The Hougen Group of Companies - A Yukon Tradition
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Distant Signals

Originally published in Cablecaster, November 2002

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Cablecaster Cover THE TEAM OF CANADIAN CABLE operators early on were generally clustered near the U.S. border, within a hundred miles or so, wherever you could get a decent signal from a tall antenna. While Canadian broadcasters had launched in places like Edmonton and St. John's, it was tough for residents to justify paying a cable company to distribute the same signals anyone could pull in for free with their own antenna or rabbit ears.


JR Shaw grew up in Sarnia. The family business was - and still is - pipe coating (JR's brother Les is still the chair of ShawCor). The family had more than a passing interest in cable television, however, even when JR was a boy. Francis Shaw was an early investor of Harry Anderson's, the car radio installer and repairman who visited Pottsville, Pa. with Ed Jarmain in 1951.


Shortly after Jarmain got his tiny system running, Anderson established his own, and would come to run systems in Woodstock, part of London, and Ingersoll. "He looked at a lot of towns," says Shaw. "I remember in the '50s driving around with he and my dad looking at St. Thomas and Woodstock and St. Mary's and Strathroy and all those areas, small towns which you could then put up an antenna, and reach some signals out of the U.S."


After graduating from Michigan State, JR worked in Hamilton for the pipe-coating business for a while and was soon dispatched west to set up that business. While establishing the family business there was straightforward enough, Shaw suffered a bit of culture shock. Growing up in Sarnia, attending Michigan State in East Lansing and then working in Hamilton and Toronto, all were within easy reach of American TV. Not so in Edmonton.


"When I was a kid, the first TV program ever watched was the Lone Ranger, in a neighbour's house where the signal had come out of Detroit, so we always had American signals," he recalls in a recent interview. "Then in '60, '61, I moved to Edmonton, and all we had was CTV which was just starting up, and whatever CBC was offering, I guess French and English - so I had two channels." "I felt a pretty deprived puppy with that choice of television."

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Shaw spent close to five years getting what was then called Shaw Industries established in Edmonton (the company is the world-leader in pipe-coating), all the while irritated over his poor TV selection and hopeful to someday do something about it. In 1965, he set up a company to begin to earnestly pursue cable television for Edmonton and would get a license for half the town, but the biggest antenna in the world still couldn't pull American broadcast signals that far.


So, Shaw turned his attention back east. "There was only one technology to bring TV that far at that time, and it was microwave, and you know, the BBG just had no interest whatsoever, none, I couldn't even get to first base", he says. Instead, Shaw went back to London to buy out Harry Anderson and his other partners, swapping a local office building to lawyer Joe Jeffries in exchange for his piece of Anderson's cable system. "I remember (Jeffries) telling me at that time, 'young man, you'll never get cable television into Edmonton - the government will never allow you to bring cable there, and furthermore, cable television is a passing fad, the real value is in real estate, and ownership of buildings' ", says Shaw. "He didn't make me feel good, I can tell you that. It was a pretty empty feeling. But in any case, we persisted."


Michael Hind-Smith
Former CCTA president Michael Hind-Smith addresses the Calgary convention in 1977
Photo courtesy Michael Hind-Smith
The notorious Department of Transport's BBG would not allow cable operators of the day to use microwave technology to haul American signals farther than they would extend with their regular broadcast gear. As was usual then, the BBG sided with the local broadcaster, "who used to fear any possible kind of increase in competition", says Michael Hind-Smith, who was the CCTA president from 1975 to 1990, and whose history in the television industry dates back to the launch of CBC, as he was one of the first CBC-TV employees in Toronto in 1952.


Anyone beyond the outer limits of the last broadcast contour of the U.S. stations, especially westerners, began to feel like second-class television citizens. Even some other cable operators opposed microwave, likely fearing competition or perhaps happy with their big towers and not wanting to upgrade their own transmission facilities.


