Whitehead Panel

Library of Congress

January 11, 2013

“Significance”

Leading off, my purpose is to discuss the significance of Tom Whitehead’s career; in short, why should anyone want to read his papers? While he had many accomplishments, I want to focus on the ones that not only had a profound influence at the time, but also made a contribution from which we benefit today – it turns out that all of those accomplishments involved video services, although they had an impact on other telecom services as well.

When Tom entered government in 1968, the telecom world had essentially one telephone company with earth-bound wires and towers that provided, among other things, carriage of video signals over long distances – distances that imposed great costs particularly since video required a lot of bandwidth – it was so expensive to have a national TV broadcast network that only three companies did. There were also, of course, many local TV broadcast stations and “community antenna” cable TV companies that retransmitted those signals – state of the art was a 12-channel cable system.

Contrast that world with the world we have today – a world of a profusion of program channels offered from a variety of sources, through a variety of technologies, representing many viewpoints. A world in which new technology is welcome and new competitors, if not completely welcomed by incumbents, are at least the goal of policymakers. I’m not saying that Tom Whitehead is responsible for this sea change. Or maybe I am – you decide.

Like Archimedes' proverbial lever, with which, if he had a place to stand, he could move the Earth, Tom’s lever to move the telecom world was communications satellite technology – in fact, most of his successes and lasting contributions had to do with satellite technology.

Satellite technology was the ideal “disruptive” technology for its time; it solved most, if not all, of the problems that tied us to the constricted telecom world of 1968. A communications satellite is like a very tall radio tower – any place on the globe that “see” the satellite can transmit to it or receive from it and it has a lot of bandwidth – it can carry lots of TV signals at a relatively low-cost.

Whitehead perceived the suitability of satellite technology for the tasks that he had in mind, which were no less than opening up the telecom industry to new TV program voices, new opportunities for competition, and new services for consumers.

To do this, he started with a very simple idea -“open skies” – a policy that held that any technically & financially qualified company could launch and operate a communications satellite and offer interconnection services.

In one stroke, adoption of this policy led to the entry of new satellite carriers and, because of competition, nationwide connections were affordable for companies creating new cable program networks like HBO & ESPN & MTV and Ted Turner. And it inspired entirely new network concepts such as C- SPAN. Soon cable offered much more than retransmitted TV broadcast signals and cable companies expanded channel capacity to carry the new programming. Today, broadcast networks brag that their original programming is as good as cable’s, which is a far cry from CATV signal retransmission days.

The unqualified success of open skies had much broader significance beyond the TV world – it helped prove the hitherto radical notion that a competitive telecom marketplace could deliver much more to consumers than a regulated one.

Once outside of government, Whitehead put a further spin on satellite technology with his Hughes Galaxy cable shopping center idea. Instead of offering satellite time on a circuit-by-circuit, first-come-first served basis, he dedicated an entire satellite to the most attractive program networks so that cable operators could use one dish to pick up the best networks. That was not only cheaper & easier for cable operators, it added enormous value to the satellite capacity itself. All the programmers wanted to be on the “hot bird” and they paid a premium for that honor. The satellite was no longer just a delivery pipe, it was itself a programming resource with value greater than the sum of its transponder parts.

Tom carried this value proposition and the disruptive potential of satellites one step further with the Coronet/Astra project for Europe, which completely overturned the established order of state-run broadcast services and relied on private enterprise and commercial program services to give the public in Europe a new kind of television.

So let’s go back to Tom’s simple idea of “open skies.” The idea was critical but the idea alone did not lead to the revolution we have witnessed over the past four decades. Before there was the idea, there was Tom’s commitment to change. And then, there was Archimedes’ “place to stand on,” to leverage that idea – for Tom, the place to stand was his position of influence – for open skies it was the White House, for Galaxy it was being CEO of the retail services arm of Hughes, the leading satellite manufacturer, and, for Astra, at least initially, it was being the chosen instrument of the Duchy of Luxembourg which was committed to carving out a place for itself in the video world.

And to this “perfect storm” of commitment to change, a simple but powerful idea, and a position of influence, we have to add another factor – Tom’s dogged dedication in pursuing change, his willingness to take a risk for change – in short, his courage. That quality always has been in short supply among our policymakers, but Tom had a ton of it and it made all the difference in achieving his success.

So on that note, let me go back to the question I opened with. What is his significance? Is Tom Whitehead responsible for the telecom world we have today with its abundance of choice?

Let’s answer with a “thought experiment.” What if satellite technology hadn’t developed? Just never existed – no low cost, high-capacity nationwide and worldwide networking. Would we have cable networks, public affairs networks, international networks? I think not.

Next experiment, we have satellites but no Tom Whitehead, no “open skies.” In that case we would have had a monopoly satellite provider in the US, just like we had internationally with Intelsat – that was the policy alternative that “open skies” defeated. Would we have had the same abundance of choice and innovation with a monopoly industry model? I think not. Would we have a cable industry competing with telephone companies? Again, I think not.

The telecom world we have today was not inevitable, change itself is not inevitable –people make a difference – Tom Whitehead made a difference.