Interview Date: August 13, 2005
Interviewer: Kristin Van Ormer
Series: Broadband Communications Assoc. of Pennsylvania Series
Abstract
William Domurad describes his start in cable working in operations, franchises and marketing. He explains marketing in rural communities, mentions his involvement in CTAM and PCTA, financing, and collegiality in the industry. He discusses the launch of Clearview Partners, the conversion to fiber, and a potential legislative challenge. Domurad explores regulatory challenges and the need to keep current on technology, mentioning the Cable Academy. Next, he comments on some of the advantages of being a small operator, how decisions are made regarding technology changes, and competition from Verizon. He talks about programming issues, the move from analog to digital, and the complexity of the current industry. He concludes with reflections about the PCTA (Broadband Cable Association of Pennsylvania) as well as the legacy of cable in the state.
Interview Transcript
WILLIAM DOMURAD: I was involved in a marketing company outside of D.C. and in 1980 we had sold it. I came back up to York wanting to see an old college professor who was a vice-president at Merrill Lynch and I was going to do some investments. I said, “I don’t know what I want to do with my life,” and he said, “How about computers? That seems to be the biggest thing,” and I said, “You mean the ones that are the size of the room?” And he goes, “Well, yeah, kind of,” and I said, “Well, yeah, I guess I can.” He said, “But there are a couple of people that have a company and they’re looking for a corporate development person. Would you be interested?” I said, “Yes, if I can have a little interest in the business.” We chatted for a little bit further and I said, “What is the business?” He said, “Cable TV.” I said, “Is that where you pay for your TV?” and he goes, “Yeah.” I said, “Well, I just pay the bill, $5.25. Is that ever going to go anywhere?” He looked at me and he said, “You’re entrepreneurial, you’re a risk-taker, why don’t you take a look at it?” So I did. I interviewed with two gentlemen and at that point I decided to go along with them and go after starting up cable companies throughout the eastern part of the United States.
KRISTIN VAN ORMER: And who was that with?
DOMURAD: That was with Alvin Miller. There was a corporation of a couple of individuals together and that broke up in ’84, so Alvin and I again came together and did some additional cable systems from Maine to Florida, so it was quite an interesting…
VAN ORMER: So exactly what were you doing? Were you getting franchises, building the systems…?
DOMURAD: I was in both operations, franchises and marketing, so I was kind of a little bit of everything.
VAN ORMER: Sure – like many people, wearing a bunch of hats.
DOMURAD: Many people in the industry. Whatever needed to be done, you jumped in and did it.
VAN ORMER: So you were involved with marketing, what were some of the maybe negative perceptions that you had to overcome with marketing, or lack of perception at all?
DOMURAD: It was both in franchising and marketing, it was basically the same thing, and it’s actually a two-step. First, there’s always the community that says, oh, we don’t need that, but at the same time, I recall in ’81 being down the eastern shore of Maryland doing a franchise and President Reagan was shot, and it came across and I think it was on one of the network news and they only had a quick bleep of it and they went back to the soap opera, and I basically turned to the mayor and said, “If you had this now, we have 24 hours of news – CNN – you’d be seeing it all the time. You’d know exactly what’s happening.” That deal was done right there, so that worked out. Now on the marketing side, it was interesting – in some towns, after they heard that we had cable, people just came outside as soon as our trucks were there for construction. They wanted to start signing up. It wasn’t like nobody was interested in it. It wasn’t as easy as that in some areas, but as time went on people understood that it had value.
VAN ORMER: So at that point, in the early ’80s, you were still concentrating more on rural markets or were you really moving into the urban markets at that point (you personally)?
DOMURAD: More rural markets. I got involved in an urban market in Baltimore. I was involved with a group that was going to put a bid in. Baltimore and Philadelphia, as you know, were two markets that were the last standing, but it go to the point where everybody had their hand out, everybody wanted to get something out of it, and in my point of view it wasn’t worthwhile. So I kind of moved away from that and back into the more rural areas. Between the two urban areas there were a lot of areas that you could fill in and I felt that was just fine. I like dealing with those types of people, too. It was just fun to deal one-on-one and talk to the different communities that didn’t really understand what the whole complex was because they heard all types of rumors, you know – “the earth stations are going to make everybody impotent in the community” and it was like, come on, that’s not the way it works. So it was a different look into it.
