Interview Date: July 10, 2023
Interviewer: Stewart Schley
Interview Transcript
STEWART SCHLEY: Greetings and hello and welcome to this iteration of the Hauser Oral Series presented by Syndeo Institute at the Cable Center from Stamford, Connecticut. I am visiting with you in the studios of Charter Communications with John Bickham, most recently the chief operating officer for Charter and a longtime cable industry executive who has a pretty rich heritage and has seen a lot. So thank you, John, for sitting down with us and kind of recounting some of your experiences in the business. My guess is — I’m not sure where you grew up, I want to know, but you probably didn’t grow up wishing to be a cable TV industry executive. Maybe you wanted to be a fireman, I don’t know, but tell me about your history as a kiddo.
JOHN BICKHAM: So I was born in a little town close to Corpus Christi, Texas in south Texas. Lived there in a lower middle-class community and went to college at a place then called Texas A&I University, now called Texas A&M, and studied electrical engineering. There was not a lot of rhyme or reason to that, but I did it anyway. And when I got out of school, I had two job offers, I remember this well. I had a job offer from a company called Natural Gas Pipeline of America out of Chicago who I interviewed with in Chicago in the middle of February, and a company called Houston Lighting and Power out of Houston, Texas. And I took the job with Houston Lighting and Power.
SCHLEY: Engineering job?
BICKHAM: Yeah. Engineering. You know, the portion of the company that was building power plants hired me. And back then Houston was one of the fastest growing — still probably is, but fastest growing cities in America. It’s also the petrochemical center of the United States and those industries use a lot of electricity and so the demand for electricity was tremendous. The company at the time was building coal fired generating stations, two nuclear plants, and a couple of combined cycle generating units. So it had a tremendous capital program and I went to work for them. Took me —
SCHLEY: This was late ’70s, early ’80s?
BICKHAM: 1973.
SCHLEY: Okay, that was your first job out of college.
BICKHAM: Yeah. And you know, the federal legislation had put the kibosh on building gas fired and oil-fired units in America because of the Arab oil embargo and the concern over independence and whatnot and so this particular utility was importing coal from Wyoming, from the Powder River Basin in Wyoming, which is pretty bizarre when you think about it. In Texas, I can still remember, they were flaring natural gas not that far outside of Houston, Texas because they couldn’t find pipelines adequate to bring it in and use it for something. But they were putting coal on unit trains from Wyoming to Houston.
SCHLEY: Now you’re going to have to get me from there to cable television somehow. I’m not getting it.
BICKHAM: I’ll give you a little background. So it took me a little while to figure out that I was probably not going to be a very good engineer and I started looking for another way to make a living in this company and I started climbing the management ladder in this organization that was managing these projects. And after about six years I found myself as the project manager on this project building four coal-fired units and it was pretty heady for a 30-year-old guy. You know, we had probably 120 or 130 engineers, procurement people, logistics people. We in turn would contract with companies like Bechtel to do the pure design, companies like Brown and Root to do the pure construction, but it was a learning experience for me to be involved in managing something that big and that many people.
SCHLEY: You must have been pegged as a good manager though, I presume?
BICKHAM: You know, I guess. I know I wanted it more than anything. And my biggest problem at that age, was when I was 30, I looked 20 and I was dealing with lots of people who —
SCHLEY: What a curse.
BICKHAM: — were 40 and older. So I developed the ability to get along with people and get people to understand what I was looking for. The company decided about that time that — they offered me a job to do something completely different. At the time the electric utility industry was dealing with some legislation passed during Jimmy Carter’s last year in office which set the industry on the path to deregulation. And essentially what the regulation said, and I’ll boil it down for you, is that a company like Dow Chemical could go build their own generation and they could go to the utility and say, “I want you to buy this generation, this electricity, from us and you’re going to pay us your voided cost and then if I want to buy electricity from you, you’re going to sell it to me at your average cost.” So presumably the avoided cost was higher than the average cost and so they could make a lot of money. So there were a lot of companies like Dow Chemical in Houston, Texas, Diamond Shamrock, Goodyear, etc., who did the same thing and so they built these big facilities to generate electricity. Typically, they used gas turbines to turn generators. They used the waste heat off of a gas turbine to create steam. They used that steam to run it through a turbine and generate more electricity and then the freebie was they used the low-pressure steam after that turbine generator, they used the low-pressure steam in their processes for the petrochemical part of the industry. So it was a highly efficient thing for them to do and so there was a lot of companies who wanted to build those kind of facilities and then they would come to the utility and say, “You’re going to pay us your avoided cost” and at that point in time they said, “Your avoided costs are the costs of building a nuclear power plant, the fixed cost associated with building a nuclear power plant, and your variable cost would be natural gas because that’s your most expensive fuel, you’ll burn that the last to meet your peaks.” Therein lies a great legal argument and an economic argument. So I spent five or six years with a staff of people trying to change legislation in Washington, trying to get the state public utility commission and the state legislature to do some things to protect ratepayers essentially.
