Interview Date: August 19, 2024
Interviewer: Jeff Baumgartner
Abstract
Patrick Murphy is currently EVP and CTO of Astound Broadband. He talks about his start in the cable industry doing construction in Los Angeles with Falcon Communications. He traces the advancement of his career through Acton Communications, Group W Cable, Simmons Communications, and Charter Communications. Murphy describes the technical challenges of deploying high speed data service with Com21 and Motorola SurfBoard modems, Video on Demand, and digital video in the 1990s. He describes the creation and development of Patriot Media which was later sold to Comcast. He than talks about the development of Astound from the acquisitions of RCN, Grande, and Wave Broadband, and the current challenges faced by operators. He discusses upgrading plant through fiber overbuilds, DOCSIS 3.1 and 4.0, the significant increase in commercial customers, and Astound’s intended participation in the BEAD program. People mentioned include Ray Tyndall, Frank McNellis, Steve Simmons, Jerry Kent, and Tom Jokerst.
Interview Transcript
JEFF BAUMGARTNER: Welcome to this edition of the Hauser Oral History Project. I’m Jeff Baumgartner, and I’m pleased to be joined by Pat Murphy, who currently, as we sit here, is EVP and CTO of the Astound Broadband, which includes RCN, Grande, and Wave. Who else is on there?
PATRICK MURPHY: Digital West, EnTouch, Harris, a bunch of small acquisitions that we put together under one roof.
BAUMGARTNER: But it’s all under the Astound umbrella now?
MURPHY: Yes, it’s all under the Astound name.
BAUMGARTNER: And we’re here getting together in Nashville on the eve of the 2024 Independent Show. There’s going to be a lot to cover that’s pretty interesting, but it’s great to have you here and get a chance to learn about you and your storied career. So, to start off, you’re at the forefront of cable’s move into, I had to write it all down, digital video, broadband, VOD, phone. And we’re going to get all into those things. But let’s just go back to the beginning of your move into the industry. So, you started out as an installer at Falcon Communications. Is that right? 1975?
MURPHY: Yes. So, born and raised in Los Angeles. In 1975, I had gone to Cal State LA for a few years in engineering. I started driving tow trucks at night. I was a night driver to put myself through school. And it just got very tiresome, so I knew that I didn’t want to be a tow truck driver for the rest of my life. Everybody was like 25 years older than me, and they’ve been doing it forever, right?
BAUMGARTNER: Oh, okay. And you’re like, “That’s not the career path I’m looking for.”
MURPHY: Absolutely. So, I read an ad in the newspaper, and it’s the only job in cable that I ever pursued. And the ad simply said, “Looking for young men that aren’t scared of heights, that are fearless.”
BAUMGARTNER: You’re like me, me, and me?
MURPHY: Me, me, and me. I was driving tow trucks in East LA at the time, so yes, me, me, and me. Repoing cars. So, it turned out they were looking for construction laborers. And I started out on a construction crew, and there was like five of us hired at the same time. And we were all just sort of grounds men and basically helpers. And after about a week, I kept climbing the poles, trying to see what the linemen were doing. And there was one guy who was the lead who just said, “Hey, why are you doing this?” I said, “I just want to learn what you guys are doing.” He said, “Well, if that’s the case, you already know what we’re doing.” He goes, “Why don’t you take the next pole by yourself, and I’ll take the next one. We’ll get this done twice as quick.” So, at the end of about a two-week project, they were looking for installers, and they were looking for techs, and I was promoted to service tech. So, I never really was an installer, and I’m probably the worst installer in the world because of that. [Laughs]
BAUMGARTNER: As you kind of got involved in that, what did the cable industry mean to you at the time?
MURPHY: It was something brand new. I mean, it was something that I really didn’t understand fully, but it was the late 70s. There was lots of construction going on.
BAUMGARTNER: Sounds familiar.
MURPHY: I was very mechanically inclined. Oh, you’ll hear it comes full cycle. I was very mechanically inclined, and I really enjoyed working outside and doing this. I did do service calls. Within probably a year, I was promoted to chief tech. And one of the reasons I jokingly say is you show up with “head colds and hangovers” just to make sure. If you’re not there, if you’re not showing up, you can’t do the work. So, I was always there, I was always reliable, and I think because of that, I was rewarded.
BAUMGARTNER: Now, did you– When did it become evident? Was it right away? Where you’re like, “Hey, this is an industry that I could see myself staying in as a career,” or were you still at the time going, “Well, I’m on the fence here,” or was it clear from the start?