VAN ORMER: Did you have any involvement in the organization of some of the early associations like CTAM?
DOMURAD: I attended a lot of the CTAM and PCTA, at that time, which is now Broadband Cable Association of Pennsylvania. I should know that, I chaired that when they changed the name, bringing it back to our roots. I was involved in the early ’90s. A gentleman by the name of Stan Singer, who was then president, he and I talked about a number of issues and stuff and one or two were on a political situation that was happening and he asked – I was in a particular area – if I could go talk to those people since I knew some of the folks and I said, “Sure.” He kept talking about the association there and in the early ’90s I joined that one and became involved in that and since that time have served in a number of capacities, executive committees and chairman, now past chairman.
VAN ORMER: So what was your progression like? Walk us through what you did from being involved in all those marketing, franchising… from there to here where you’re at with Clearview Partners.
DOMURAD: We’re always looking for opportunity to expand like most businesses, so if you had an area that wasn’t franchised you franchise it. You try to talk to the people who maybe have a smaller system and try to bundle it together with yours to make it a better economics, and we would do that too. We purchased cable systems. Sometimes they didn’t make sense to try to expand them any further because there were some larger companies that had bought around it or somebody else had paid a lot more and it just didn’t make sense. As far as the migration from that point, I would say that it was in the… I guess it was ’85, ’86 when we did some limited partnerships to grow our business because it’s capital intense so you know you couldn’t do everything that came out of your pocket or the bank. I know in 1980 we were one of the first cable lends from a bank down in Maryland, First National, that has now moved to M&T Bank, but we’re still the oldest and first cable system that they lent to, and at that point they had nothing as far as their capacity but they did close to a billion dollars before it was transferred to M&T, so it was something that was interesting to watch as their business grew and ours grew. They always would call us up and ask us about different deals that they were doing and what we thought, so it was fun to see that side, but I also then got on the financing side of how we put these deals together, which was also intriguing. The industry changed in different directions so we changed too. You just watch and learn from some of the larger players what’s going on and say, yeah, I think we can do that too. There was no real place you could go to and say, okay, I’ll learn that. So it was kind of something that… I think one of the great things in this industry is the camaraderie that you have with everybody. They’re willing to share so much with each other. You can talk to people in a big company if over the years you’ve made acquaintances with some of those people and they’re just great people, they really are. I know people have left the industry and they’d call me or send me and email or something and I’d say, hey, you ought to come back, and they’d say, we miss it. There were so many great people in the industry and they’d always help you out, and I think that’s one of the things that helped us grow a little bit and it was a learning session, just like now. There are a lot of things that are changing very quickly. One group can’t do it by themselves. I think that’s important that you have that relationship with the industry.
VAN ORMER: Sure. Things are changing very quickly right now, and I’ve got a lot I want to talk to you about on that front, but right now what are you doing with Clearview Partners, and describe that to us a little bit?
DOMURAD: Clearview Partners we started back in the mid to late ’80s and at that point it was a new franchise down in Maryland. We built it from scratch. We competed with two other major companies. We beat the other major companies and got the franchise. At that point we started building it. There was an opportunity to buy another small cable system so we bundled that with it and bought out another partner and grabbed another cable system, so we had three headends and a microwave, and what we did with the oncoming addition of fiber optics, which was a great thing for the industry, but the pricing, when it’s been out for a long time, didn’t get down to the economics where you can employ it. Well, when that started dropping we were able to move from three headends and a microwave down to one headend and it made it very efficient so we can build on some other products and things that we wanted to do, and the reliability, also, was a big thing too. That helped out because if you had five, six power and utility companies that you’re dealing with, it was confusing. If the power would go out here in one area because the power company is over here, the people in between said, hey, how come I don’t have cable? So it was one of those things that you had to try to build into it where it would keep working itself out, and it did very well. So we’re down to one and we’ve now moved from just your plain old cable, of course, from a number of years ago to the digital and the high-speed internet. Again, one of the concerns that we have and one of the reasons I was involved with the associations, both national and state, was in this state we had what was called House Bill 1560, which was forced access, which means you build a plant and anybody else can put it in there. I had a testimony with Senator McCall from the state of Pennsylvania here, and he said, “Well, we’re thinking about doing this bill, you’re on record.” I basically said, “That’s fine. If you put it in there I’ll go to the next state to deliver that service because it really is our money that we’re putting up for this business.” At that point it was kicked out, but it was again that thing where the political side was trying to so-called even the playing field, but they weren’t evening the playing field. Smartly they chose not to pass that bill and in that time we expanded into the fiber and the internet and it’s gone gangbusters. It’s absolutely wonderful, amazing. No matter what area – you said urban or rural area. I think sometimes people that you never would expect would take it want it now, and it reminds me of the days starting out when people would say, yeah, I want HBO, the movies, or the sports, and it’s fun to see that happen again.