SCHLEY: So now you’re using sort of a different part of your brain than the electrical engineer — than the engineering brain.
BICKHAM: Yeah. So I did that for five or six years. And about that point in time, I realized that I don’t think I was ever going to be the president or CEO of that company. So I was looking around, what am I going to do? The holding company that owned Houston Lighting and Power at that moment in time was diversifying because they could. They had a big earnings generation company over here called a public utility, they got into oil and gas production, they got into coal transportation, and they said, “Wow, cable, it’s on our poles so it must be similar to the business we’re in.” So they started looking around at assets that they could buy. They ran into some executives from Time Inc. Time Inc. said, “You should join us. We’re going to buy part of Group W Cable” which was going to be sold to a handful of companies at that moment in time.
SCHLEY: Right, going to split apart.
BICKHAM: And Time Inc. was looking for a company with a strong balance sheet and who knew nothing about cable —
SCHLEY: Perfect.
BICKHAM: — and would stay out of their way. So for me, I went to the executives that were involved in the transaction at Houston Industries and said, “Look, you’ve got to let me go do this. I’m burned out, I want to do something different.” They said, “Okay, John, you can work in cable television.”
SCHLEY: Whoa.
BICKHAM: So I flew to Denver and met with Trygve Myhren and Gary Bryson —
SCHLEY: The leaders of ATC.
BICKHAM: Leaders of ATC. Jimmy Doolittle. They interviewed me and they said, “Yeah, okay, you can go to work in this joint venture company and go to work for David Van Valkenburg” who was the person they picked to run this little joint venture company. And so we moved to Denver, that was in 1986. And that was the first time I — I mean I had been a customer of cable for a couple of years, but I had no idea what cable was.
SCHLEY: What was in it for ATC or the Time Inc. organization? Why did they want to have this alliance in the first place?
BICKHAM: I think fundamentally Time Inc. was an earnings driven company and they were looking for a way more than likely to take this investment off their balance sheet. This joint venture between Houston Industries was called Paragon and so it gave them a way to help finance the acquisition of a portion of Group W Cable.
SCHLEY: And now you’re kind of in. Now you’re a cable guy. Right?
BICKHAM: Now I’m in. And I know nothing. And David was nice to me and we traveled extensively and I started to get a sense for what the business looked like. And about that time Century —
SCHLEY: Century Communications.
BICKHAM: — Cable. Leonard Tow was having trouble with some franchising authorities in the South Bay of Los Angeles. These were assets that he had acquired in the Group W acquisition and the cities had sued him and they were trying to stop the transaction. So Paragon said, “We’ll buy these assets and we’ll go make peace with these cities.” And I went to David and I said, “David, this is my chance to go be close to the business. Why don’t you let me move to Los Angeles and be the general manager?” There were like 60,000 customers, 50,000 customers. It wasn’t that big of a piece of the whole thing. He said okay so I moved to Los Angeles in late 1986.
SCHLEY: And you’re a real cable guy. Now you’re a day-to-day cable guy, right?
BICKHAM: Yeah, I am. And it was, you know, the first business I’d really ever been around and it was losing money on a cash basis. It had higher expenses than revenues, that’s how bad it was.
SCHLEY: What was topsy-turvy? Like what had gone wrong?
BICKHAM: It had been built by Group W Cable back in the early ’80s and it was I think five cable systems, Lawndale, Hawthorne, Gardena, El Segundo, and Torrance was the biggest piece of it. It was run like five cable systems. You had multiple organizations involved. We probably had 250 employees and probably needed 100.
SCHLEY: I see.
BICKHAM: The rates were very low because the cities were —
SCHLEY: Not happy?
BICKHAM: — not happy. And so we convinced the cities to let us raise the rates. We started making changes to the business, collapsed it into a single business, and started selling cable.
SCHLEY: And you liked the gig? Was it enjoyable?
BICKHAM: It was one of the best jobs I’ve ever had. I was so close to the cash register. It was the first time I’d ever really been that close to the cha-ching. And I enjoyed the whole process of trying to figure out where to spend capital and what to go fix and how to go fix it and hiring people and getting people in the right jobs. So for me it was what I was looking for.
SCHLEY: And it’s an education in the business of cable television obviously, direct.
BICKHAM: Quickly, yeah.