MURPHY: Oh, there was a clear time, but it was probably in ’82 that that happened. And during that time, I had a lot of firsts. We were launching HBO in ’79. We had to build the satellite dishes. Showed up there, and Falcon didn’t have a great deal of money at the time, so they used the in-house labor to do it. Nobody knew how to work a transit or read a compass, except I was in the Boy Scouts, and I made it all the way to Life Scout, and I had my map and compass merit badge. So, I was able to set it up. If we would have set it up where it was, they would have missed Magnetic North by 15 degrees, and at 28,000 feet into space, they would never have hit it.
BAUMGARTNER: That wouldn’t have worked, right?
MURPHY: It wouldn’t have worked. So, that got recognition by everybody, and then we started going on. It was the franchise wars that were happening in the early 80s. What do I mean by that? I mean that there was 40 companies all going around courting different cities, and different municipalities, and counties trying to get the franchises.
BAUMGARTNER: You were coming in brand new. There was nothing there from a cable standpoint.
MURPHY: That’s right. And at the time, we were very successful. We got 13 out of 14 franchises in the San Gabriel Valley. So, my job at the time was sort of a regional chief tech that basically had ensured that the construction folks were giving us a plant that worked and everything was fine and basically tested.
BAUMGARTNER: Interesting. Now, that’s a pretty good success rate. And I used to hear interesting stories about how those deals would come together, but was there one particular thing that was being offered as a franchise that just resonated and always was like the hinge point to get you a deal? I mean, what was the thing that the towns wanted?
MURPHY: Yeah, you have to look at upper management, Marc Nathanson, Frank Intiso. That whole group recruited a whole group of very savvy, politically savvy folks at the time that actually went around and actually made connections with the cities, talked to the cities, told them the benefits. And then, once one or two started falling into it, it made sense to be contiguous with the other systems being built around it, just from an economy standpoint.
BAUMGARTNER: And what was state of the art at the time on the cable plant? Because today, as we sit here, we’re starting to talk about 4.0, and doing a lot of fiber builds, and things like that. What was it in those days?
MURPHY: State of the art was 450Mhz.
BAUMGARTNER: 450 megahertz.
MURPHY: 450 megahertz, 60 channel.
BAUMGARTNER: No upstream?
MURPHY: Well–
BAUMGARTNER: Was there an upstream?
MURPHY: There was really no upstream with that. It wasn’t until 550 came along that you actually had upstream. Now, you did have a– It was 550 that had you upstream.
BAUMGARTNER: What was the biggest challenge back then? Was it the reliability with all the amplifiers? What do you remember from those days that was difficult?
MURPHY: What I remember from those days is, as I started getting into the construction more and more, I noticed that some of the vendors that we were using were loading up on the actives. So, I started redesigning some of the systems on my coffee table at home, and bringing them in, and talking to my boss, which is one of my mentors, Ray Tyndall, and showing him how this could be designed a lot better and cut out some amplifiers. At that time, I started working with Scientific Atlanta, who’s no longer around, and we actually took the design from them and gave it to a design house based on what we found. Did that so much that it basically put me in charge of construction at the time.
BAUMGARTNER: Oh, I see. So, you were like freelancing a little bit to try to figure this out.
MURPHY: Because we had to make sure it worked. It was our job to make sure it worked.
BAUMGARTNER: What were cascades like back in those days? These days we’re talking–
MURPHY: 20 amps.
BAUMGARTNER: So, you’re like N plus 20.
MURPHY: N plus 20.
BAUMGARTNER: Okay. Where are you today? Just to make it a typical reference point?
MURPHY: Depending on which market you’re in, the design is usually N plus 4. I have some that are N plus 0.79, which have high density as far as the number of passing. So, that drives it.
BAUMGARTNER: You mentioned Ray. As you were coming up in the industry, you can go as far as you want to go, but who are some of your biggest influencers, mentors?
MURPHY: So, at the time, Ray Tyndall, who was the chief tech when he hired me, was a system engineer when I was the regional chief tech, was a very good personal friend of mine, and also one who would share his knowledge. Anything that he knew, he’d make sure I knew. Now, that was a benefit to me, and I was like a sponge at the time. I went to night school. I got my FCC first class radio telephone license that enabled me to work on any microwave transmitter in the United States, and I started doing all the microwave work, which was tower work. So, I was the guy that had climbed the towers, and put the dishes up, bring in a crane, and put them in, and Ray would be on the ground telling me what he needed me to do.
BAUMGARTNER: Did you ever have any real scary moments on those poles?