VAN ORMER: In today’s climate, as a smaller operator, what are some of the major challenges that you’re dealing with right now?
DOMURAD: The major challenges I would see are, again, talking about the political situation… you have some new services, they don’t understand them, and so they want to regulate them. They want to control that. I think in its infinite wisdom, the FCC said, “No, keep your hands off, let it develop,” and I think that was important, as have some of the states, they’ve done that. In one degree it’s a political thing that can affect your business and it’s a big problem if it goes in another direction where it starts using things… Bills that will affect you. The other part is learning the curve on the new products that are coming out. We spoke about digital, we spoke about the internet. Now we’re talking about HD – high definition. We’re talking about Voice Over IP – VOIP, as they call it. So there’s a learning curve there and it’s like, okay, how do I get to that learning curve? Who’s doing what? You get to the sessions… we have a thing here in this state called Cable Academy that brings those people in and talk about it. You’re talking to vendors, you’re talking to other operators – “What are you doing?” In fact, at this recent meeting here, I had a discussion with one of the operators, one of the major operators, that we ought to come together on a couple of issues because we were very close as far as geographically that would benefit both of us. So we’ll be in a discussion and “Okay, that’s great! How can we do that?” Because now we have other people that see our business as very profitable, a very good business to be in, and gee, the broadband can bring a lot of different products across there – yesterday, today and tomorrow. So, it’s something that’s not going to go away in a heartbeat.
VAN ORMER: And maybe you’ve just answered this question, but what are the advantages of being a small operator in this environment of new technologies and constant innovations?
DOMURAD: I think the advantage is that being a large operator there’s a lot of focus on the minute you do something, right or wrong, it’s in the press. If there’s a problem… because a lot of times you’ll do a test on something and if the test isn’t quite what you’re wanting it to do everybody’s jumping on it, and the public companies have a lot of pressure on them to perform and stuff. The smaller operator, I think the advantage of that is I can pick and choose, and we answer to our own stockholders, we basically control our own interests, but still you look at it and say, “Let’s do what’s the best for the company and the stockholders.” Everybody tries to do that but I think there’s a little bit of force from Wall Street to say, “Hurry up and produce,” but we’re finding out we’re producing just as well as the big operators. It’s something that as a small operator you have a lot more areas that you’ve go to move faster on, a lot less people that you have to do those same jobs that the larger one does, but you have opportunities that you can more around a little bit easier.
VAN ORMER: And what is your decision-making process as a small operator, where your bottom line isn’t necessarily your shareholders, to make decisions of picking out the many technologies that are available? How do you make these decisions?
DOMURAD: History. I look at the history, I look at the numbers of other operators and see how they’re doing. When you see those numbers you see how fast it’s moving along. Like internet versus digital, when that first came about you saw how the internet was just flying out and the digital was slowly moving along, so it gives you an indication of what the people want. Surveys are another thing that we’ve done to see what the folks want. We recently did a fair called the Mason-Dixon fair down here that has 40-50,000 people show up, so we do fairs, we talk to the people and we see what it is that they want. It’s always interesting – one, to get a feel of what they think of our service, give us some feedback there, what do you think of additional services and how you’d respond to it. At that point in time you look through it, you see what the cost analysis is to figure out what the rate of return… how are you going to get a rate of return on this? You just can’t put a lot of money out. Someday the bank’s going to knock on your door, as they do often, and say, “What are you doing here?” So we work through that process, and again, just test the market. I think we’ve done very well doing that in that progression.
VAN ORMER: In the landscape today – of course I think the word that’s on many people’s lips right now is Verizon, and the face of competition is changing a little bit, more competitors are coming into the field – how do you think this is going to shake out in the next five years, ten years for cable? Who are going to be the major competitors, how is cable going to change to remain relevant and differentiate itself from the competitors it’s going to have?
