Televisionaries

Inside the Chaos and Innovation of the Digital Revolution

Marc L Tayer

• Publisher: MediaTech Publishing
• Year: 2015
• ISBN:
  9780986384516
• Edition: 1
• Topic: Tecnología e ingeniería
• Subtopic: Ingeniería eléctrica y telecomunicaciones

Televisionaries is the captivating inside story of the digital television revolution, featuring the engineers, entrepreneurs, and media titans who made it happen.During the 1980s, conventional wisdom held that "Japan Inc." would become the leading economic power, with its new HDTV technology dominating the next generation of consumer electronics. In response, European countries funded a billion-dollar HDTV activity designed to keep the Japanese at bay. But both solutions had a fatal flaw - they were based on analog technology.With the world's eyes diverted overseas, General Instrument (GI) harbored a secret project in its San Diego labs. The notion of transforming television from its analog roots to the zeros and ones of computers was deemed impossible at the time. Undaunted, GI boldly developed the world's first digital television system, upsetting the status quo on three continents. Digital TV soon became a reality for consumers throughout the world, and the media business was forever changed.

PART ONE

GLORY DAYS

1 FROM CAMBRIDGE TO CALIFORNIA

The field of digital television, as with analog television and computers, had its pioneers and innovators. In the case of digital TV, it started with a group of Massachusetts Institute of Technology (MIT) PhDs working for a mid-sized technology company in the seaside city of San Diego.

Jerry Heller was born in the Bronx and raised in Forest Hills, Queens. He and his two sisters were the offspring of a Manhattan restaurateur and a Pennsylvania coalminer’s daughter. In the 1950s, New York’s outer boroughs, just beyond the bridges and tunnels of Manhattan, combined an idyllic feel with a post-war optimism. It was at summer camp in the Berkshires of western Massachusetts where Heller became fascinated with ham radio, his introduction to communications technology.

The Heller family had an affinity for baseball, especially for the New York Giants before the storied team’s move to San Francisco in 1957. During the 1951 season, the Giants were trailing the Brooklyn Dodgers by 13½ games in the dog days of summer when manager Leo Durocher led them to a miraculous comeback, culminating in one of sports history’s most iconic moments. It happened on October 3, during the National League playoffs between the Giants and the Dodgers. Jerry Heller was in his family basement with friends watching a brand new, 12-inch, black-and-white DuMont TV when Giants’ outfielder Bobby Thomson hit the “Shot Heard ’Round the World.” Down four-to-two in the bottom of the ninth, Thomson’s three-run homer clinched the National League pennant for the Giants, leaving an indelible impression on ten-year-old Jerry.

Four decades later, Heller would deliver his own shot heard around the world, announcing a technology breakthrough in the field of television that galvanized corporations and governments in Japan, Europe, the United States, and around the globe.

Heller displayed an exceptional aptitude for science and math from an early age. A standout electrical engineering student at Syracuse University, he received a National Science Foundation fellowship and chose MIT over Stanford University for his graduate studies. At MIT he had to work overtime to catch up with his peers, most of whom had attended the school as undergraduates. By the time he selected Professor Irwin Jacobs, future co-founder and CEO of wireless technology leader Qualcomm, as his thesis adviser, Heller was hitting his academic stride. His thesis was on a groundbreaking aspect of digital communications.¹ But before Heller received his PhD in 1967, Jacobs had already departed for the West Coast, moving to La Jolla as a University of California, San Diego (UCSD) professor.

Upon receiving his doctorate, Heller accepted a job at Jet Propulsion Laboratory (JPL) in Pasadena, a research and development facility run by the California Institute of Technology (Caltech) for the National Aeronautics and Space Administration (NASA). These were the glory days of NASA, allowing him to work on free-ranging research into digital communications for unmanned spacecraft including the Ranger, the Pioneer, and the Voyager.

At the same time, Heller’s former thesis adviser, Irwin Jacobs, at UCSD, and Dr. Andrew Viterbi, a professor at University of California, Los Angeles (UCLA), founded Linkabit Corporation to develop digital communications products for US government agencies. Their third partner in Linkabit was Dr. Leonard Kleinrock, one of the nation’s most prominent computer scientists. Kleinrock was a father of computer networking, routing, and the ARPANET, which morphed into the Internet.