MURPHY: Not so much with Falcon, but later on. One of the questions you asked me earlier, and I’m going to circle back to it now, was did I ever think that this would not be a career? When I got that license, I took the test for Southern Cal Edison as a microwave tech. They basically hired me, said I passed all their tests, and I had the choice to make, do I go and work someplace for a utility for 25 years, 30 years, and retire, or do I continue to see how far this will go? It was a major, major decision that I had to make for my own career at the time. At that same time, Acton Cable came out of nowhere and said, “Hey, we need a chief engineer, and we need a microwave engineer, and you’ve got both.” So, Ray and I had to do some soul searching because he was only a few years older than me, and he wasn’t going anywhere, and that was the only step up for me at the time. He actually encouraged me, which I think was very brave on his part, to go out, strike out into the industry, and do the job that he knew I could do. I always appreciate him for that, and I always talk to him about that still.
BAUMGARTNER: Interesting. Well, I think at that time, too, did you really foresee that Cable would continue to evolve? Like, “Oh, yeah. Down the line, we’re going to be doing VOD and HSD.”
MURPHY: VOD wasn’t even around. This is the early 80s.
BAUMGARTNER: It wasn’t even on the radar?
MURPHY: It wasn’t even on the horizon. High-speed data wasn’t on the horizon. Voice over internet protocol was not on the horizon. None of these things. It was simply building all the areas that weren’t built.
BAUMGARTNER: They weren’t saying, “Hey, Pat, stick around because we have this roadmap.”
MURPHY: Well, I had a couple of guys from there ask me to stick around, but it was sort of– Again, as I started out, I only applied for one position in cable. Every other position has called me up in a career of almost 50 years, 50 years in January. I’ve never been unemployed, and I’ve never sought out another position. They’ve always come to me with these opportunities, which I think is a great record.
BAUMGARTNER: Yeah, I’ll say that’s got to be a fairly rare thing.
MURPHY: It is a rare thing. It’s probably even more rare for anybody to do that going forward.
BAUMGARTNER: Sure. Oh, yeah, definitely.
MURPHY: So, Acton was a neat company because I got to travel all over the United States. And again, I’m in my mid-20s, and I would fly out to places like Salt Lake, or Maryland, or Colorado. I’d rent a car. I’d drive up a mountaintop. I’d fix transmitters, I’d fix, hang dishes. I’d do that. That was the position I had, and I would have probably done that for a lot more years, except they sold the company. I felt like, geez, these guys sold the company on me, and out of nowhere came a friend of mine, Chuck Morris with Warren & Morris, who was a placement firm, called me up and said, “Hey, what about Group W?” And I thought, “Well, Group W is probably the place. A big company that I can go into. They’ll never sell this thing.” A year later, they sold.
BAUMGARTNER: Yeah. You’re like, “Oh, man, I’m back to where I was.”
MURPHY: I was back to where I was. Now, I could have stayed with– I think the area that I was in became Comcast. It was in Southern California. At the time, a manager that I worked with at Falcon, a guy named Frank McNellis, who is also one of my mentors, called me out of the blue and said, “Why would you stay there and not know– It’s the unknown there. Come over to work for Simmons Cable at Long Beach. You and I worked together before.” Simmons was the owner.
BAUMGARTNER: And was Simmons like– Did they have multiple systems or how?
MURPHY: He had multiple systems at the time. He operated in, I think it was, almost 18 states, small systems. They weren’t big.
BAUMGARTNER: But very spread out.
MURPHY: Yeah, about 300,000 customers.
BAUMGARTNER: Which was kind of how it was in those days, right, because you would just get a franchise here, here. They didn’t have clustering and all the M&A that happened–
MURPHY: And Long Beach was the biggest of the systems. So, that was what enticed me to do it. I just had to point the car the other way, out of the driveway, to drive to Long Beach, as opposed to going to the other place.
BAUMGARTNER: And what happened to them? I mean, obviously, they eventually–
MURPHY: So, we built the rest of the city. We built close to 800 miles of plant, and we sold it to a little company called CENCOM. I think there was some– another company came in there first. and then CENCOM actually ended up with it. And I went to work for CENCOM as a technical VP. CENCOM turned into Crown, Crown turned into Charter Private, Charter Private turned into Charter Public.
BAUMGARTNER: Where were you there at Charter when–
MURPHY: All that time.
BAUMGARTNER: Yeah.
MURPHY: All the way from the start–
BAUMGARTNER: So, you went through changing a lot of hands. Yeah.
MURPHY: Well, yes and no because remember, CENCOM was Jerry Kent, Howard Woods, and Barry Babcock. Charter Private was the same group, and Charter Public was the same group for the first three and a half years. So yes, I didn’t go– It was only during the Crown part where it changed hands a little bit and I had some different people I reported to.
BAUMGARTNER: Yeah. Now, is it still anxious moments for you? You know, amid all this change, do you kind of still feel pretty comfortable like, “You know, I’m just going to ride in this thing.”
