Interview Date: December 4, 2015
Interviewer: Seth Arenstein
SETH ARENSTEIN: Hi, I’m Seth Arenstein. I am here in New York City. It’s December, 2015. We’re here for the Hauser Oral History Project of the Cable Center, and I’m here with Michael Adams, who is a longtime telecom executive, most recently with Rogers. Mike, welcome. Welcome to New York.
MICHAEL ADAMS: Thank you, Seth. I want to start with saying thank you for having me and thanks for the honor of being able to provide this little history, at least the last thirty-five years of my life.
ARENSTEIN: You worked a lot in Canada but you’ve also worked all over the world. You have some great stories, which we are going to get into. You were born in the United States, correct?
ADAMS: Yes, born in Cambridge, Mass. Grew up in Watertown, went to school in Boston. Went to grad school in Cambridge, so I didn’t go far from home to school. I haven’t been back since.
ARENSTEIN: Really. But you’re still a Patriots fan.
ADAMS: Still a Patriots fan, still a Red Sox fan, and a Blue Jays fan. I was born and raised there, I went to school there, went to graduate school at MIT. I’m one of twelve kids in my family, my mom’s from Italy, my dad’s Lithuanian. It’s a big family so by the time they got to me, it was up to me to pay for school. So I got funding at MIT and I was fortunate enough to get Professor Einstein as an advisor, which was a humbling experience because—I’m still struggling as you can see with English. He’s mastered twelve languages and it was great to work with such a smart and nice person and great opportunity. I was going off through graduate school in an engineering career. I was studying finite element theory and writing software to use computers to model real life systems, nothing even close to or adjacent to cable TV. Because I was married and we had a child while I was in grad school, I worked in the summer to make some money to pay for diapers. And I worked at a family business, the McCourt Construction Company, which was founded by Frank McCourt, Sr., who came over from Ireland. So a family business; my dad was there working with them. I worked in the summer to make ends meet. Then when I was finished with grad school, I was off to pursue my career. I got a job on the West Coast, and then David McCourt’s son, Frank, Sr., convinced me to stay and help them with cable.
The company was based in Boston and working with Chuck Dolan and helping to build the system in Boston, which I think at the time was the largest underground urban build in the industry. This would have been 1980-1981. That was kind of a forte of the McCourt companies. They were a design-build kind of company. So I got exposed to that through them and David was able to convince me to stay. I worked with him for the next twenty-two years in several countries and several different capacities. It was an interesting twenty years.
ARENSTEIN: So the lesson is, kids, get a summer job—you never know where it’s going to lead.
ADAMS: You never know, you never know. And I think to a large degree school is about learning to learn. And that’s what it was. That was a great experience by itself but that’s how I got connected with communications and cable. Not purely cable TV but that was a big part of it. Then we went on to build in California, the Sacramento system, which was also a large underground build, so that became kind of a niche that we had and that kind of brought us, as we’ll talk about, to the UK. That was the start of it. David’s a character—the epitome of entrepreneurial people—goes 100 miles an hour, spits out a lot of ideas, some good ones amongst some not so great. I was kind of the filter a little bit, I think, for him.
ARENSTEIN: Do you have any good stories you want to tell about him?
ADAMS: About David? So I was married with our first son a bit earlier. David was single a bit longer. I came into work on a weekend, brought my son to work and I was busy and I could hear a bunch of commotion. So David was taking my son around the office in a cardboard box with a roll of toilet paper behind him. And I said, “David, you know, you obviously don’t have kids—it’s not something you want to teach kids to do. They might do it on their own, but it’s not something you want to show them. I can’t take him home learning that.”
No, David was a great guy and he went 100 miles an hour and he was behind a lot of what we are going to talk about in the next half hour or so.
ARENSTEIN: Let’s get back to Professor Einstein. That’s not Albert Einstein, that was a relative of his.
ADAMS: So it’s Herbert Einstein, a descendant of Albert and looked just the same: white hair, white shirt, disheveled, brilliant person. Very good person, very nice person. He took me under his wing. When he told me I was accepted, I said, “I don’t have the money to come.” And he said, “What do you mean? You got accepted. You have to come.” I said, “No, I can’t afford to come.” Because I had undergraduate bills. He said, “Look, I’ve got a research assistantship.” He called me back. “I’ve got an RA for you, that’s half the tuition and a little stipend.” And I said, “OK. I’ve got to find the other half.” He called me back and said, “OK, I have a half RA and a half TA, that’s all your tuition and a stipend. Will you come now?” And I said, “Yes, I’m in.” But it was great. He was great and that was a great experience.
I became nocturnal because I was doing work on the supercomputer. I’d be up from like from 11:00 at night till like 4:00 in the morning and I was a teaching assistant and doing my research so it was a pretty big workload. Then when we had our son, that was tricky. So my son was cared for by a friend who was getting his doctorate, who was from China. So my son—by his wife who came over with him—they didn’t let them bring their daughter so his wife said, “I can take care of your son.” We were in married housing so my son’s first language was Mandarin. That was a little embarrassing when I took him to the doctor for his first checkup and I said, “He’s not speaking English.” He said, “That’s all right; he’s still young.” I said, “He speaks Mandarin.” He said, “Oh, that’s weird.” I said, “You’ve got to tell me it’s not a problem because my wife will be really upset if I come back with bad news because she’s already embarrassed.” He said, “It’s a problem because now you need to learn to speak Chinese.” I said, “Well, if that’s the worst, I guess I can handle that.”