SCHLEY: What materialized from there then for you?
BICKHAM: It became obvious to me that ATC did not want to expand the size of the partnership. ATC was actually, I think for the most part — you should have asked Rutledge this question, but I think ATC was annoyed that Time Inc. had brought in a partner to begin with.
SCHLEY: I wondered, okay.
BICKHAM: They were annoyed about that. And so the idea of growing that partnership, it became obvious to me, wasn’t going to happen. And after a couple of years, I realized that the company in Houston that I had come from was — they were at a dead end so I started talking to them and I said, “Look, if you guys want to really be in the business you need to buy something on your own.”
SCHLEY: Fascinating, okay. And kind of go all in?
BICKHAM: And go all in. So after probably nine months to a year convinced them that they should do that and they bought Ted Rogers’ assets in North America which at that point in time was primarily cable systems in San Antonio, Laredo, southern California, Minneapolis, and Portland, Oregon.
SCHLEY: So that was a pretty big transaction then. I mean —
BICKHAM: It was. I mean I think there were about 600,000 customers in total involved. And the company also decided to allow ATC to go ahead and manage the partnership’s assets without involvement from Houston Industries. So I moved back to Houston to work for a company called KBLCOM.
SCHLEY: With a K. KBLCOM.
BICKHAM: Correct. And we also did business as Paragon in the local markets. And so that was — now I’m chest deep in cable.
SCHLEY: Very much. And it was interesting because that’s kind of an urban market profile for that company, right?
BICKHAM: It was.
SCHLEY: Pretty big city kind of orientation. certainly not classic rural cable at all.
BICKHAM: No. The closest thing to that would be Laredo.
SCHLEY: And John, how did those properties perform for you guys?
BICKHAM: They were in pretty good shape when we acquired them. I think Ted Rogers’ organization did a pretty good job. They spent capital where they should and they didn’t starve them for capital and they were in pretty good shape. They were not cable systems with a lot of channel capacity so we had to start adding channel capacity and things of that nature, but finding the right leadership in each one of these markets and getting things moving in the right direction — this is 1988, ’89.
SCHLEY: Were you in an operations role or were you just overseeing the whole shebang?
BICKHAM: No, I was in an operations role working for a guy by the name of Gary White who had come from a company called Harte Hanks.
SCHLEY: Harte Hanks Communications, I think.
BICKHAM: Yeah. They were a publisher, I think, at one time. So we were headquartered in Houston. We had a small organization there, all the accounting and back-office functions, marketing leadership, sales leadership, operations leadership was in Houston.
SCHLEY: And John, what was driving the business at that time, in that era? More programming coming online?
BICKHAM: Yeah. It was video and it was all video and it was before satellite and so it was really a question of can you build more passings, can you run a better business, can you convince people who haven’t subscribed to your service, maybe never tried it before, to try it?
SCHLEY: And then talk about, if you will, this is an era where you still had city control of rates, is that how the business worked, local rate regulation?
BICKHAM: Not at that point in time.
SCHLEY: Okay, you’d been — because of the ’84 cable act.
BICKHAM: Deregulation.
SCHLEY: Allowed you to do pretty much what you wanted with rates.
BICKHAM: Yeah, but obviously you had to be careful given the —
SCHLEY: Well, ultimately that was proven out with the ’92 reregulation act. So what happened to KBLCOM? What was the exit or?
BICKHAM: So speed forward to I’d say late 1993, early 1994, reregulation came along somewhere in that timeframe and Houston Industries came to the conclusion that earnings, real earnings, coming out of these investments was further off than they had originally thought it was going to be. Regulation spooked them. So Gary White left, a few other people left, but I took over as president of the company in 1994 and by, I don’t know, mid 1995 we had sold the company to what was then Time Warner, Time Warner Cable. Because Time and Warner merged somewhere in the late ’80s, early ’90s.
SCHLEY: And you stayed on with Time Warner Cable though, is that right?
BICKHAM: I did. A guy by the name of Jimmy Doolittle who used to be the president of Time Warner Cable — I wish I could imitate Jimmy. He had a great accent.
SCHLEY: I didn’t know that. You have a pretty good accent though. I’m just going to throw that out there.
BICKHAM: His is North Carolina and I don’t do North Carolina. He’s over the phone and I knew him reasonably well. He said, “John, what are you going to do?” And I said, “I don’t know, Jimmy. This gig’s over.” He said, “I think you ought to go to work for Time Warner.” And I said, “I don’t know, Jimmy.” He said, “No, I really think you should. I think you should move back to Los Angeles and run the assets that we now have in Los Angeles.” And so by now this is move one, two, three —
SCHLEY: Yeah, I’ve lost count.