Albertans like Shaw and Jack Davis, owner of Calgary's Community Antenna Television Inc. led this particular battle. "Alberta was very, very good battleground for that one because of the lively entrepreneurship of the Alberta culture, " says Hind-Smith. "Steadfastly, for one blind reason or another, (the BBG was) in strong opposition to the use of microwave to feed signals to Calgary-based cable systems and other systems throughout our land, " writes Thomas in Vision of the Pioneers. "Not only the bureaucrats but even some outstanding engineers and certain forerunners of a number of large present-day MSOs, most actively opposed the granting of microwave licenses for CATV services in those early days."

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Bob Short

Bob Short
Photo courtesy WHTV
In fact, when a hearing was conducted to consider microwave licenses for CATV operators, none of the distant cable operators were even invited to state their case and when Davis caught wind of this, was told he wouldn't be allowed in the room. The BBG relented when Davis' MP Eldon Williams got involved and invited him as his guest. The Calgary cabler spoke for an hour, even though he was originally granted just five minutes.


Finally, in 1968, just before the CRTC came into power, BBG member Andrew Stewart was quoted saying "we can't leave the west in isolation forever, they have been held off far too long already.", says Vision of the Pioneer. In 1970, Davis and David Graham who owned the other half of Calgary with Calgary Cable TV, began showing cable customers CBS and PBS, since their initial microwave licenses only allowed them to transport one commercial and one non-commercial channel.


However, another distant signal battle was about to warm up.



HOCKEY HALL OF FAMER Neil Colville played for the New York Rangers from 1936 to 1949, not including his service during World War II. He coached for a bit after his playing career but then returned to Canada and soon heard of cable television as an investment opportunity. He was the primary early investors in the company that would eventually become Northern Television Systems, WHTV, in Whitehorse, Yukon.


Colville's men on the ground in Whitehorse in the late '50s, however, had trouble making it work, recalls Rolf Hougen, the present owner of WHTV (and numerous other businesses in the town, including a mall and the local radio station). Hougen was interested in cable in 1956 when he went to investigate a new system in Ketchikan, Alaska. However, after analyzing the cost of bringing CATV to Whitehorse, decided too few people there would pay what was required to fund it, namely a $250 connection fee and $15 a month for four channels. Hougen decided to come on board only as a minority investor, hoping to benefit since his department store stocked TV sets.

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Neil Colville

Former NHL great Neil Colville, an early investor in Northern Television Systems, WHTV, is shown getting ready to read the news in 1960.
Photo courtesy WHTV
Click for larger view.
Colville and his group pushed on but the former defenseman and his partner Bert Whybrew had to take everything over when one of their early Whitehorse-based partners committed suicide and the other moved. Since Colville was the major investor at the time and wanted to rescue his investment, he moved north from his Vancouver home. "He slept in a bunk in the studio and learned how to climb poles. He was sort of a one man show for a period of time, " says Hougen of Colville, who died in 1987.


Sometimes the system was active only four hours a day where one of the four channels was a broadcast of people going about their business in downtown Whitehorse, or better still, a live goldfish bowl with some background music, called Rippling Rhythms, (talk about your niche channels!). None of the four channels were exactly broadcast television. The programming involved some events like local sports and news (Colville himself did some of the early newsreading, getting his material via short wave radio), even call-in shows.


In 1966, when Hougen bought control, there was still nothing yet available off-air and the satellite age had not begun. WHTV played films and CBC kinescopes of its programs, "but we got the signals out there," he says. "The difficulty was they were six months old - we celebrated Christmas in June."


Later, WHTV began recording BCTV and Bellingham's KVOS in a Vancouver studio and flying tapes north with shows that were now only days old, and news programs shown within 24 hours, which cost WHTV about $40,000 a year. This also raised a copyright question however, and Ray Peters, then president of BCTV, called Hougen to Vancouver for a meeting. "He told me in no uncertain terms that we had to discontinue," says Hougen. But right after the meeting, "one of his aides took me aside and said, you know, he had to do that because of the uncertainty of copyright, but really he is quite delighted to see BCTV distributed in the Yukon."