Andrew Viterbi received his bachelor’s and master’s degrees in electrical engineering from MIT. He then moved to California, where he worked at JPL and completed his PhD at the University of Southern California (USC). He left JPL in 1963 for a faculty position at UCLA. In 1967, he invented the Viterbi Algorithm for correcting errors in digital data transmissions. This technique became widely used for deep-space and satellite communications, modems, digital cell phones, and many other digital communications products and applications.

While at UCLA, Viterbi collaborated with Heller, who was still at JPL. Perhaps Heller’s most important contribution to space communications as a young engineer was the discovery of the performance of coded digital transmission. He was the first person to validate the power of forward error correction using sophisticated convolutional codes decoded by the Viterbi Algorithm. Until then, the algorithm was considered only a theoretical construct in applied mathematics. But Heller validated it for use in many real-world applications. This area would become critical later in Heller’s career at General Instrument, where he would apply digital communications techniques to television signals.

In 1969, Jacobs and Viterbi hired Jerry Heller as Linkabit’s first full-time engineer, and Kleinrock disengaged from Linkabit, remaining as a computer science professor at UCLA. But just as Heller was about to purchase a home near UCLA and Viterbi, Jacobs decided to leave UCSD and join Linkabit full-time as well, prompting Heller to move two hours south to San Diego to be at the new company’s headquarters. Viterbi later relocated to San Diego as well.

That singular twist of fate is why San Diego became a premier center for digital communications technology, with Linkabit as its fountainhead. The Linkabit engineers delivered on contracts with the Army, NASA, and the Air Force. Significantly, they developed one of the first digital modems with error correction (implemented on an early microcomputer), which was used by the Air Force for transmitting emergency action messages. Another project Heller worked on for NASA in the late 1970s, unknowingly presaging his future, was an early digital video compression system using mathematical transforms.

More than a brilliant engineer, Heller also had a keen eye for new business opportunities. In 1980 Linkabit was acquired by M/A-Com, a large East Coast microwave components company. When the San Diego M/A-Com Linkabit team found out in the early 1980s that Home Box Office (HBO) was seeking proposals for a satellite TV encryption system, Heller visited HBO in New York to find out more about their needs.

HBO had started electronic delivery of programming in the early 1970s using microwave relays, but then made television history on September 30, 1975, by broadcasting via satellite the “Thrilla in Manila,” the third and final boxing match between Muhammad Ali and Joe Frazier. This event marked the beginning of the satellite television era, and HBO became the first programming service to continuously deliver its content via satellite. HBO soon became alarmed that an increasing number of homes with satellite dishes were intercepting its programming for free, and so now the company intended to secure its content delivery.

When the HBO technology and operations team of Ed Horowitz, Paul Heimbach, and Bob Zitter met Jerry Heller, they discerned something in him and his San Diego M/A-Com group that the logical choices, the existing cable TV equipment companies such as General Instrument and Scientific Atlanta, lacked: a world-class expertise in the emerging field of digital communications.

Heller also had an uncanny ability to spot and recruit top-notch technical talent. His philosophy toward hiring engineers reflected the Linkabit culture: recruit the smartest people you can find and then figure out what to do with them. On a 1978 recruiting mission to his alma mater, MIT, he met a new PhD candidate named Woo Paik .

A native of South Korea, Woo Paik was born to be an engineer. As a toddler he was fascinated with trucks, trains, and railroad tracks. In junior high school he built his first radio, and then moved from crystal to vacuum tube to transistor to ham radio, constantly tinkering, playing, and improving.

Paik obtained his bachelor’s and master’s degrees in electrical engineering from Seoul National University before applying to several PhD programs in electrical engineering. MIT responded first, with an acceptance, but Paik had recently married and Korea had an obscure law requiring a wife to wait six months before joining her husband overseas. So he enrolled in Seoul’s PhD program, living with his bride at his parents’ home to save money. This situation proved too difficult, however, and he moved to MIT in Cambridge, Massachusetts in September 1974, with his wife joining him there several months later.