BICKHAM: This would be move four for my young family. And I said fine. My wife was very supportive and so we moved back to southern California in 1995 and by then we were trying to put together assets that had been owned by KBLCOM, those assets that had been owned by the joint venture company, and those assets that had been owned by ATC, now Time Warner.
SCHLEY: And just put them all in the basket of Time Warner Cable?
BICKHAM: Yeah, and manage them under one umbrella. They were all in the Los Angeles DMA and so —
SCHLEY: John, what were — Los Angeles was hopelessly fragmented for a long time. Now is it becoming more rationalized with the new footprint or was it still kind of balkanized?
BICKHAM: It was still very balkanized. It wouldn’t be until years later when Time Warner essentially put the whole thing under their umbrella with the exception of a couple of small pieces.
SCHLEY: Besides the reregulation of the industry satellite television had reared its head around this time. What were your first impressions of the death star, as some people called it?
BICKHAM: I thought it was a good product. And it was new and they were a new competitor and any time a new competitor comes into any marketplace they take customers. But they had their own problems, their own issues, and so service became a differentiator between cable and satellite and I think there’s no doubt satellite made the cable industry a more competitive industry than it was at that point in time.
SCHLEY: One of the articles I’ve read that has quoted you called you an unsung hero of the cable industry. And it alluded to under your purview with Time Warner Cable big runups in product sales, new product sales, improved penetration of the key — we had new tricks in the bag at that point, but what were you good at? Were you a marketing person or what was your kind of bailiwick as a manager and an executive?
BICKHAM: I don’t know. Jon Hargis who worked for me for years at Cablevision and Charter would say that I was not a marketing person. (laughter) But if John wanted a second opinion about anything he would always ask me so we had a friendly banter about it. You know, the cable business in the late ’90s was going through dramatic changes. Upgrades to the network and the deployment of new technology into the network, hybrid fiber coax systems became the norm and smaller nodes, the introduction of digital services, digital video services, and the very beginnings of the internet deployments were happening in the late ’90s. So it was a pretty heady time, lots of capital being spent. It was tremendous impact really on cable companies during that timeframe to deploy all of this new technology and CPE into the homes, both in the form of modems and digital set top boxes. So it was tough.
SCHLEY: Did you sense though as these new products came online a change in the perception of cable from a consumer standpoint? Did we become a little more heroic and a little less bothersome, if you will? What was the kind of shift in identity? Or if there was one at all, would you say?
BICKHAM: I don’t know. I think cable is a very local thing and I think any location — I’d like to think that the cable systems that I had anything to do with back in the late ’90s ran a pretty good business, provided good service, met our commitments. But the worst performances by the cable industry in America usually became what people talked about and focused on. I’d like to think that I didn’t have too much to do with it, but —
SCHLEY: There were some bad actors maybe.
BICKHAM: Clearly if someone moved from a place where they had really terrible service into your community and you tried to sell them service you were trying to overcome —
SCHLEY: Somebody else’s —
BICKHAM: — somebody else’s —
SCHLEY: — soiled linens, yeah.
BICKHAM: Without a doubt. And all you can really do is prove to them that their perceptions are wrong and do that through good service and products that they were looking for at prices they could afford. It takes all of those things.
SCHLEY: Were you trying to change — how do I state this question? To compensate your managers for improvements on the customer service side? Was that ever part of the formula rather than, you know, if your system’s performing well economically you get a bonus, great, but were there ever any metrics associated with perceptions of service from the customer base?
BICKHAM: Not so much perceptions, but all the underlying metrics that go into that.
SCHLEY: Like what could you measure? What would you measure?
BICKHAM: The easiest one is service call rates.
SCHLEY: Oh, right, okay.
BICKHAM: So the lower the service call rate the better. On time performance for technicians in the home. Solving the problem first time that you interact with a customer. Answering the call quickly. All of those kinds of things are measurable, executable. And so I generally focused on the metrics as opposed to a satisfaction survey, which can be clouded by a lot of different things.
SCHLEY: Never trust a survey, yeah.
BICKHAM: Well, I mean clearly surveys over long periods of time tell you something, but surveys take — looking at a snapshot at a point in time, they don’t tell you a lot. So for me it was let’s focus on the nuts and bolts, the metrics that make a difference. Let’s measure how we did and absolutely people were compensated based on their performance.
SCHLEY: What were you looking for in your general managers as an operations person? What attributes, character qualities? What made a great GM?
BICKHAM: Well, there are a lot of things that go into that mix. I mean obviously someone who understands the business that they’re in. But leadership and leadership style and quality are terribly important. I mean there’s lots of books written about leadership and at the end of the day great leadership is fundamentally about getting ordinary employees to do extraordinary things.