But no, it was a great experience, a bunch of super-smart people. Two types of people at MIT and other schools of that ilk: people that are just naturally brilliant (I’m not in that bucket), and then people that work really hard to get by, more the latter. But it was a great experience and I did well and I got a scholarship for my doctorate studies, which I didn’t end up completing because we ended up having a child and I needed to go out and work. But anyway, still a great experience and a great institution and I’m an officer with them in the Toronto chapter.
ARENSTEIN: So you have your Master’s degree, your MS from MIT. You get this summer job that turns into a lifelong type of job. Tell me about some of the stops along the way. I know there were some international ones and building systems all over the world and meeting some interesting people.
ADAMS: So we obviously did the project for Cablevision and then during the 80s, the telecom industry became less regulated and in the business of designing engineering and building networks, we got involved with that, did a lot of work in bypass networks. We built some networks for private institutions—banks and the like—for digital equipment in the Boston area. We became pretty proficient in the network design. Then we said maybe we can do this bypass on our own. The _____________________ industry kind of started to sprout up and we ended up partnering with Metropolitan Fiber Systems in the Boston market in a joint venture to build. So I became part of that team as the lead operations person in that market. So we learned a bit about high speed data, we learned a bit about commercial, which was not something that the cable industry typically at the time had much exposure to. Learned about fiber optics and high speed networking, which was great experience. And then David was kind of connected in lots of ways and he had during part of his tenure, I think, at Georgetown worked a bit with Tip O’Neill when Tip was Speaker of the House. So the White House contacted David, said, “It’s time for you to do us a favor.” Because we had this nonprofit group, Discovery Foundation, and this was at the time when Grenada, there was a bit of turmoil in Grenada. So they told us that it would be a great idea if we would go to Grenada and help rebuild the television infrastructure in Grenada. So apparently during the intervention—not apparently, but during the intervention, the television studio and all the infrastructure unfortunately I think some of the people were destroyed. David accepted the mission of going to Grenada to fix this and he said, “Mike, you need to go.”
So we got some help from the National Association of Broadcasters and some folks from Channel 8 in Maine, and we went down to kind of set up a team and rebuild everything. Like I mean everything. So that was an interesting experience. And one night I got back to the hotel room and my briefcase had been cut in half and nothing had been taken. They didn’t take any money, they didn’t take any expensive equipment that we had there. So I talked to some of the local people in Grenada because we were working close with the prime minister and his cabinet and I said, “I don’t know what happened.” They said, “We don’t know what happened either. But it could be that the KGB was trying to figure out who you were or could be that your own people were confirming, you know the Secret Service were confirming who you were. Or it could be the military police trying to figure it out and if it’s your own people, you’re on your own. The KGB can’t help you.” So he said, “I’ll do this. I’ll give you a military guard and a local police guard and if it’s one or the other, maybe they’ll shoot each other.” I never told my wife any of this so hopefully…
ARENSTEIN: Hopefully she’s not watching.
ADAMS: That was exciting. But it was interesting to work in other countries where kind of as an American—a lot of Americans are kind of a bit naïve as to the way the world works outside of their typical boundaries, so that was exciting. Because we launched the station and it was the first time that really people had come to visit the island since then, we got to cover the Queen of England when she went and then cover the former President Reagan when he went. So he was thankful and sent us a nice picture, which was a very interesting experience to see how other people work and how our Secret Service works and how the Walker Squad and the British Secret Service works. So those were interesting experiences. I didn’t expect to get as a director of network in a telecom company, but that’s the way David was. He was kind of always full of interesting assignments. I came back from that. I did the MFS assignment and then as the cable industry in the US had pretty much been built out during the early 80s, there was an opportunity to go to the UK because that was the start of the new build of the cable industry and a lot of American companies had gone to the UK. So we went over because of the relationships we had with the cable companies, largely supporting them, helping them to plan, design, build, construction manage. We went over there to start our business. I went over on my own and in my knack for being in places at the wrong time, I moved my family to England the first day of the Gulf War. So they had to take the signs off the American schools and everything else, but we survived and I’m still married thirty some-odd years later.
But we went over to the UK and much like the urban markets that were our forte, the UK market was all buried plant, it was all high density, it was all largely civil construction costs that were the bulk of your capital and that was an area we were experts in. So we were able to secure some work with the Teleos folks when Jim Dobie was there and later Larry Carlton, I think, joined them after TCI over. And we did some work up in the Midlands, we did some work with Comcast, we built Cambridge for Comcast. We met a great person in ___________________ who is with the folks in Switzerland now with Liberty in Switzerland—great guy. So we got a lot of exposure there, we did a lot of work in a lot of markets. We did Edinburgh, Avon, Bristol, a bunch of different markets and then MFS, who I was affiliated with, before started MFS International, we built some networks in London, France, Hong Kong and other places with that. And then as we built out in England for some of the operators—we were not an operator—this was all dual plant, dual services. For the first time, not just a video broadcast subscription service, it was voice and video so you had this added infrastructure that was Siamese plant for telephony and so that was intriguing. So we said, “OK, you can get much better returns in this model if you could get high penetration.”