MURPHY: It wasn’t anxious moments because every time it changed, it seemed to– It was almost like I was taking it on as a five-year career, right? Every one of these was an assignment of three to five years.
BAUMGARTNER: Okay. So, it’s like more runway every time.
MURPHY: I was always moving up in responsibility. At one time, I was the regional VP of engineering, and I was also the general manager of the Inland Empire Systems, which is about 90,000 customers. So–
BAUMGARTNER: How did you like the GM role?
MURPHY: So, I liked it, and every time I get an ad sales exec driving in with a new car, I liked it even better because it meant he had a car payment, he had to keep working, and he had to drive sales.
BAUMGARTNER: Okay.
MURPHY: So, that helped a lot.
BAUMGARTNER: That’s some incentive to continue to kick butt.
MURPHY: Yes. So, I learned the other side of the business, and I really, you know– Not that I wasn’t focused on customers, and service being on, and reliability, but now I got to see the whole side of everything.
BAUMGARTNER: Yeah, because that was like– I don’t know, would you characterize it as like an operational role? I mean–
MURPHY: Yes. Absolutely. Now, at the time, Charter came in. This is when they came back after Crown. And again, I knew the higher-ups in the company from when I worked for them for CENCOM, but that’s where I met Tom Jokerst, and Tom Jokerst was also one of my mentors and probably the best engineer that I’ve ever met in my life. And he basically said, “You know, you could do what you want. You could be like the senior VP of operations, or you can be the top engineering position, but you’re going to have to decide which one you want to do.” So, at that time, I went back to the engineering side and started just focusing on that.
BAUMGARTNER: Interesting. Yeah, because I knew Tom a little bit toward the later part of his career. Do you remember Roger Brown at CED, the editor of CED?
MURPHY: I do.
BAUMGARTNER: I think you’ve probably written some things for CED, but I remember he had a super high regard for Tom, you know, because he was on top of everything. So, yeah, I can totally understand why he is on your list over there.
MURPHY: In ’94, it was Charter, and we’re looking to integrate, it was actually ‘93, we’re looking to integrate nodes into our systems, some of the first fiber nodes, to break down the cascades even more. And we’re going to do this in Pasadena, California. I remember trying to nail him down on something, and I finally just got on an airplane with my maps and flew to where he was, which was at a convention that he was at. Showed up, said, “Okay, we’re going to need some time,” and he actually humored me. We sat with his other engineering staff who went over all the maps. I told him why this design would work better than that design, and actually, he supported me on it. And we ended up being one of the first markets out there to put in fiber nodes.
BAUMGARTNER: Yeah, so you were right there at the transition to HFC [Hybrid Fiber Coax], right?
MURPHY: Absolutely.
BAUMGARTNER: Fiber now. Yeah, shortening the cascades. What were the other big benefits? How did that kind of change the game for the industry?
MURPHY: What I like to say is if you really look at it as a customer’s point of view, and you’re at the end of that cascade, you see every outage along the way. You don’t think that system’s very reliable at all.
BAUMGARTNER: Yeah, you’re kind of hosed when you’re on the end of it.
MURPHY: But if you’re in the first four, or five, or even six amplifiers, it seems fairly reliable. This system doesn’t go off that much. Now, every now and then, you’ll have something that affected us, but it also affected the guys at the end of the line as well. So, that was the benefit to the cable industry to improve service to their customers. That was number one with fiber nodes.
BAUMGARTNER: And what was the– Reliability is a great thing. Was it a hard sell for the people who were keeping tabs on the finances of the company? Was it easy for you to say here’s a business benefit?
MURPHY: I don’t think so because at the same time, we were also upgrading the plant to 550. So, there was a sweeping move to do 550 with a return. And in the return, what we got was the VOD systems because that’s when your VOD systems started showing up. We were Diva [Diva Systems Corporation]. We were the first Diva system on the West Coast.
BAUMGARTNER: Oh, you were a Diva. Okay, wow.
MURPHY: And yes, I had never really seen King of Prussia, but I got to see King of Prussia and meet everybody there. And I remember the first time I went to a joint meeting with Scientific Atlanta, Diva and myself. Diva had one engineer and three lawyers, Scientific Atlanta had one engineer and 20 lawyers, and myself. I remember calling Tom Jokerst up and saying, “This meeting’s a waste of our time. It’s all lawyers.”
BAUMGARTNER: Oh.
MURPHY: They all want to argue over intellectual property, and rights, and everything else.
BAUMGARTNER: Well, it’s also new, right?
MURPHY: It’s all brand new. Fast forward probably a year and a half, you had Concurrent, you had N-Cube, you had all these other companies coming into the industry.