SCHLEY: A great line.
BICKHAM: And some people have the ability to do that and some don’t. Your reputation is — as a leader is about all you have. I mean if you don’t have a good reputation no one’s going to follow you. If you do and if you have credibility and if you are a person of your word and if people see you as part of the effort, not someone there to police but part of the effort, if you care about people, I mean really care about people and their own success, people realize that and it comes across. So for me finding people who understand what leadership is about, but also who fundamentally understand the business made good general managers. I mean it goes without saying that you have to put the energy into it to get the outcome, but leadership makes a big difference. It doesn’t start at the bottom of an organization. It only starts at the top. It’s the person in the corner office that everyone takes their cue from. If they’re a bad leader, then you’re going —
SCHLEY: That’s going to permeate.
BICKHAM: It will and you’ll get poor results. I mean it’s nothing magic about it.
SCHLEY: Could somebody come in who didn’t have any cable industry experience and be a high-quality general manager?
BICKHAM: No.
SCHLEY: You couldn’t just learn the business?
BICKHAM: No, not unless you’re John Bickham and you — and no one’s looking over your shoulder and you’re given this cable system that’s just a piece, a pile of junk, and somebody said, “Can you improve that?” But no.
SCHLEY: Because the business was complex by now, right?
BICKHAM: It is. It is complex.
SCHLEY: Multi products.
BICKHAM: And you need to understand the business from the bottom up. You need to understand how to build plant, how to maintain plant, how to manage installers and service technicians, how to run a good call center.
SCHLEY: It’s a lot.
BICKHAM: How to sell, how to market.
SCHLEY: The AOL Time Warner transaction left a lot of debris in its wake obviously and really, you know, the implications were far and wide, but one of the implications was that organization I think no longer fit well for you? Was that your take?
BICKHAM: I moved to Stamford to Time Warner’s corporate offices in 1998. Again, Jimmy Doolittle said, “Hey, John” —
SCHLEY: One more move in you?
BICKHAM: Yes, and I was surprised because Jimmy was known for not liking to fly and he flew to LA.
SCHLEY: High praise, right?
BICKHAM: Yes, I thought this is really strange because Jimmy doesn’t fly anywhere. And he said, “John, I’d like for you to move back to Stamford and be an EVP and have responsibility for a number of divisions.” And I thought hey, Jimmy’s not going to be around forever —
SCHLEY: Here’s the path.
BICKHAM: So I thought I was — had a chance to run Time Warner Cable in 1998. I didn’t realize it would take 18 years before I’d have a chance to run Time Warner Cable.
SCHLEY: Yeah, well.
BICKHAM: But that’s the way things worked.
SCHLEY: But you did, you took the job?
BICKHAM: I took the job, moved to Stamford, and it was a, you know, it was similar to the job that I had in Houston. Multiple divisions. I spent all my time on an airplane, face to face with —
SCHLEY: So I was going to ask. So you were a field general?
BICKHAM: I mean that’s the only way you could manage is to be face to face to with people. I mean you can do some things — this is before you could sit in front of a computer and — but yeah. So your ability to assess a division leadership starting with the division president and the five or six executives that work for him, to assess how good they were or how not so good they were, to understand the metrics they looked at to manage the business, to understand the things that they were prioritizing in terms of spending capital and where they were spending money, where they weren’t spending money, how they were attacking the marketplace from a marketing and sales standpoint, who their competitors were, how well they were doing or not. To do that requires you to travel and be in front of people and spend time with people and become conversant and understand the issues they’re dealing with. At the time, Time Warner Cable was primarily competing with satellite.
SCHLEY: Okay, I was going to ask about the competition.
BICKHAM: Which is a national company, two national companies, and cable was a highly localized business. There were a few local competitors, but for the most part the big competitor was in the sky. DIRECTV and Dish’s strategy was somewhat geographic, but it was mostly national in the way they approached it and each division, each cable division, had a slightly different approach to dealing —
SCHLEY: To combatting.
BICKHAM: — with that competition. Now, the reality is there probably aren’t that many good ways to deal with a national competitor. How many are there, you know? Some are better than others and what you would find is different divisions would have different ways of looking at that competitor and saying, “This is what we need to do, this is how we need to attack the marketplace.”
SCHLEY: But you didn’t want one uniform approach for your operations necessarily?
BICKHAM: I did and the nature of the job of an executive vice president at Time Warner Cable back then wasn’t quite that broad.
SCHLEY: Interesting.