So then unlike the US, where the penetrations on video were high, in the UK the penetrations were fairly low on pay TV. They kind of needed the telephony opportunity to cover the heavy burden of the civils. We understood a lot of the cost elements of that and the business opportunity and what we decided to do was come back to the US and start RCN. This was David and I and in order to launch RCN, we needed something as a base operation. We secured ownership in C-TEC—it was a public company—so we took majority control, controlling interest in that company, which had cable systems in Michigan and a bunch of other friendly regulatory states. It had a wireless business, it had a systems integrations company, it had a long distance company back when long distance was separate from local, it had come off telephone. They also had a relationship with Northern Telecom as a distributor of switching and so we thought a good nucleus to work from. Then we took some of the elements that were not necessary ingredients to RCN’s strategy and we couldn’t do everything. So we said, “Look, you know what? The wireless is small and to build that would consume too much.” So we sold the wireless and cable Michigan properties we sold off those to create some funds. We separated Commonwealth Telephone as a separate public company and we had RCN, which has some of the other properties that still remain within RCN today and then some properties that we’ve subsequently sold.
That was the nucleus. So we went from England. The day the kids got out of school I went back to the States. We acquired C-TEC, which is based in Wilkes-Barre, Pennsylvania. David wasn’t a big fan of Wilkes-Barre, Pennsylvania. He liked Princeton so we moved the headquarters to Princeton, New Jersey. But we kept the engineers up in Wilkes-Barre because it was a good market. We kept the call centers up there. So that was the start. We then embarked on kind of building out the strategy which was bundled services—the service set went from video and voice to video, voice and data. We found that acquiring systems and upgrading the plant and launching new services was more expensive to do than just building systems as a greenfield in markets where you could get the density and the aerial plant combination to make it work. So it was an OK idea on paper. The reality was that in kind of what was, at the time, largely a monopoly environment where you were the cable provider—the telcos hadn’t really entered that space yet in the US—that you were going into a market as a video provider, as the only one on the planet, and as I’ve come to learn from the cable folks—it’s kind of an unwritten rule that you don’t do that and they’re very sensitive to others doing that, which I’ve also learned subsequently.
So I found myself trying to build network in communities where we had no friends. The cable company was not friendly towards us, the phone company wasn’t particularly friendly towards us. We had no rights-of-way to place the cable. So what we did was, in order to build the network, even if you could find areas where there was aerial plant, maybe you could find areas where the density would get you the return because you didn’t need a lot of penetration to make it work. Because if you could build it efficiently and you could get enough density, you could survive on say 20% penetration of a bundle. Which sounds low, but in a competitive environment that’s tough to accomplish. So we said, “We need to find a way to get on the poles faster.” Because the cost of make-ready was high, the time to go through the cycle of the engineering exercise and get the make-ready done was too long. You’re losing speed to market. So we said, “How about if we partnered with electric companies. They have plant on the poles.” Some were kind of leaning toward getting into telecom, some were in it lightly. So we partnered with Boston Edison, we partnered with Potomac Electric, or Pepco in the DC market and so what they contributed was access to the right-of-way. And because we were a heavily fiber-rich plant, we could put the fiber in a non-metallic sheath up in the neutral zone, thus avoiding the make-ready and getting up on the poles quickly. The other added advantage was they had access to buildings and underground plant so we rolled those into the agreements and we went with it.
Not long after that, in Somerville, Mass., I believe it was, where we were doing this, Time Warner sued us. So they sued us because they said, “You can’t do what you did. You can’t put that cable in the neutral zone.” We won. Comcast, I think, was lining up to sue us as well but when Time Warner was unsuccessful, they backed off. Then Chuck Dolan, who we had built the Boston system for, I think because in part when we built the system for him and he didn’t really want to pay us everything for building it, we kind of sued him to get the rest of our money. Which I think was not uncommon that he sued us as RCN, claiming that we were the bundled incumbent operator, even though he’d been there for fifteen or twenty years. It was very aggressive. We weren’t getting any favors from the phone company either because we were taking telephony subs. And this was at a time when it was lifeline telephony and the telephony average revenue per subscriber was pretty healthy, especially in the New York market—I think it was one of the highest in the US. The strategy was very much NFL city. We weren’t necessarily looking for the core of the city but those suburbs around the core, kind of the donut around the hole where more likely it’s aerial plant and more likely it’s all kind of single family homes or even multiple dwelling units which we had become somewhat of an expert in. In the Boston market with the experience with Chuck but also here in Manhattan we did a deal with Liberty Cable.
So we got pretty good at that. So getting outside plant access, getting inside plant access was kind of the game. But the fight was on. I mean, if you look at this market we’re in, taping today, I believe Tom Rutledge was here in this market, I think working for Time Warner at the time. It was a fight, right? A fight for every building, a fight for every customer. I think the only ones that won now, years later, I’m learning, it was the vendors. Because whenever we’ve spend a dollar of capital, Time Warner would spend the same to try to keep up and compete. At least I think that was what was going on.
In any event, it was a fight and one of the stories I think I’ve told in the past is that we were able to actually successfully sell the building that—I think it still houses the Time Warner headquarter building. So we sold access and distribution of the build; we won that bid so RCN was delivering the data services and voice in Time Warner headquarters. I remember Glenn Britt speaking to me at one point and he said, “Mike, you really need to terminate that contract. It’s very embarrassing.” And I said, “No, Glenn, I can’t do that because that’s one of the best stories that I have is to be the provider in your building in Manhattan.” But he was a great guy.
ARENSTEIN: He was.