BAUMGARTNER: SeaChange.
MURPHY: And that first server looked like a Volkswagen. I had to put in 40 tons of AC just to keep it cool.
BAUMGARTNER: Just to keep it going. Interesting. Yeah. I remember those days on the return path, because as we talked about earlier, yeah, you were there for a lot of new businesses for the industry, voice, digital, broadband.
MURPHY: So, the one that really is going to stick, I mean, video went from analog to digital. Every time we did that, we had to change out everybody’s set-tops to make this work. And at the time–
BAUMGARTNER: A little disruptive, right?
MURPHY: Yeah. At the time, I have 300,000 customers in LA that you’ve got to go out and do this on, right? And now, we’re doing the same thing, except we’re doing it to free up QAMs so that we have space that we can take and use for DOCSIS [Data Over Cable Service Interface Specifications] so we have faster speeds. But really, it’s high-speed data that’s kind of fueled us. Because in ’94, I met a guy named Sky Dayton. And Sky was the founder of EarthLink, an ISP out of Pasadena. And we had this idea that if you took a blistering fast pace of 256 kilobits and paired it with a great ISP like EarthLink, we could have a service.
BAUMGARTNER: Because EarthLink was a brand, people knew it.
MURPHY: And we found ourselves flying back to St. Louis and talking to the senior management about it. And they embraced it, and they said, “We should try this. We should see what happens.” We were Com21 modems. It was a proprietary modem. And what I remember about it is every time we got to 500 customers, the servers would crash, and they’d have to write new code and everything else.
BAUMGARTNER: Oh, really? So, you had to kind of manage the ways of growing.
MURPHY: And we didn’t have a DOCSIS at the time. This was just prior to DOCSIS. Now, the SCTE was working on standards, but it hadn’t quite come out yet. And then, Motorola came out with its Surfboard. This Surfboard was 500 kilobits down by 128 up.
BAUMGARTNER: It was screaming at the time.
MURPHY: But you had to change out all of your devices. And by that time, I probably had 4,000 customers on modem service that were proprietary. So, we had to forklift that out and put in something that was standard that would be, I guess, buildable in the future that we could add on to, that would evolve into something else.
BAUMGARTNER: Yeah. So, the Surfboard, so that was kind of the entry into DOCSIS for you then?
MURPHY: Yes.
BAUMGARTNER: OK. All right. Now, did it feel at the time, even though the industry had been around for a long time, but all these new businesses that it was getting into, did it have a startup feel to it at all or not?
MURPHY: Everything had a startup feel to it. I remember hearing that. The first 20 years, we were basically a community television antenna. That’s what we were. It wasn’t until the late ‘70s that you started seeing satellite programs launch. MTV, CNN, all these other ones started coming up. Almost a new one every month, it seemed like, that we were launching. Every time we went into VOD, VOD seemed like a new business, a new startup. You get into high-speed data, seemed like a new startup. You get into digital video, that almost seemed like a new startup. So, it was something that just kept me very excited as I worked through all these different challenges, different benefits for our customers, those things.
BAUMGARTNER: Were you able to juggle all those balls at once? Because it felt like some operators, they’d be like, “All right, we’re just going to focus on phone, and then VOD, or broadband,” or whatever the order would be. Were you able to do everything across those services? Did you have enough resources to do that, or was it like, “Hey, we need to zero in on this first before we can move on?”
MURPHY: Well, I think I was very fortunate at the time to have the support of Charter Corporate, and the Charter Corporate people were very good to give us the resources we needed. If we could make a good argument on why it made good financial sense and it was going to grow in the future as a potential new business for them, they were very supportive. So, I always pretty much got what I needed. In fact, some of the other regions were kind of pissed that I’d always get it because LA always was sort of the apple of everybody’s eye.
BAUMGARTNER: Yeah. Did you get a chance to experiment and be front of the line on a lot of things?
MURPHY: Almost on all those things.
BAUMGARTNER: Yeah, okay.
MURPHY: I mean, nobody got to do the EarthLink and the proprietary modems until after we had already embraced Surfboards.
BAUMGARTNER: Okay. Interesting. And as you look at all that, there was a lot going on, but what was the biggest challenge you had to solve that you recall on any of those innovations?
MURPHY: The biggest challenge I had to solve was we also had to upgrade 30,000 miles of system in LA when we retrofitted everything for fiber-deeper, shorter cascades. Because again, when you first did this, you were breaking up cascades to maybe 10, cutting your cascades down. But as you progressed, that fiber was pushed deeper into the network, and all that was because of cumulative leakage, and ingress, and everything else was coming back from those customers.
BAUMGARTNER: All right. And I want to move ahead a little bit on your career. So, you were later with Patriot Media, acquired by Comcast.