BICKHAM: And so but I knew just from spending time in the business, I knew that the day was coming where we’re going to have to change, we’re going to have to look at a different model for managing the business, think about the approach to marketing and sales, think about how we’re competing with satellite, the pricing and packaging of video services that were using — there can’t be that many different ways to do it all across America.
SCHLEY: One would presume.
BICKHAM: But when you go to a division it would have — it could have multiple approaches depending on how many cable systems were in that one division. You could even have multiple billing systems and sets of rate codes that were being used to price and package video services to compete with satellite. And so a lot of things had to change and —
SCHLEY: But you also saw the onset of competition for your broadband business at some point, right?
BICKHAM: There was no competition at that point. I mean —
SCHLEY: We didn’t have DSL coming on the scene yet?
BICKHAM: DSL, but DSL was —
SCHLEY: You didn’t consider it worthy?
BICKHAM: I didn’t — to me broadband was cable and the DSL that existed in ’99, 2000 was a pretty weak —
SCHLEY: Was feeble.
BICKHAM: It was feeble. Even though the needs for a lot of bandwidth were limited you could see where things were going and I think most people in the industry realized that we had this competitive advantage that was going to last for a while, not forever, but for a while.
SCHLEY: And I did — I took you ahead of the game a little bit, but the move to Cablevision Systems for you to become an executive with Cablevision System was motivated by what?
BICKHAM: Primarily — well, it was two things. One, I knew Tom Rutledge, he was there, he had been there for a year and a half. And I found it attractive to the idea of going to work at Cablevision. Rather than an MSO it was one big system. Rather than a multiple system operator it was one big system.
SCHLEY: Very big market.
BICKHAM: With the tristate area, good market. So to some extent I wanted to see if my ideas and theories about how to manage a consistent business throughout every square inch of your business would work. The other side of it was AOL and things had really never gone that well after AOL acquired —
SCHLEY: I guess that’s what I was trying to allude to earlier.
BICKHAM: No, I mean I think AOL Time Warner lost its focus on the cable industry to some extent during that timeframe.
SCHLEY: Which is ironic because arguably that was a prize of the business, but whatever.
BICKHAM: You would think.
SCHLEY: But did your theories of uniformity and focus and concentration work? You said you wanted to test it out at Cablevision.
BICKHAM: I think it did. We had — I mean at that stage we had digital video and we were deploying digital video and it was almost at the very beginning of that.
SCHLEY: Which meant more channels, right?
BICKHAM: Yes.
SCHLEY: More stuff.
BICKHAM: Tom had restructured an agreement to buy set top boxes from Sony and we wound up buying boxes from Scientific Atlanta so the path forward on that was good. The internet service was growing by leaps and bounds and we knew that was going to be a winner. And we introduced landline voice. And back then I remember looking at Verizon customers on Long Island. They were typically paying $65-70 a month for —
SCHLEY: On one line.
BICKHAM: — for a line. And we thought we might be able to do better. And about that time, we were launching voice and we launched the triple play. So $29.95 for each service.
SCHLEY: Phone, internet, and video package.
BICKHAM: And video.
SCHLEY: Which honestly seems like quite a deal from a consumer vantage point, right? Because it was aggressive price.
BICKHAM: It was. I mean regardless of why the consumer wanted to talk to you about buying something, they couldn’t find a better price in the marketplace for whatever that product was. And the only thing we sold was the triple play. I mean we structured our commission plans so people sold the triple play. We trained the organization to sell the triple play and we marketed the triple play in the tristate area in a way that said why would you ask for anything but this. If you’re interested in video why not get the triple play. If you’re interested in data services why not get the triple play. I mean for 90 bucks which is a few dollars more than you were paying for —
SCHLEY: Your landline phone.
BICKHAM: — your landline phone you can get all these products. And we grew rapidly throughout the tristate area. Now to do that was not so complicated because some of the infrastructure to create that single billing relationship, single billing environment, had been created. We had people at Cablevision who were good at software development that created — you would think that just selling triple play sounds easy, but you have to provision all three of those services and historically they had been provisioned uniquely and separately and now you’re going to install all three services in a home and provision them all three at the same time.
SCHLEY: A little siloized.
BICKHAM: Got to work. It’s got to work. And it worked well.
SCHLEY: That’s the hard part though about the business, right? It’s never quite as easy as you want it to be, you know?
BICKHAM: It’s the nuts and bolts usually trip you up.
SCHLEY: How is that Charter came a-calling to you then?
BICKHAM: Interestingly enough, I remember Tom and I went to Denver to talk to Neil Smit in about 2009.
SCHLEY: Neil is Comcast’s cables guy?
BICKHAM: Neil was running Charter at the time.
SCHLEY: Oh, okay.