ADAMS: …great company, a great competitor and Tom’s a sharp guy and done very well obviously at that time and since then. So that was kind of what was going on with RCN. But we were building all this network and we did have a couple of systems that were part of the mix that were monopoly but were not a big company. But we were spending a lot of money, so probably at the rate of about $5 million a day. At the peak, about 90 cities in construction at once so we were spending capital faster than we were growing revenues. We needed to raise some money and we were able to raise roughly $5 billion in about 2½ years between debt and equity. One of the investors in that was Paul Allen. The way that came to be was that we had some discussions going on with Microsoft and I think at the time Microsoft also invested in Comcast, I believe, and I think Rogers in a similar time frame. So we were talking to them about it. There was a bit too many strings for us and Paul Allen stepped up and said he would be interested so we worked out an arrangement with him. He’s an interesting guy, great guy, very technical. And he actually came here himself to do some of the diligence in Manhattan because we were playing around with some new technology. Because as the new guy on the block with no customers, you had to be better, right, or else you weren’t getting anywhere.
So we were generally first with services. We did create our own voice service. I think the only other operator at the time was maybe Cox—
ARENSTEIN: Cox, yes.
ADAMS: —doing voice services. Now no one talked about RCN voice services because we were kind of persona non grata in the cable community, but we were doing that at that time and then launched our own Internet service outside of the group that was doing the—not Road Runner, but the cable consortium, Internet…@home. So we were not part of that, we would never have been allowed to be part of that. So we had our own Internet. We were first out of the gate with that, we pushed hard to be first out of the gate with digital, we pushed hard to be first out of the gate. As the speeds increased, we were generally able to do that because we had new plant and we had little legacy to get in the way. Part of the challenge with big established infrastructures and companies is you’ve got a lot of legacy to work past. We didn’t have that burden, but we didn’t have the benefit of a lot of cash flow from customers. The capital markets dried up a bit. I shouldn’t say that—they dried up abruptly and we were spending at a pretty fast clip so we had to kind of suspend things abruptly and went through a re-structuring.
During that period, there were headhunters calling and I wasn’t interested in like changing jobs or anything. I was working on a plan to take the company forward. David and I had started this company so we knew everybody in the company so it was a very personal situation and I felt an obligation to the company and the individuals. Because the people in the group were really good people and really worked hard and they get all the credit for all the good things that were created. I was not planning to go anywhere so when the recruiters were calling, I said, “I’m good, thank you.” Plus, on the family side, my wife and the kids were finally in New Jersey because we moved around a bit and they were in high school and I said, “You know what? We’ll leave them. We moved them to England and back and a couple of places in the States. No, you know what? We have to leave them alone.”
So then I get a call at like 4:30 in the afternoon from Ted Rogers, who I didn’t know other than by name and reputation, which they had a great reputation in the US from their cable operations that they had sold. So I said, “Mr. Rogers, what can I do for me?” And he said, “Oh, call me Ted.” I said, “OK, Ted. What can I do for you?” He said, “What are you doing tonight?” I said, “Well, I’m working, then I’m going to go home. Why?” He said, “I was hoping that maybe Loretta and I could come down and have dinner with you and your wife.” I said, “I’m in Princeton, New Jersey. You’re in Canada somewhere, right?” He said, “Yes, I know where you are.” But it was a bit spooky that he knew where I lived and I was married. Anyway, I said, “I don’t know if I can do that.” He said, “Call your wife and call me back.” So I got his number and I called my wife and my daughter had gymnastics and my son had something else and so my wife said, “We can’t. That’s kind of strange. But we can’t really do that anyway.” So I called him back and said, “Look. We’re going through re-structuring, it’s not a great time, it’s a pretty crazy schedule but if you really want to talk about something, maybe on the weekend. I’ll come up on the weekend and we can chat.” He said, “OK, great.”
So I went up and we had a breakfast in Toronto and he said, “I have an idea. I have a wireless company…” That at the time was run by Nadir Mohamed that was partly owned by AT&T. “I have a cable company, two public companies. I want to set up a phone company. I want to talk to you about being the CEO of the phone company.” So here I am in C-TEC/RCN having just gone through the merger of a cable company, phone company, to kind of consolidate the support and the resources into one set of products to a common customer. And I said, “Well, you know, with all due respect, maybe you should think about if you want to do phone, maybe just work it through the cable company. Then you don’t need to set up another company, another set of management, another group to fight over what should be common resources and capital.” Anyway, it was a good conversation. He was a great guy.
So I went home and then he called me back and said, “I agree. I agree with what you said. I’ve another idea.” And I didn’t know Ted at all. I was getting to know him a little bit. He said, “How about this? How about we launch phone on the cable plant, you hire someone to help you do that and then you work with my son Edward who is running the cable to help him? Because you know all about cable and everything else. All of that.” And I said, “Ted, remember last week when I said I had a job? I still have that job this week. I mean, I might lose it next week but you don’t need me to do that. You can find lots of people to do that.” During these dialogues I’m starting to learn about him and the company a bit more, because I was not in the market to look and I wasn’t that knowledgeable of Rogers at the time. But he was a great person and they had great assets. I think because I said no, it was now kind of a challenge for him. Had I said, “I’m interested,” he probably would have said, “No, forget it. We can find better people.” I truly think that could have happened.
But he was a great person. I think more passion than—there are a lot of people with lots of passion and drive and creativity in the cable industry. That’s what’s kind of fun about the cable industry but I think for Ted it was all about growing the company, finding ways to fill niches for people, finding ways to get better and he was—what I’ve learned subsequent to joining—always willing to invest. He was controlling shareholder so that gave him some latitude. But he wasn’t stuck like what you’ve seen in some of the public companies even within cable where they’re kind of challenged to do what they might like to do and might think they should do for long term optimization by short term financial reporting requirements, which is a real challenge. That would never get in the way and Ted would put everything on the line for the business. He put his house on the line, I think, in the early days. He’d been in the business for a long time. He and his family are great people and the company had great assets so I did obviously ultimately agree to join, which I have no regrets. But I said, “I’m still working on some things for RCN. I really need to support them. I don’t want to leave them in a bad place.” He said, “No, no, no, you come up here and I’ll help you with them, too. You need some secretarial or whatever help with that, you do that, too. But you need to come right away.”