When Heller met Paik at MIT four years later, he was impressed with the younger man’s intelligence and expertise in digital communications, inviting him to San Diego to meet the Linkabit team. The New England blizzard of ’78 was one for the record books, some calling it the storm of the century. Paik visited San Diego that April, greeted by its perfect climate. Combined with the opportunity to work with renowned digital communications technologists such as Irwin Jacobs, Andrew Viterbi, and Jerry Heller, the job offer was too good to pass up.

Paik’s first project was a satellite modem, followed by a spacecraft modem for JPL. Just before Christmas in 1981, Heller called Paik into his office and described a new opportunity with HBO: to encrypt the pay TV company’s satellite signals so the rapidly growing base of home dish owners couldn’t receive its signals for free. Many other companies were already in the running, and Linkabit was known for digital communications, not television. In fact, Paik’s knowledge of TV and video was so rudimentary that he purchased an introductory book on how to fix a color TV, teaching himself the basics of line scanning and signal timing information. Someone within M/A-Com had assembled a competitive analysis document, summarizing the established pay TV security systems of General Instrument, Scientific Atlanta, and others. Heller and Paik knew they had to come up with a novel idea to have a shot at HBO’s business.

By the time the two men visited Paul Heimbach again at HBO in New York, Paik had crafted the idea of digitizing the audio and inserting it inside the vertical blanking interval of the video signal.² Heller had devised a forward error correction code to allow error-free transmission. They brought in a young M/A-Com engineer and audio expert named Kent Walker to ensure that the digital audio compression scheme resulted in good sound quality. The video was still analog, but the digital audio innovation perhaps served as a precursor to an all-digital future. HBO loved the proposal, intrigued by its digital aspects, but wanted to see some working hardware. On the spot, Heller committed Paik to the seemingly impossible delivery date of April for a working prototype, which Paik and his small team miraculously met. M/A-Com was awarded the HBO contract and found itself suddenly in the entertainment business.

Another one of Heller’s exceptional recruits was Paul Moroney . Moroney was a gifted high school math and science student in Wenham, Massachusetts, 20 miles north of Cambridge. When he interviewed at MIT, the admissions officer warned him that he had three strikes against him: he was male, he was Caucasian, and he was local. Despite these obstacles, Moroney was accepted by MIT and matriculated in the fall of 1970.

Nine years later, when he was graduating from the school’s PhD program, he was interviewed by Linkabit’s Jerry Heller on the MIT campus. Impressed with the quality of the MIT alumni who had already gone to work at Linkabit, including Woo Paik, Moroney visited San Diego. He recalls Heller being dressed casually in short sleeves, relaxed and confident with a golden California tan. Heller was impressed by Moroney and offered him a job. Ironically, Moroney had a competing job offer from M/A-Com on the East Coast, but his father, also an engineer, was a M/A-Com employee. Not wanting to join his dad’s company, he accepted Heller’s offer at Linkabit and moved to San Diego. A month later, M/A-Com acquired Linkabit and the two Moroneys, father and son, were employed by the same company after all, although on opposite coasts.

During his first few years, Moroney worked as a development engineer on various projects including a satellite communications modem for JPL and a military modem for the armed services. Then one day in 1982, Heller called him into his office with a new assignment: to be project engineer for the company’s new VideoCipher satellite television encryption contract with HBO.

2 GORILLA IN MANHATTAN

The Wharton School of the University of Pennsylvania was a hotbed of budding capitalists in the mid-1980s. The economy had recovered strongly from the deep recession of 1981–1982 after Fed Chairman Paul Volcker cranked up interest rates to 20 percent in order to halt runaway inflation. Michael Milken and Ivan Boesky reigned over Wall Street, creating financial castles out of junk bonds and arbitrage. Some Wharton graduates would take jobs at General Electric, Hewlett-Packard, and Intel; others would enter health care, consumer product marketing, and real estate. But Goldman Sachs, Morgan Stanley, and McKinsey & Company were the biggest draws, dangling six-figure bait adorned with perceived glamour to the newly minted MBAs.