MURPHY: So, at the time, I was with Charter in LA, and we were going– The whole industry had the tech crash from 2002, 2003, and it was a tough time for the whole industry. And out of the blue, Steve Simmons called me up and said, “Hey, I’m looking to build an MSO, and I want you to be our CTO.” So, again, born and raised in LA, moved the family when my son was in high school, my daughter was in middle school, to New Jersey, beautiful New Jersey.
BAUMGARTNER: Big move. Yeah.
MURPHY: Big move. Never looked back. We bought a system from RCN. The system had 31 communities in it. It didn’t fit their model. Their model was the NFL cities. They wanted to do New York. They wanted to do Chicago. They wanted to do those type. So, we took these, and they were all 450 systems one-way.
BAUMGARTNER: Okay, so you had some work to do.
MURPHY: And then, we found out that out of the top 10 counties, as far as income per household, we had three of them in the top five.
BAUMGARTNER: Oh, really? Despite–
MURPHY: Yes.
BAUMGARTNER: –the situation?
MURPHY: And after we rebuilt it, we had close to, I don’t know, 65, 70% penetration. People getting rid of their dishes, getting rid of everything to come over to our service because we were offering them– We had VOD, we had phone, we had high-speed data. We were giving pretty much everything that somebody would want as a customer that had the means to do. We were surrounded by Comcast. We could not grow.
BAUMGARTNER: Okay, so you were like a hole in the doughnut?
MURPHY: We were the hole in the doughnut. So, Comcast came in and purchased us at the time. It was a deal that, according to some people, they said it was one of the higher ones paid per sub.
BAUMGARTNER: Do you remember the number?
MURPHY: Well, I do, but I’m not going to mention it here. [Laughter]
BAUMGARTNER: Just curious. You know, while I have you here, okay.
MURPHY: But Comcast was– The people who came over were really, really good to work with and did the due diligence. We struck up a relationship, and out of– There were seven of us who worked for Patriot Media. They were actually the founders, if you will. And that group, five of us, were offered positions with Comcast. Spectrum of Boston, who was an investment private equity company out of Boston, said, “Hey, we made some money. Why don’t we keep you guys together for a year, and we’ll try to do this again?” So, the five of us– The other two was Steve Simmons and our chief financial officer who lived in upstate New York. So, none of them were in our office on a regular basis. So, we went ahead and started meeting in my basement, which I had the only finished basement.
BAUMGARTNER: Okay, so you got that assignment.
MURPHY: So, that was our assignment, and our assignment was to find a system we could buy. And within probably about two months, we found a system that was in distress in Puerto Rico, Choice Cable. So, lo and behold, within two months, we’re running Choice Cable, and it had roughly 100,000 customers.
BAUMGARTNER: That’s pretty big.
MURPHY: And we were the whole south side of the island and the whole west side of the island. And we continued to look for systems. Three years later, we found the system for RCN where they’d come out of bankruptcy. And with Abry, another private equity company out of Boston, we actually purchased them. And that was August of 2010 that we actually took over all the RCN systems. We ended up selling Choice Cable to Liberty because they had the rest of the island. And Liberty bought that, I think, in 2012.
BAUMGARTNER: Interesting. In these days, you know, Astound is where we’re at, Astound Broadband. We talked about RCN, Grande Wave, others that you talked about. And then, you also picked up some of what used to be Wide Open West. Some systems. So, I guess as we kind of fast forward to where we are now, what’s the big focus right now?
MURPHY: So, the big focus right now is obviously, when you’ve got all those different MSOs and you’re kind of pushing them together, standardization for me is one of my big, big projects. Trying to get things done consistently across the board. Now, easier said than done sometimes because the type of equipment being used, types of design, different cultures. I’ve been very fortunate to have some really good people. And I’ve got people that are working for me out of all three of those major acquisitions. And they actually report to me, but they are in the states that they came from. So, I’ve got somebody in Texas. I’ve got somebody in Washington. I’ve got somebody in Wilkes-Barre, Pennsylvania. I’ve got somebody down in DC. So, my staff is everywhere.
BAUMGARTNER: Now, as far as being able to unify as much as you can and consolidate or making the operations as seamless across as you can, are you essentially done at this point, or is it like a never-ending job?
MURPHY: I don’t think you’re ever done, because again, we get various acquisitions coming across our desk looking at different projects. How does this fit? We’ll go into our war room, our conference room, and talk about does this make sense? Doesn’t it make sense? So, the company is not resting on its laurels. We’re owned right now by Stonepeak, which is an infrastructure fund, and they’ve got visions of growing this, either through our own building– We’re doing edge-out construction. We do a couple hundred thousand units a year. We’ve been doing a hundred thousand. Now, we’re going to jump it up. And this is usually areas that are adjacent to us. Now, with the BEAD [Broadband Equity, Access, and Deployment Program] funding, who knows what that will get? We’re going after everything we can.