But I did kind of go from one job right into the next. And I did agree to work in the cable group under his son, Edward, as the CEO. He didn’t have that structure so he re-arranged the whole organization under—Edward’s a great guy, too—but what I didn’t appreciate is Edward was running cable, his dad was the chairman and CEO, and I worked for his dad launching phone and his son on cable. And they didn’t always agree. So I would get memos sometimes at the same time saying, “Go right. Go left.” So that was a bit challenging to deal with. But both great people and both well-intentioned.
But anyway, that was fun and over time, we acquired more assets in the spirit of moving towards the triple play, we bought Sprint Canada so we integrated that and then we bought a couple other cable assets. Then as we tried to optimize, much like what was done at RCN, we optimized by creating shared services so that you would get all the common support from network for all the services, call centers the same way, the field so a lot of that was put under that portfolio. Then we took out the ownership of AT&T and created one public entity and then merged wireless and cable so that all the support for that combined entity was one. Then more recently in the Rogers experience, then we looked to optimize the customer experience from that kind of suite of services offered to a common customer, and that’s when they launched what Rogers would call the “Unified Touch Experience” which some would call “Omni-Channel,” which is kind of easy to talk about, hard to deliver. And it’s not something that the cable industry really had spent much time focusing on in the early days, in part because they didn’t have to. Now it’s a necessity and a lot of people are on that bandwagon. Which is good.
So I was behind a lot of that and supported it. I won’t say I ever achieved what we had hoped to achieve because it’s not easy but that was my life at Rogers. I think that’s the essence of it.
ARENSTEIN: All right. Could we go back and touch on a couple of things? One thing that strikes me is that I guess you built systems in Cambridge, Massachusetts, and in Cambridge, England.
ADAMS: Yes, yes.
ARENSTEIN: Compare doing that. Give us a feel for what cable in Britain was like, cable in England was like. You were there on the ground floor, basically. What was it like? You said the penetration wasn’t nearly as much as what it was here in the United States.
ADAMS: So obviously in the US generally a much more established cable market. Cable is more of a North American kind of phenomenon. So it wasn’t as new in Cambridge. People understood the business, people understood and could supply and support the network. The regulation was fairly mature although evolving constantly, still to this day. Net neutrality was in the paper this morning. The environment in England was different in that this was a new industry, not totally new, but an evolution that was taking place for wired cable, which was starting from very light penetrations in an environment that, I think, different from the US. The areas in the UK that were being built were all underground, all very densely populated, I mean, there was high density and then fields. And then high density again. So high civil costs, so high cost of entry and little immediate revenue stream opportunity. You had to really work hard to do it. So you had to be really careful not to spend…so that was the difference. The industry struggled with that and I ran into Julian Brodsky sometime back actually here in Manhattan after having helped Comcast in England. He said he still owed us for helping him out with what he called the “Irish Mafia.” So I said, “OK, all right. We’ll somehow take you up on that. You know, favor back.” And I read some industry thing and he said, “Let’s grab a drink.” So we’re having a drink and he said, “How’s it going? What are you up to?” And I said, “I’m at Rogers. I’m working on this building project and I had some meetings earlier in the day and I’m having a hard time with it.” I was venting a little bit in front of him and I said, “Forget it; it’s nothing.” And he said, “No, no. Tell me more about it.” And it happened to be a company that we were working with, Amdocs, which was a company he was on the board of, which I didn’t know and I said, “Just forget it. Let’s talk about some other stuff.” So I didn’t think any more about it. It was an evening here. The following morning, I get to Toronto and in my office, first thing in the morning, there’s someone outside my door and I’m thinking, I must have messed up. Someone has a meeting with me. I said, “Excuse me, but who are you?” It was a woman from Amdocs and she said, “I got a note from Julian, from the States, and he said that you had some issues. My job is to find out what they are and fix them all.” So he was a character and obviously he had a lot of pull over there but he’s a great guy and one of the guys that we had worked with obviously in the UK and I’ve crossed paths with him in the recent past, but certainly one of the founders of the industry, right? And certainly obviously at Comcast. But a great person and he was always in front of everything that was happening, right?
ARENSTEIN: You interacted with Brian Roberts and Ralph Roberts, I believe.
ADAMS: The first thing when I went up to Rogers, having freshly left RCN—I mean, days, right—I went into the headquarters and met with Ted and Ted proceeded to take me to meet the staff. So we go out and a bunch of people shake hands: “How are you…?” Then Phil Lind comes out from his office and he’s like, “Oh, my God, what have we done now? Hired an overbuilder.” I said, “Nice to meet you, too, Phil.” But over the years, the eleven years following that, I like to think we built a good relationship with each other. He’s a great person, and he’s a big part of what was created in the Rogers Cable business for Ted.
ARENSTEIN: We had him here in this seat the other day.
ADAMS: Yes. And he knows the business on both sides of the border inside out. He knows how to work with the regulators. He’s disciplined and he’s a phenomenal person and he’s a big part of what it took to grow Rogers in Canada and especially here in the States.