DOMURAD: I’m not familiar with that name? What was that? Verizon? There are quite a few questions there. How’s it all going to shake out? Verizon has a lot of money and they’re going to be very competitive. I think, though, they have to more or less, instead of competing today with the video – they looked at the video and the voice – I think what they’re looking at from my standpoint is that… a good example is Tampa, where they lost market share. Their different products that they have are dwindling down. They have an antiquated system that they have to rebuild. They have to spend a lot of money. So at that point in time I think we’ve got a leg up on some of the services we’re doing, and they’ve now got to come into our arena to start competing with some of the services we’ve been providing for a long time. So we’re adding on some of the services they have, we’re looking into that area. Yes, they’re going to be a very dominant provider, but I think cable’s going to hold its own, and not only hold its own because of some of the new products that will be able to lead that industry, and I think you’ve seen a lot of different tests on the products that we’ve offered today and what we’re going to be offering in the future. I know some of the larger operators and what they’re doing on Voice Over IP – tremendous return as far as penetration. 30% in the first year, I’m hearing, or higher. So what does that tell you? That’s a core service that Verizon and others have had that they’re starting to lose revenue share on. I think that bothers them. That’s a tough point to sit in that meeting, too, saying, hey, now what are we going to do with these cable people? In years gone by they’ve always thought of the cable industry, “They’re not really a true business,” and suddenly they’re realizing that we have a lot of clout, a lot of business and we’re doing very good business. Were there some other questions in there that I missed?
VAN ORMER: I think you pretty much covered that. Well, with the added competition… competition can be a real advantage. It can make you leaner, it can make you stronger as a business, and maybe you kind of addressed this, but what are some of the things that cable will be doing in the near future to make them a stronger, leaner business as they have more competitors coming into the field?
DOMURAD: I agree with you that competition makes you sharper. It will give you more detail of what the consumer wants because it really is about the consumer. If you’re not keeping them happy – and price is not always the indicator – but it’s customer service, how you’re being treated, how you’re taking care of the customer, how you’re communicating with the customer. I think this industry hasn’t always communicated. We’ve always said, “Look, we’re not going to pat ourselves on the back. We just go ahead and do our job,” and I’ve seen that over the years in systems that I’ve been involved in. You just go out and do your deal and you don’t have to put your name all over the place, you just do one thing at a time, but now what we’re doing with a lot of different products, you have to tie that all together in a neat marketing package and I think we have to do more and more of that. CTAM is a perfect example of a good instrument that cable operators, independent and large, can use to benefit out of it. So I think it’s important.
VAN ORMER: Have you been involved much in public policy lately? Do you think there’s any public policy initiatives that are coming down the pike that will kind of help level the playing field for cable?
DOMURAD: I don’t see any for cable. I always see it on the other side that they’re trying to take a little something… in the past, I’m a little prejudiced on this side, it hasn’t always been an even playing field, and a good example is the dish, DBS. There are a lot of independent operators out there and they’ve got a few million subscribers. You’ve got companies that have 5,000, 10,000, 20,000, 30,000 subscribers. Well, that’s not an even playing field. That’s one-sided. Dealing with sports where they were able to get sports and we couldn’t, certain sports. Well, I don’t think that’s an even playing field, and I think it’s important. You know what? I don’t mind playing on an even playing field. If it’s square with everybody, that’s okay with me. I don’t mind competing, rolling up our sleeves, but that’s why I think it’s so important for small operators, large operators to get together with their associations, both state and national, to get that message out, get that information because I think in the earlier years we said we’ll be quiet and nobody will pay attention to us, but that doesn’t exist anymore.
VAN ORMER: How has programming been for you in the context of being a small operator? It’s obviously a boon in that you have so much content to offer to your consumer, but costs are high. Have you joined with ACA or…?