BAUMGARTNER: Are you going to participate?
MURPHY: We are going to participate.
BAUMGARTNER: Yeah. That’s going to be– As we sit here in 2024, we’re trying to figure out how that’s going to evolve.
MURPHY: Everybody’s trying to figure out–
BAUMGARTNER: And every state is a little bit different in how they’re doing it. So, I mean, that’s going to be a little bit of a challenge trying to figure out where the fit is.
MURPHY: Yeah.
BAUMGARTNER: And then, staying on broadband, because I’ve been following, like, all right, what’s another growth engine for this industry? And I think mobile is one that is starting to weave itself in there, but you’re in there with mobile.
MURPHY: Yes.
BAUMGARTNER: So, how does that one come together and how important do you think it is for an operator to have that in their repertoire?
MURPHY: I think it’s important, especially for a midsize operator. Everybody had a little bit of a gain during COVID itself, during 2020, right? 2021, we still had great years. 2022, 2023, everybody’s sort of had the COVID hangover. They started losing to fixed wireless and they started losing to these guys, right? Meanwhile, we’re all in the speed race of trying to see who has multi-gig and who can do the fastest. In some areas, we’re losing customers to companies that have 140 megahertz (FWA), right?
BAUMGARTNER: Oh, because of that’s how much spectrum they have.
MURPHY: That’s what they got. But still, you know, I like to say that when you look at our customers, half the customers know their speeds, and they do speed tests, and they’re very educated on it. The other half just want things to work in their house and they really don’t know. I like to refer to Joe subscriber as my son’s father-in-law, sells insurance. I go to his house. I say, “Scott, how fast is this running?” I do my speed tests and I said, “Oh, you got a blistering 30 megs.” So, what are you paying for it? What are you paying for? He goes, “Is that good? Is that bad?” He doesn’t know. He goes, “As long as my camera, my Ring camera works and I can do emails in the house, I’m fine.”
BAUMGARTNER: Well, it’s an interesting dynamic for the industry, right? Like you said, you’re kind of having to compete on the billboard speed and then, yeah, fixed wireless is having a moment, but, you know, a lot of that is about a price point and, you know, maybe 300 megabits per second, and it’s enough for a lot of consumers.
MURPHY: A lot of consumers are fine with it.
BAUMGARTNER: So, that puts a challenge on it. Yeah, it’s like you need to try to segment the market.
MURPHY: You’ve got to have different campaigns for different parts of the market. So, one of the things we’ve seen is that I know with me, I’ve had the same carrier forever, and I probably will for my cell phone. But what we’ve seen is the younger, you know, 20-somethings, will switch that tomorrow.
BAUMGARTNER: Oh, this is like in a heartbeat? Yeah.
MURPHY: Like in a heartbeat.
BAUMGARTNER: Yeah, because I’m kind of lazy. I mean, personally, I’m like, “Yeah, I’m pretty comfortable.”
MURPHY: Yes. And so am I. And so are a lot of folks. But the reason why we jumped into cellular is because we’ve seen that we started losing a large portion of that market. So, we measure everything as a company. And we started seeing that that was a portion of the market that we weren’t getting what we call our fair share, if you will.
BAUMGARTNER: I see. So, do you view it as a retention?
MURPHY: As a have to. You have to be in that business if you’re going to continue to grow or at least stay at the same level you’re at because you’re going to continue to lose some portion of the market because it’s not in disconnects. It’s they’re just not coming on. They’re not coming on to your system.
BAUMGARTNER: I see. OK, so it’s an acquisition story.
MURPHY: Yes.
BAUMGARTNER: OK. I think that’s interesting because I think originally, there was a lot of thought about attaching mobile to broadband, that that would help with churn. Maybe it does, but you’re saying, hey, it’s acquisition.
MURPHY: It’s more of an acquisition from what I’ve seen.
BAUMGARTNER: OK. Any other learnings? It hasn’t been that long, really, since you had the market.
MURPHY: It hasn’t been that long. It’s I mean, literally, we just launched last year, but it seems to have slowed the pace and actually brought in more of that market.
BAUMGARTNER: OK. All right. Now, how about you personally? Are you in a market that has that? I’m sure you’re in an Astound market where you can get mobile from your own company?
MURPHY: I got Verizon.
BAUMGARTNER: OK.
MURPHY: But if I was in an Astound market, I’d get it tomorrow.