So I’m a couple of weeks into the job and Ted says, “Let’s go talk to Brian and Ralph about things.” I said, “Well, Ted, you know that we were fighting with Comcast and others like two weeks ago. I don’t think they want to see me.” He said, “Oh, no, no, it will be fine. It will be fine, it will be fine.” So a couple of weeks pass, we fly down there and we get in the elevator at what’s now the old Comcast building and we get in the elevator. I had forgotten all about the conversation; it was just Ted and I. He said, “Well, Mike?” I said, “Well, what?” He said, “I think you’re OK.” I said, “What do you mean?” He said, “No alarms went off, no one came in to grab you, take you out of the building, so I think you’re OK.” But what I came to realize, though, in that same day, after going up to meet with the folks at Comcast—not that Brian or Ralph, whatever, would treat people that way, I got the sense from some of the guys that had worked with, I think it was Steve Silva who was actually at Comcast at the time, who had been with Vulcan Ventures and Charter and he grabbed me and he said, “Mike, you don’t know how much the cable industry hates overbuilders.” And I never appreciated that until I was now back on the cable side of the fence and realized how deep that was. So that’s why I’m shocked to be here today, having had that little moment when I drifted away from cable.
But I’d like to think that some of the things that we did helped prepare cable for what’s now the business which looks much like what RCN was trying to create for everyone. But there were great people in the Rogers family. So I worked for a family business at the start with the McCourt Company and I went from that family of twenty-two years in several countries to working with the Rogers for the following eleven. I had, I think, three days in between them. Both great families. But the industry was largely family businesses; entrepreneurs—the Roberts family and the Rogers family are very close. And the industry is very tight and willing to share and communicate and help, which is great. It’s not something you see in the telecom world where there are typically larger public—it’s not personal and it’s just different. It’s not as exciting not as fun, not as challenging, not as rewarding, I don’t think, either. We got to meet them and obviously Chuck and others. Jerry Kent, you know, during that period when RCN was coming an investment from Paul Allen. And Paul was one that liked to get his companies together because he’d like to identify synergies. And I didn’t appreciate and maybe Paul didn’t appreciate how much Jerry hated being in the same room with me. Not that Jerry has ever said anything to me, but from what I gleaned—
ARENSTEIN: But not you; but that you were an overbuilder.
ADAMS: What I represented at least; maybe me as well. But what I represented—I came to appreciate it much later that he disliked that.
ARENSTEIN: But he’s a diplomatic guy. He wouldn’t say anything.
ADAMS: He’s a sharp guy and I’d like to think that we’re on speaking terms now. But he’s moved on. He moved on from Charter about that same time anyway. It’s been a great industry and a bunch of great people that have worked hard, sharp folks, disciplined, diligent and you know, you look at someone like John Malone who I didn’t work with very closely at all. But I have a ton of respect for him and what he’s built and what he continues to build. He’s very disciplined. He kind of reminds me of what I saw in some of our early partners in RCN; Peter Kiewit’s sons, who had invested in what’s now Level 3. They’d invested in MFS and at the time, they had an investment in RCN and Walter Scott, who was the chairman of—Peter Kiewit is from Omaha and I believe one of his high school classmates was Warren Buffett. I think as an outcome of that, Warren Buffett’s office was in the Peter Kiewit Towers in Omaha. So occasionally if you would go out for a meeting out there, you could go up to the cantina on the top floor and Warren Buffett would be there having lunch.
ARENSTEIN: So we were talking about a captain of industry, Warren Buffett, and you’re talking about the Roberts, too, and John Malone is certainly a captain of the industry. Some people would say there are kings of the industry. Well, you dealt with a real queen, not a queen of industry, but a queen of a country.
ADAMS: After we rebuilt the infrastructure in Grenada, the Queen was going to address Parliament, I think for the first time in twenty-three or twenty-four years. So this was a big deal in Grenada. We were the only television station and it was such a big deal that they wouldn’t allow anybody to drive except the media. So the Queen pulls in and from the ship comes this large procession walking up towards the steps of Parliament. And bands playing, people marching, and at an unfortunate moment, the music stops and the Queen was walking up the stairs and the skirt she had on was relatively short for the event. One of the crew whistled inappropriately at that time when the music stopped. She stopped and the whole procession backed up. She turned to the camera guy and I thought, “Oh, my God, here I am in a foreign country. I’m not going to make it home.” She just smiled at him and fortunately kept going. But it was very interesting working with them, and we met the Duke of Edinburgh and worked with the Walker Squad, which was the equivalent to our Secret Service because there’s a lot of etiquette around filming the Queen. We had to be sensitive to that. But that was very interesting.
ARENSTEIN: How long were you and your family in England?
ADAMS: We were there a couple of years. I went ahead because we had no business and no employees so I was on my own. I brought one person from the company who I had worked with for a long time and had a lot of respect for, Tim Wiley. So he came over and worked with me and then after six months, in early 1990, I moved my family and then Tim came over and joined me with his family a couple months later. So that was 1992 that I came back. Tim stayed a little bit longer. There was a lot going on. I was rushed back so we could start RCN.
ARENSTEIN: Where did you live in England, what part of England did you live in?
ADAMS: I lived in Surrey, working at the Telewest office. We had people in Cambridge as well and some other locations. We did a lot of work for Teleos, did work for Comcast, did work for other operators in that market. It was a great experience.
ARENSTEIN: So, Mike, you’ve certainly seen cable grow in your thirty some-odd career. What do you think the future is? We’re sitting here at the end of 2015. If we’re here in another five years, if we step back together, what do you think is going to be different, what do you think is going to be the same?