DOMURAD: ACA is more the political end, NCTC is the buying co-op that’s involved in that, and yes, we are involved in that because you could be picked off by programmers independently versus what they’re doing as a group, and yeah, I feel a certain pain when you said programmers. Yes, it’s something that we’re always watching and there are some that, as we’ve rebuilt our cable system, people say we want to put you on analog and there are some other programs that we look at and say, you know what? We’re really pushed to the limits on analog and everything’s moving to digital and we’re going to have to put you on digital, we’re going to have to put you on digital. Of course they don’t like that, they’d prefer to be analog, but I think it’s something that we look at the programming, we look at what our customers would like and enjoy, and in some of the digital things that we’ve done is instead of putting as much on as possible we’ve tiered it a little bit and said if you want more sports, we’ll get it for you. If you want more of the movies, we’ll get it for you, but you’re going to have to pay a little different instead of making everybody pay for the whole thing – kind of a grocery store of entertainment and information.
VAN ORMER: How are you seeing the digital trend panning out within your consumer base? Are you still doing a lot of analog? Is it really transitioning heavily to digital?
DOMURAD: You mean moving the programming from analog to digital? It’s transitioning. We’re moving. That’s where it’s all going. It’s going to get there.
VAN ORMER: So it’s steady.
DOMURAD: Yeah, and also, you’re aware of the FCC rules that everything has to be digital by a certain period of time, and I haven’t checked my email, so I don’t know what the new date is today. I know it was different six months ago. I think there’s a rush to make things happen quickly, but things weren’t capable of doing that on the consumer side. There are a lot of consumers that may not be up to buying different sets.
VAN ORMER: I want to talk a little bit about your perspectives of the Pennsylvania cable community. I know you’ve had experience with a lot of different markets, but Pennsylvania is really unique in a number of ways. One being that there are a lot of small operators still running family-run businesses, and there’s just a different culture here. What would you attribute that to?
DOMURAD: I would say it’s the entrepreneurial spirit that I’ve seen with the different smaller operators. I think this is nation-wide for the independent operators that they have that entrepreneurial spirit. When they started doing the different venues of just cable, then HBO, expanding into it. I would just say it’s a grassroots type thing and people felt in some cases, this is from one family to the other, that it’s a great business. You look at a lot of it and I know some family members that got away from that business and came back. I know people that have left the industry and really want to come back or have come back because it is a great industry. I think it’s a sexy industry, it’s a fun industry, and there’s something happening all the time. There’s something new happening. Where at one point we’re on only two or three revenue streams, now we’re on five, six, seven revenue streams. Again, grocery store of entertainment and value for the consumer. So being part of that and still being able to not go through six layers of management to make a decision, I think there are a lot of people like myself – and I’ve dealt with large corporations too, and you have the political side, the personalities and stuff and we’ve got to weigh this and everything – well, I think the small entrepreneur will say “I want to do it, I’m going to do it because it’s a gut thing. I’ve weighed it, I’ve valued it, let’s go do it” and it can get done. I’ve always seen that happen.
VAN ORMER: So, you mentioned that you were chairman of PCTA when they went through the name change. Can you talk a little bit about the decision making process of changing the name of the organization that had been called that for what? – close to 45 years by the time you changed it?
DOMURAD: Something like that, yes. I think what we looked at is how the political end up in Harrisburg and other areas looked at our name, and people said first of all, there’s a lot going on so we wanted to get more information to this people, be able to communicate with them, and so-called brand what we are just like what we were trying to do in marketing in our own systems. When people go, “Well, it’s P, C, T…?” They couldn’t figure it out. “And what is P? I guess it’s Pennsylvania it stands for?” Well, when we looked at it, our marketing committee put together some input on how the different operators felt about it and how different things were happening, and one of the things I noticed too was that the competition was saying, well, we’re going to be the broadband of the future. Well, that bothered me and a bunch of others to the point that we said, “Okay, let’s take a look at some options here.” What we found is that broadband was back in the ’50s, the name, and it’s something that we’ve always had, so it was our birthright. Why should we have these people that do great marketing programs come in and steal our birthright? So we took a look at it and we ended up changing it to Broadband Cable Association of Pennsylvania to bring that back in. Now, I’ve got to tell you, there are some pioneers and other people that were not real happy that we were changing a name that was around for a long time, but after sitting down and talking to some of them on the phone and saying, “Well, remember this company? What was that called again? It was Broadband…” Aah, yes. Again, we ought to go back to our roots and bring back what was our birthright. It’s come off very well. I think we’ve got an excellent response up on the Hill and just in the community. So it’s something that I’m excited that we moved forward on. Again, the association being the type that will move quickly when it needs to, just like the independents that you spoke about, and they’ve moved very quickly under the new regime that we have here and did an excellent job.