Hougen's engineer, Rod Wheeler, who recently retired from WHTV, had a penchant for innovative technology. With 19 hours of night during the winter and temperatures regularly in the 40- to 50-below range, the company's early amplifiers would freeze. To remedy this inexpensively, the company rigged up some wooden boxes, each complete with an interior light bulb. "People couldn't figure out these boxes. They could see lights, but it was enough heat to keep the amplifiers from failing."

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Wheeler had the idea in the mid- '70s to build his own satellite dish, to pull in the programming that most of the U.S., and all Canadians within reach of microwave systems could already see in real time. Jumping up and down of sheets of aluminium in the back of a pickup, he created the curvature of a dish and attached it to a wooden frame. Adding the requisite electronics brought in satellite signals albeit illegally.


While this was going on up north, Telesat Canada had lunched the world's first commercial communications satellite in 1972 - even though private ownership of "earth stations" was still against the law in Canada. Then in 1975 HBO, which would be the vehicle to drive American cable penetration, took off.


Seeing all of this while he was still flying in programming for his customers Hougen, with Wheeler's help, began to draft his "Down to Earth" proposal in 1977 - the basis for what would become Canadian Satellite Communications, or Cancom. Hougen first presented the idea to his fellow cable operators at a CCTA board lunch in August 1979. They seemed intrigued but balked at the idea of the cable industry backing it. Undeterred, Hougen recruited BCTV's Peters, Western International Communications' (WIC) Charles Allard, Selkirk Communications' Stuart McKay and, a bit later, Telemedia's Phillippe de Gaspe Beaubien and founded Cancom.


The first public airing of the proposal was at a meeting in Whitehorse in 1979 chaired by commissioner Real Therrien, who about a year earlier had authored a report that revealed how poorly remote Canadians were being served by television. While Canadians in the country's 24 largest cities had access to at least 12 channels, there remained about 1.8 million who had little or no television. Many pilfered U.S. satellite signals with huge dishes instead, said Therrien's report.


celebration

On July 15, 1981, WHTV in Whitehorse became the first cable company to receive a satellite signal from Cancom. Margaret and Rolf Hougen, left, watch looking on with son Craig and Erik uncork a bottle of Champagne to celebrate.
Photo courtesy Rolf Hougen
Click for larger view.
The Cancom plan was to uplink seven radio stations and four TV channels, BCTV (Vancouver), CHCH (Hamilton), CITV (Edmonton) and CFTM (Montreal) and the company got its license in 1981 (beating out a competing application by former CCL CEO Teo Jarmain), after promising in the hearing it would be up and running in 90 days. WHTV was the first customer, exactly 90 days after license approval.


However, the Commission required that cable companies first obtain earth station licenses before they could use Cancom's signal but was extraordinarily slow to process those licenses, says Hougen. Cancom had a start-up cost in the neighbourhood of $40 million and almost no income as it waited for the CRTC to process the licenses.


If Hougen had to do it over again, "I would have gone to the government of the day and said, we did our duty, we put out signal up in 90 days. You're not doing yours in licensing and I would have pulled the signal down, which some of our directors urged me to do, "he says. "I guess pride got in the way in my case and I said, we made a commitment, we'll stick with it." The decision cost him $10 million.

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Hougen's fellow cable operators, however, say they are indebted to his vision. "He's the guy that was pushing this like mad," says Fred Wagman, who retired as president of Access Communications (formerly Cable Regina) in 2000 after 25 years there. "Rolf was saying, why can't we do this? Why can't we have it? My (customers) live way up in northern Canada...why can't we have the same thing as Toronto? They may have say there are others who created (Cancom). I can tell you it was Rolf Hougen, who was the big push to get it going."


"The delivery of signals by satellite was the biggest moment in cable", adds Irving Schwartz, founder and president of Seaside Cable, Glace Bay, N.S. "It allowed us to expand and grow. That was the biggest thing of all. Without a doubt."