ADAMS: I think that it’s pretty safe to say that things won’t be the same. I think one of the great things about the cable industry is they’ve been willing to adapt to change, willing to invest in change, smart enough to understand where there’s opportunity, resourceful enough, creative enough to find how to accomplish that. I think that certainly the original founders of the cable industry, some of the folks we’ve talked about, you know, the Malones, the Roberts, the Rogers, Jerry Kent, Steve Simmons we didn’t talk about, but he’s another one. They were there in the early days when you really had to be tough, you really had to be an entrepreneur to make it, right? This was not easy. The banks were not really friendly. You had to fight for the money, you were looking to get whatever money you could get to build. You had to be really creative and be efficient. It wasn’t easy to hire people, necessarily good people, because they didn’t necessarily go to the industry in the early days. I think they’ve gotten through all of that. But the people are still the same. And Ted, unfortunately, has passed away but people like him and like Ralph as well. But Brian, they’ve seen all of it and they will adapt. They embraced like the gift from the heavens—the high-speed Internet has now become for him and probably for most others, if not already, soon will be the dominant margin contributor to the business and it will continue to be. I think that one of the things beyond the natural kind of willingness to compete and the ability to compete and the creativeness and the aggressiveness and the stamina and the relentlessness of a Ted Rogers is what the industry has on the cable side. You don’t see in lots of other businesses—I think will help to keep them marching along. Like the Rocco Commissos and people with that passion and drive. They’ll find ways to succeed. It may not look the same. Cable doesn’t look the same now as it did a couple of years ago. It won’t look the same going forward. I would venture to guess that data will always be a significant piece going forward if not the dominant—probably not exclusive piece, unless people elect to, but the one asset that cable has that a lot of other competing—because the competitive threat a couple years back was the other incumbent. I think more so people are appreciating the threat is not so much the other incumbent alone, but others that are competing for current revenue streams and other people that are compromising the revenue streams. So garnering the same RPU for a voice service is not likely to happen, so to kind of accept that and move on is something that I’m sure they’ve already embraced.
But the asset that the cable industry has in the physical infrastructure and the way that the cable industry has been able to update that infrastructure in a timely manner and an efficient manner and an effective manner to deliver the services that the customer needs I think will continue. I think the extension of—you know, one of the things we did with RCN, because we had the luxury of being greenfield, we went very deep. We knew that we were going to a triple play, we knew that we were going to services that were two-way. We designed the network to do that. We were deep small nodes, fiber-rich. We did fiber-to-the-home before it was ready for primetime and we said, “You know what? You don’t need to go fiber-to-the-home for now; you just need to get deep enough.” But they’ve done that and they’ll continue to do that over time. They have the cash flow. The consolidation of the industry will allow the rest of them to be able to be effective in continuing on that path. And those assets are not easily replicated, right? So at least one kind of piece that isn’t easily stripped away from them is that final connection to the home.
Now, some people might argue that wireless connectivity will actually supplant that wire. Well, I think an increasing amount of revenue is coming to the likes of Comcast and others for the back haul from that wireless network because the higher the speed, the more you move to 4K on handheld devices, the faster you want to get that wireless connection to wired endpoint. And that is a big opportunity for the cable industry. Like Rogers is unique in that we had wireless and cable. A few years back, it was we only need wireless. LTE is here and who needs cable. But what happened like that evolved to where we really need both, right? What are other players in Canada doing? The quad play is what’s attracting all the success, all the attention. You also have the benefit of the physical trucks and people on the street and that customer connection. So I think they’ll be fine. It will look different and the money will move around. Probably more money will go to high-speed Internet. I mean, when I first went to Rogers from RCN, I said to Ted, “I don’t like investing in these proprietary set-tops and I want to put a cap on the Internet.” I thought he was going to shoot me! He said, “What are you talking about? We’re the best network. Why should we throttle it for the customer?” I said, “Not throttle it, consumption cap.” This was ten years ago, eleven years ago. Because I was trying to get them comfortable with it before it had an impact because that’s what drives the CapEx. I’m coming from a company that had little CapEx to spend. In Ted’s eyes, he never wanted capital to be a concern. He said, “I’ll worry about the capital to be a concern.” He said, “I’ll worry about the capital, right?” So capital we joked about was never like real money. I was the only one in the company, I think, who was concerned about capital. So one day they gave me a T-shirt. They said I was a cash flow guy; that was my lesson from RCN. It was like the “Cash Flow Club: Membership of One” shirt. People at Rogers would joke about that.
It will be different, but they have it in them to survive. That much I’m sure. Certainly the bigger ones will be able to survive.
ARENSTEIN: You were in Mexico, too, right?
ADAMS: Right.
ARENSTEIN: We didn’t talk about it. We have a few minutes; you want to?
ADAMS: Sure.
ARENSTEIN: Do you want to talk about Nick?
ADAMS: When I joined Rogers, Nick Hamilton-Piercy was in the cable management team and Nick reported to me. Now what I found out fairly quickly was that although on paper Nick reported to me, Nick worked for Nick and Nick had enough respect and tenure at the company that he could largely ignore what I thought. Nick had been in the business for a long time, a great reputation, a great person, great wealth of knowledge, depth of knowledge, and a great contributor to Rogers and what they had built. But Nick was only working a partial week. I said, “Nick, we have a lot to do. You have a hugely important role and I don’t see how we can do everything we need to do on a partial work week. You need to commit to a full work week.” Apparently I wasn’t influential enough to get him convinced to do that so he said, “No, Mike, I’m not interested, thanks.” So Dermot O’Carroll took the full time role and then Nick eventually eight years later, I think he worked with Melinda Schopp on the strategy group for a while because that was a good use of his expertise, then eventually retired from the industry. But Nick was a great guy, made a huge contribution along with the early team of Rogers, with Ted and with Phil and others, Mike Lee had been up there for a long time to kind of build the company so the continuity was important to me. We consulted with Nick a lot and he was a great person but it was too bad he wouldn’t commit, but I respected his decision not to.