BICKHAM: And Tom’s argument was you guys ought to sell to us. We were at Cablevision at the time. You ought to sell to us.
SCHLEY: Bold idea.
BICKHAM: Yeah. And actually, it was right after they came out of bankruptcy —
SCHLEY: After Charter came out?
BICKHAM: Yeah. It was right after and the private equity guys that owned all the equity didn’t want to sell it. They wanted to let it run for a while and so that was my first look at Charter. And I left Cablevision in November/October of ’11 and I think Tom left in December or January and he went to work for Charter almost immediately. And he says, “Hey, you want to go to work at Charter?” He said it was going to be a piece of cake. I remember the first board meeting I went to in June of 2012, I remember what I told the board. I said, “The problems here at Charter are not that complex, but the list is really, really, really long.” And somebody said, “Like what?” And I said for one thing 65% of all the work we did in the home with a technician, 65% of all that work was done by contract labor and we had very poor control over that contract labor, the quality of it and the timeliness of it.
SCHLEY: It’s a third-party operator.
BICKHAM: And over half of all the phone calls were answered offshore including a lot of sales calls. We had service call rates in part of the company of 10% —
SCHLEY: Meaning what?
BICKHAM: Meaning 10% of the customers were every month called us for a service call.
SCHLEY: That’s a big number.
BICKHAM: That’s a really big number. And we had — I had been around there long enough to take a look at how many drops were connected to a home that shouldn’t be connected to a home and 10% of those were — that shouldn’t be, were connected. So it’s really hard to sell service to someone who’s getting it for free, really hard.
SCHLEY: That’s an impediment.
BICKHAM: And I said it’s simple. I mean the company had gone through three or four or five years without spending any capital because they didn’t have it and then they went through bankruptcy and so they didn’t buy trucks, they didn’t buy tools. They weren’t replacing cable that needed to be replaced and so if you’re not going to replace cable why do maintenance? So maintenance had gone away and so we had problems with power supplies that weren’t working and standby power supplies that weren’t working so —
SCHLEY: And all of this was visible to you? You could just look at the data and the metrics and the reports and you gleaned this information?
BICKHAM: Yes.
SCHLEY: Not a pretty picture.
BICKHAM: And making a lot of visits. I mean I spent all that time on an airplane. But the point is it was really bad. It was worse than Tom told me that it was. That’s what I say. And the good thing is that there was plenty of upside.
SCHLEY: Nothing but, right.
BICKHAM: When you look at Charter, look at the history of Charter, not to bore you, but Jerry Kent created Charter in 1993 and by 1998 he had 1.3 million customers. And Paul Allen bought Marcus Cable in 1998 and it had a like amount of customers in 1998 and by 2000 Paul Allen had assembled a company with seven million customers. They were all video customers, seven million. So by 2012 when I got to Charter the company had four million video customers, not seven, four, and 3.8 million internet customers and 1.9 million voice customers. So I mean it was — Tom calls it a diamond in the rough. It was rough.
SCHLEY: But there was upside, as you say. You could make it better.
BICKHAM: I could make it better. And in some sense the story wouldn’t be at all complete without mentioning one particular thing. At that moment in time, we were able to hire what I think were the best executives that existed in the cable industry. We hired Jon Hargis to run marketing and sales. We hired Scott Weber to run network operations. We hired Tom Adams to run field operations. We hired Jim Blackley to run IT and engineering. And we hired Kip Mayo to run customer operations. Now, all of those individuals had at a minimum 20 years, 25 years of cable experience and all of them had been at Cablevision. And so Tom and I knew them really well. They knew us really well. They know how to do what they do better than anybody I know. And so day one we had plenty of —
SCHLEY: An infusion.
BICKHAM: — leadership. We had plenty of leadership that knew what they were doing. Then it was just a matter of getting this company that was dead in its tracks moving.
SCHLEY: And you obviously did that and then suddenly around the corner are the big acquisitions. So now you’re running the company better and now you’re going to digest a huge amount of operations.
BICKHAM: Yeah. And Time Warner Cable and Bright House were, I don’t know, over twice as big as we were, I guess.
SCHLEY: I think that’s what we discerned, we decided, yeah.
BICKHAM: But —
SCHLEY: But nowhere near in the bad shape of what preceded them.
BICKHAM: No, I don’t think so. But the nice thing about it is we had an organization that understood the game plan, how to go about it.
SCHLEY: That’s a great point.
BICKHAM: We hit the ground running. From day one we said we’re not going to bolt this together, we’re going to integrate it. And we changed the management structure, the organizational structure, of Bright House and Time Warner Cable to fit what Charter had at that moment in time. It just became a bigger company managed the same way. Then it was a matter of getting the playbook in place and people moving in the same direction. And we knew from the get-go the risk was. If there was a risk to the whole thing it was that it would take too long.
