribution facilities. Such a policy might substantially and anti-competitively favor its own cable networks. If CableLabs functions as a competitive carrier, in my view antitrust law should accommodate cable operators favoring their own suppliers for 30 or 40 percent of its business. As you know, Comcast’s figure is approaching 30 percent, and they would like the FCC to increase this number.
Considering public policy trends is one thing; helping to shape and set those trends is another. The cable industry as a whole has a miserable record of communicating its value to the public, however. Because of this, the NCTA by necessity tends to be reactive. Is national messaging possible? Is it useful or necessary? If so, who should be responsible for conveying the message? What should the cable industry be saying to consumers?
Regarding your next question, this difficulty is changing as CableLabs either independently, or through NCTA, is getting its message out. As for what the cable industry should be saying to consumers, besides saying in effect, “We’re the greatest,” it can, should and does point out the major competition it now faces from a variety of suppliers.
CED: Did you ever spend $1,000,000 (or more) that you now wish you had back?
Leghorn: I presume you have stood up to the plate in baseball. If so, you know that if you want to hit an occasional homerun, you have to accept the fact that you will strike out frequently.
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