We had worked in Mexico. When I was at RCN we had the opportunity to invest in an ownership stake in a company called Megacable. They were based in Guadalajara and systems largely in the western region of Mexico. Enrique Yamuni was at the time running the operation and I believe to this day continues to run it. He’s a great person. They were, I think, the third largest cable operator in Mexico at the time. The family, I think the Bours family, Javier Bours had a relationship with Peter Kiewit’s sons through another venture. So we got involved with them. We actually flew together with TCI, or I guess it would have been United International Holdings at the time. So we went to Denver, we got on a plane and we flew to Mexico to meet with Megacable. And UIH ultimately elected not to invest. We elected to go ahead and invest. So I was the sponsor for that and the board member. So what we did with them was we helped them—because the industry in Mexico was a bit behind where the US was and a bit of its own kind of challenges, different from the UK where they had the density but they didn’t have the revenue potential and a lot of the equipment—cabling, set-tops and the rest—were all coming from the US or at least being paid for in US dollars, which were material against the revenue per sub. The country works a bit differently than it does in more kind of established locations. I don’t know how else to put it.
ARENSTEIN: You put it well.
ADAMS: We got to work with Enrique and grew them from the third largest to the largest. We launched a select business in Mexico City. Then I abruptly, as we talked about, I unexpectedly for me included, went to Rogers, but I was the point of contact with them and the person who went down there and met with them and helped them build and had a relationship with. Then I left and they were sending me the reports at Rogers. And I said, “No, no, you need to send them to the new guy at RCN.” Because the guy had never gone to Mexico to break bread, to meet him, to give him some respect, they never did. They never talked and they bought their interest back from RCN. Which was not so bad for RCN because they made three times their investment in a few years so it was good for RCN. And probably good for Enrique, I assume. But great people and it’s a different—you know, all of these countries have their own kind of sets of regulations, sets of challenges, opportunities, and you have to be open-minded about what’s the best thing. So that’s one of the things that I learned from having done that.
I did work in Cali, Colombia. I wasn’t there full time. I did go and visit. Back in the C-TEC days we had the system design shop, so we designed telecom infrastructure with cable and telephone and we designed an infrastructure for Cali, Colombia. There was a need for me to go down and meet with the client down there. So I flew to the airport in Cali and I was met by the client’s attorney, and a mile from the airport, pitch black, we get pulled over by guerillas with machine guns, and I thought, “You know what, this is it.” So I wasn’t all that valuable so they probably would have just shot me. I got down as low in the car as I could, figured it would last a few more minutes and one of the guys in the front got up and started yelling back at these guys. They were speaking Spanish so fast I have no idea what they were saying. Then all of a sudden, the commotion stops, he gets back in the car, shuts the door, and we drive off. And I said, “What did you say to him?” He said, “I just told him that this is no way to treat my American friend.” Which I know is absolutely not what he said, but apparently this client was connected well enough to get through that. But that was a pretty scary moment.
And I think at the time Colombia was a much more dangerous place than it is currently. So the people are fantastic and the country has improved incredibly since, although at the time the White House told us it was probably not a good idea to work, to make any kind of partnerships in Cali. Lots of interesting experiences, all kind of attributable to David, I think. David and Ted.
ARENSTEIN: Yes, and that summer job really started it all off.
ADAMS: It was a summer job and then Ted calling. So I guess nothing that I’ve done has been something that was my own plan. It was someone’s plan so I don’t know what’s going to happen next.
ARENSTEIN: That’s what I was going to ask you, to end. What do you do now? You’re retired officially. What are you doing, what kind of hobbies do you have, what’s taking up your time now?
ADAMS: I like to do things, I like to build things, I like to get things done. Being idle is a very hard thing. I haven’t had any kind of extended periods where there’s been very little to do. My wife has stuck with me for the last thirty-six years and she’s got her own business, so I’m helping her out with that because we’ve kind of pushed some of the domestic things and business needs to the side for the last several years so I’m trying to catch up on some of that stuff. But now she’s at the point where she’s like, OK, you need to kind of do something. So I’m looking for opportunities to kind of leverage the experience I’ve been fortunate enough to get over the last thirty years in the business, building businesses, and building infrastructure and building customer relationships and we’ve done a lot of business development both at RCN and at Rogers. And a lot of the integrations have been done by me in that company so I still have experience with resi and commercial, both on the network side and the customer side. So I’m looking for opportunities to be helpful, to advise or board seats or something like that. Projects: I’m kind of open for that. We’re back in the States which is good. Our families are from here so nothing in Canada—I shouldn’t say we’re back. We have three kids. One’s in Boston, two are in Canada. So my daughter is getting her doctorate at Queens right now. My son actually works for Rogers in Toronto. They love Canada and they’ll, I’m sure, become citizens and possibly stay long-term, which is fine. Canada is a great country and my son working for Rogers is not a bad thing. My daughter’s studying toxicology and she’s a biologist and she’s going to save the planet, she told us, so maybe not by herself but maybe with help.But anyway, that’s what’s going on with me so far.
ARENSTEIN: This has been so much fun. It’s been great. Thank you so much.
ADAMS: Was it OK?
ARENSTEIN: It was great, it was fabulous. That was really good.