"By 1982, when we switched to satellite reception, McKenzie (Media Ltd.) was generating sales of about $400,000 a year, and that's when growth really began to take off, with subscribers' revenues jumping 15% to 30% year to year," adds Ron Williams, the current CRTC commissioner who worked for MacKenzie Media, Yellowknife, NWT., for 18 years until its sale to Northwestel in 1996.

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Hougen was forced to sell much of his Cancom ownership to BCTV, which became the company's main shareholder. Without the sale, his debt, says Hougen, "would have virtually destroyed me after 40 years of builing my other enterprises. "Every meeting early in Cancom's life was a debate to answer one question - would Cancom survive?


Gary Kain, chairman of what is now Persona Inc., formerly Regional Cablesystems, formerly C1 Cable, says it was extremely tough financial sledding when he arrived at Cancom in January of 1984 as vice-president of finance. It had just gone public to raise funds but at the company's core, "the monthly revenue was about $500 000, and the monthly expenses were somewhere between a million and a million-and-a-half dollars," says Kain. "And the problems with getting expenses down was that three-quarters of a million of those expenses were payments to Telesat Canada to lease satellite capacity ... and they were tariffed by the CRTC, so you couldn't do a lot with that."


The company cut expenses to the bone and after successfully lobbying the CRTC to be able to deliver American broadcasters ABC, NBC, CBS and PBS in 1983, gradually set about replacing cable's microwave-delivered signals with satellite transport. But the company still needed more revenue so Cancom got into the cable business by pursuing licenses in areas where there was yet no cable, but with local partners. Phil Keeping was a partner in Newfoundland, Oakville-based Cablenet, run by Ben Torchinsky and Stan Stewart (who is now CEO of Amtelecom) was the partner in Ontario, says Kain. Yuill was its partner out west.


Among the cable operators who were not his partners, there was raucous opposition to Kain's C1 concept as he went across the country obtaining licenses. They adamantly fought his upstart - a signal supplier controller by broadcasters no less - they wanted to get into cable, too. "I had kind of a canned spiel as to why I needed certain things, " says Kain of his Commission pitch. "I used that same speecher throughout the country and quantified it so it sounded very scientific and mathematical. And generally I faced great opposition from local cable companies.


"My perception of cable in the early days was that a lot of people who got cable licenses were fairly plugged in politically ... I mean, I can remember 11 o'clock one night in a hearing, (then-Commissioner) Jim Robson turning red-faced when some cable operator in Newfoundland said that "CRTC stands for nothing but Canadian Rubber Stamp for Cancom' or something like that," says Kain. "Charlie Keating called (then Cancom v-p) Ted Boyle a snake-oil salesman. Danny Williams at one CCTA convention - after we got out licenses - told the industry that Cancom was the biggest fish you could fry in the indursty," he adds, referring to the former owner of Cable Atlantic (Williams) who is now the leader of the Newfoundland Progressive Conservative party (and likely the next premier, if polls are correct) and the former owner of Dartmouth's Access Communications (Keating) who is a well-known Liberal.

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One year, says Kain, he was called by the CCTA and told his company was not welcome at the annual convention.


But, once C1 was granted licenses to 151 Newfoundland communities later in 1984, there was no going back and Kain won numerous other licenses and began to buy up other small operators, all of whom provided Cancom with a lifeline of revenue. By the late '80s, the company then called C1 Cable Systems, held over 500 licenses in Canada, all paying Cancom for their signals. "If it wasn't for this company, Cancom wouldn't exist, " Kain told Cablecaster in March of 2000. Since Cancom and its broadcasters-dominated board didn't really want to have a cable company and never sunk much money into C1, Kain eventually left to run this regional cable company by itself. He bought out his partners, went public and grew the business (although not without almost losing it all during an ill-timed foray into the States) into Regional Cablesystems, now Persona, and recently bought control of an international system built by a former partner, Phil Keeping's Cable Bahamas.

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