SCHLEY: I was just going to ask about that —
BICKHAM: I mean that’s what kills most M&A is how long it takes to get the benefit of what you’re looking for. You know, the benefits of consolidation, the economies of scale, some of them are easy like more buying power —
SCHLEY: Sure, purchasing power.
BICKHAM: Those are easy. But the benefits of scale that come from having a bigger network, those only come about if you can truly make it look like one network, one organization, same playbook, executing the same way, selling the same thing, going to market the same way.
SCHLEY: And in your case taking that management talent and kind of flooding it over a larger playing field, right? Kip and the people you talked about.
BICKHAM: Well, they each wound up with much bigger organizations. Kip probably had 35,000 employees, Tom Adams probably had 35,000 employees. Those are big organizations.
SCHLEY: What are you going to miss about this business?
BICKHAM: (laughter)
SCHLEY: And I know it’s probably a long list, but just give me a couple of top liners.
BICKHAM: Mostly people. When you invest your greater part of your day and week and month and year in a business it becomes significant and the discussions and the debates and the — all of that sort of thing you miss.
SCHLEY: Because what’s interesting in talking to you is I think what we call operations, there’s a lot of creativity to it that doesn’t always necessarily meet the eye at the surface level. You’re making decisions. You could decide this, you could decide this, and there’s a lot of brainpower and —
BICKHAM: Where do you spend your money? And increasingly it’s money on software.
SCHLEY: That’s changed a lot.
BICKHAM: So the software sits on top of these legacy environments and makes the network and the environment look consistent to the employees who are having to manage the network. Even though you have some legacy —
SCHLEY: The plumbing might be different.
BICKHAM: Legacy plumbing of various types. So we spent a lot of money on software.
SCHLEY: I was going to sort of take you there and ask that question about what do you see. Where will the action be in the future, five years hence? Perhaps in that area, elsewhere, what else do you think?
BICKHAM: The business has become increasingly sophisticated in terms of the integration of these products. I mean the deployment of wireless sounds like a standalone business, but only if you let it be a standalone business.
SCHLEY: Well said, right.
BICKHAM: You can sell it as a part of your proposition and the network can recognize those devices and treat them differently than it treats other devices and so I’ve heard it said and I think it’s true that 80% of all the data that travels over an iPhone or an Android phone travels over cable network.
SCHLEY: Rather than the cellular — external cellular network, yeah.
BICKHAM: The cellular network increasingly is, you know, it’s necessary, but it’s increasingly a smaller and smaller part of what people are doing.
SCHLEY: Necessary, advisable to avoid sometimes if you can. Just go to the Charter network. Okay, last question, John, and we’re going to set the ground rule where you can’t say Tom Rutledge as the answer to this question, but who has been an extraordinarily influential figure in all this for you? One person, two people, I’m going to put you on the spot.
BICKHAM: You know, I didn’t work for either one of these guys directly that I’m going to mention, but for a variety of reasons they opened my eyes. John Malone being the first person I’ll mention. I always say most people play checkers, John plays chess and he’s got a magnificent mind and he can look at issues from a variety of different ways and some of which don’t look like they are related and they all tie together. And I’ve always enjoyed listening to him talk and talking to him.
SCHLEY: Same.
BICKHAM: He’s impressive. And Chuck Dolan. So I got around Chuck Dolan when Chuck was pretty much out of the business although he was still pushing Voom and a few other things when I got there, but he’s an interesting guy because I’ve never seen anyone willing to bet it all at the drop of a hat.
SCHLEY: Really?
BICKHAM: Not like Chuck. He’s absolutely fearless and I’m not exactly fearless that way. So it was wonderful being around someone who looked at life that way and thought about it that way. He was always really good to me. He would come into my office — if he was in the building he would come into my office and —
SCHLEY: Chat it up a bit?
BICKHAM: Yeah, he would always say the same thing, “Are we winning?”
SCHLEY: Really?
BICKHAM: Yeah, “are we winning?” I’d say, “Yeah, Chuck, we’re winning.”
SCHLEY: What a great story.
BICKHAM: You’re damn right. But I like Chuck and I enjoyed the time around him.
SCHLEY: This has been an extraordinary conversation and I appreciate your willingness and patience in kind of recounting your journey and in doing so telling us where this industry’s been and kind of where it’s going. So thanks to John Bickham, thanks to you for watching Hauser Oral History Series presented by Syndeo Institute at the Cable Center. See you next time.