I was attending Wharton, having worked in the Wall Street financial community between college and graduate school. I didn’t want to go back to that world. My summer job in between years at Wharton was with a venture capital firm, and my eventual goal was to return to that area. But this was still a time when successful venture capitalists needed technology and product backgrounds, before the field was overrun with ex-bankers, and I wanted to first gain experience with a technology company developing new products and markets. During my last days at Wharton, when Rick Friedland recruited me into his corporate finance group at General Instrument Corporation, just outside Manhattan, it seemed like a good fit.

General Instrument (GI), a Fortune 500 technology conglomerate, was widely followed by Wall Street under the ticker symbol GRL. The traders and brokers affectionately referred to the company as “the gorilla,” more due to the stock’s erratic pricing behavior than a creative pronunciation of its trading symbol. GRL was a high beta stock, rapidly climbing up or down depending on which and how many of its seventeen separate businesses were hot or cold at any given time.

Before accepting Friedland’s offer, I called a well-known stock analyst at Merrill Lynch who followed GI and asked him what he thought. His recommendation was, “Go for it; GI’s an exciting company and there will be big changes, lots of asset sales and acquisitions.” By the summer of 1985 I was living back in Manhattan.

There were some other MBAs already working in GI’s corporate finance and treasury areas: Dave Robinson, a New Englander who had been on the ski team at Bates College before getting his MBA at Dartmouth’s Tuck School; Paul Clough, a Harvard Business School graduate; and Dan Moloney, a University of Michigan engineer with an MBA from the University of Chicago. John Burke, an Ohio State alumnus, also joined the corporate office at the same time. The basic idea of Rick Friedland’s program for these young, eager MBAs was for them to obtain a bird’s-eye view of the company as a whole, and then in two or three years get placed at one of the operating divisions.

The three MBAs who preceded me, Robinson, Clough, and Moloney, all moved to suburban Philadelphia the next year to join the Jerrold Division, the leading broadband equipment supplier to the cable industry. Friedland got a big promotion within the corporate finance organization, and I moved into the Manhattan headquarters office for a strategic planning role, perfect for me because I had become much more interested in strategy and marketing than finance. Plus my Manhattan apartment was a mere ten-minute walk from GI’s corporate headquarters on the forty-fifth floor of the GM Building, situated on the southeast corner of Central Park at Fifth Avenue and 59th Street. In 1987, Dan Sutorius, a classmate at Wharton, joined the strategic planning group as well. We helped the top corporate officers with whatever they needed, including special projects with operating divisions, and mergers, acquisitions, and divestitures.

In the dog days of summer, 1986, an intriguing new project came across my desk: GI’s chairman and CEO, Frank Hickey, was proposing to buy M/A-Com’s Cable Home Communications group. Hickey had wanted to team up with Frank Drendel, M/A-Com’s top cable TV executive, for years. It was a perfect strategic fit, the numbers looked good, and everyone was in favor of doing the deal. When GI acquired the business for $220 million in September 1986, it suddenly felt like a much more exciting company.

Of the four business units acquired as M/A-Com Cable Home Communications Corp., the one that especially intrigued me was based in San Diego, the upstart VideoCipher Division. This business had emerged from the Linkabit Corporation of Irwin Jacobs, Andrew Viterbi, and Jerry Heller, inheriting a deep strain of its technical DNA. After HBO and Showtime adopted this division’s VideoCipher pay TV satellite encryption system, many of the other leading programmers followed suit, and the business was growing by leaps and bounds.

I had only been to San Diego once before, but having grown up in the San Francisco Bay ...

Table of contents

• Cover
• Title Page
• Copyright
• Author’s Note
• Dedication
• Acknowledgements
• Contents
• Prologue
• Part One: Glory Days
• Part Two: The Sprint and The Marathon
• Part Three: The Internet and HDTV
• Part Four: Where are We and where are We Going?
• Epilogue
• Technical Glossary and Acronyms
• Notes
• Index
• About the Author