VAN ORMER: What would you say that the legacy has been of the Pennsylvania cable operators to the industry as a whole, besides the obvious of being John Walson in Mahanoy City?
DOMURAD: You mean the founders of the industry? I think as you look at it as people – and it’s really about people – that had ideas and were willing to move behind those ideas. At one point a lot of it moved out to Colorado, some of the major headquarters, and now some of the major headquarters in the industry are back here in Pennsylvania again, and I think it’s people that make things happen. If you look at some of the big companies, they started out very small so they still have some of that entrepreneurial pioneering spirit, and yes, they’re very large public companies, but some of the people at the head understand that, they were there when that started that way. And as some of the people in that same family and different families take on that responsibility, they too have that passed on to them. So I believe there are a lot of people that look and say, yeah, if there’s something these people in Pennsylvania are doing we’d better watch it because we want to see what they’re doing and I think we’ll follow also.
VAN ORMER: I know you’re going to be involved in the industry for years to come, but I know that you probably feel, well, I would hope you feel that you’ve made an impact already and what would you say that would be? What’s your most rewarding moment or what do you feel maybe your own personal legacy has been on the industry?
DOMURAD: You look at all these great people out there and I don’t know if I really have a legacy. I’m thrilled to be around those folks. One of them that we bumped into coming in here, Les Read, some of those folks – I know a lot of those folks and it’s just fun to be a part of it and be with some of those folks and see them and be able to chat with them about old times and where the future is, but I’m not sure if I per se have a legacy. What really excites me and I have since I was in college always thought about wanting to have a business that I can bring something to the consumer, something to people that they’d really enjoy. If you ever see the opportunity, and I know we had this at this last fair, to talk to somebody that never thought they’d have high-speed internet. They ask the question and we look at it quickly on the map and I say, “You know what? We’re going to give you a call. We’ll have an engineer go down and take a look. I think you’ll have high-speed within the next sixty days.” The guy just about kissed me. It was like no, no, okay, this is great. But just to see the excitement in people that you can bring something to, I think it’s pretty neat, and it is fun to be part of something that for years people look back at the internet and being able to bring it into the community, bringing cable to the community, bringing internet, bringing digital and whatever comes forward, if it’s voice or whatever, into these smaller communities which would not always have an opportunity to have what some of the urban/suburban areas have. So that I find is very exciting and rewarding.
VAN ORMER: Good. Well, did you have anything you wanted to add that we haven’t discussed already?
DOMURAD: No, just thinking back on everything, I’m thrilled to be part of this industry. When you first start out you look at things and say where would I want to spend my life work at doing and I don’t think I would have changed that decision. I’m just thrilled. Knowing the people that are involved with the industry is exciting, the things that we do… there’s a lot of hard work in the past and one well-known founder told me, “You know, Bill,” and this is about five years ago, “if you think you’re busy today, this is the least busy you’ll be for the next term of your life in the cable industry.” and he was right. We look at it and say, wow! This is a tough stunt, but enjoyable, something that you look to and again, it’s the people that I really enjoy working with.
VAN ORMER: Do you feel it’s going to be a challenge to keep that kind of appreciation and attitude going with some of the younger people getting involved in the industry?
DOMURAD: That’s a good question and I really think it’s something that has to be fostered by the people that own the companies, that manage the companies, to bring them in. What we’re looking at, at the state association, BCAP, is to bring some more of the younger folks in that are people just coming into the industry and we have a thing called Cable Academy that is not only educational, as an academy is, but it also gives a time to socialize with some of the people that are of all levels and to give them a little bit of history and culture that they can build on to see how, you know, “I was around when the internet first started,” and I had heard that last spring when somebody said, “Yeah, I’ve been here FIVE years in the industry, and I remember when we first started on internet.” Half laughing you walk away and say, “Yeah, I remember when I brought cable to this town that didn’t have cable.” So yes, I think that’s something that we can’t let go by. I think you have to build that too because at that point in time they will have a vested interest in the business, and I think that’s with any business. People are people.
VAN ORMER: Great. Bill, thanks so much for sharing your perspectives and your time with us today. We appreciate it.
DOMURAD: Thank you very much.