BAUMGARTNER: All right. I do want to talk a little bit about wireline. We’re talking about the high end, you know, the broadband into the home and covered DOCSIS. And I think the specification has done a great job of evolving over the years to stay ahead of demand and where that’s going with DOCSIS, and 3.1, and this 3.1+ thing that’s going around now, and 4.0 on the table. Now, how do you see DOCSIS fitting into the future of your company on the HFC side, and related to that, how fiber and PON [Passive optical networking] fits in?
MURPHY: So, you’ve got various markets. I mean, majority of our markets are HFC. We have been building fiber to the home for the last probably four years, five years. We’ve got about five hundred thousand passings by the end of this year that will be fiber to the home. But we passed four point five million. So, that tells you that the majority is still HFC.
BAUMGARTNER: Now, is most of the fiber new build?
MURPHY: Pretty much.
BAUMGARTNER: OK.
MURPHY: There is some areas under Grande that we picked up that had fiber to the home, and then it was actually fiber to an ONU [Optical Network Unit] ,and then it was it was passive coax to the home. We’ve changed that out to fiber to the home. So, that’s pretty much done. But most of it is brand new. It’s all of our new build, or edge out that we’re doing. And we’re like everybody else. We’re looking at 3.1 expanded, and we’re looking at 4.0, and we’re looking at do we do a 1.2 gigahertz drop in? Do we do a 1.8 gigahertz rebuild? Do we do a fiber overbuild of ourselves? And I think that you really got– It’s a team of folks looking at each one of these areas to make the recommendations based on what makes most sense in those areas. Some areas, you’re going to have competitors trying to overbuild you. If you got the competitors overbuilding you, you may want to do a 3.1 expanded because it’s quicker and get your speeds up for 5 to 5×1.5 maybe a gig so that would fend off any competition from coming in the area. Other areas that you may be the only operator in town, it may make sense to overbuild yourself with fiber. Get all those benefits that you get from not having power supplies, not having the maintenance.
BAUMGARTNER: All the operational–
MURPHY: All the operation issues that go with it. But again it’s going to really be by area by area. And I don’t– I have talked to some of my counterparts, and they’re basically in the same boat. It’s one size doesn’t fit all, unfortunately.
BAUMGARTNER: Yeah. I was going to say, it’s like it all depends on a lot of variables on almost a market by market basis and kind of the condition of the plant, the level of competition. Yeah. It’s not as easy of a decision as it used to be where you just go, “OK, we’re going to do 1.1 DOCSIS into 2 and just kind of going along the progression.” A little more complicated.
MURPHY: You know, we look at– I think you had somewhere that we’ve upgraded our systems to 3.1 back in ’16. I know the 10 K’s which was the predecessor to the to the cBR-8s [converged broadband router] lasted almost 17 years. It looks like we might not even get a 10 year run out of the cBR-8s before we’re forklifting those out and going to something else.
BAUMGARTNER: Yeah. You know that something else is going to be? Are you looking at like DAA [Distributed Access Architecture] and virtual CMTS [cable modem termination system]?
MURPHY: DAA, it might be a virtual CMTS. It really is going to depend on which market you’re talking about. I think the more operators I talk to are saying with what’s happening with 3.1 expanded, especially with the modem manufacturers being able to push a faster speed to those, that you’re probably going to see a lot of people saying, “Hey, I’m either going to do the 3.1 or I’m going to do a fiber over building myself and maybe bypassing the 4.0.” Not everybody, but just because this one’s quicker to do the 3.1 expanded. This one’s like everything moves, and everything gets changed, and it’s looks like a rebuild. And then, the fiber one looks like a rebuild too, but basically, do you take that step to go 4.0 or do you go all the way to the fiber to the home? The fiber to the home networks, I mean we changed out all of our GPON [Gigabit Passive Optical Network] to XGS [10 Gigabit Symmetrical PON]. So, that’s a 10 gig platform, but we’re also talking about okay add another wavelength. Is it 25 gigs? Is it 50 gigs? Dare I say a 100 gigs?
BAUMGARTNER: Yeah, some people are daring. They are ready, yeah.
MURPHY: But that’s some of the stuff we’ll see at the show is could you overlay through an add drop multiplexer somewhere and offer a higher speed to that those areas we always got fiber there. The fiber doesn’t care. It’s actually the connections from the OLT [optical line terminal] to the device at the house.
BAUMGARTNER: Well, I think that also speaks to the whole the “cable” industry has become more agnostic from the access network, right? You’ve got HFC, you got fiber, you know, some are doing fixed wireless to reach certain markets. And because of that, we’re kind of at an inflection point, or a crossroads, or pick your word, but as you look at the industry maybe ten years from now, if you had to look into a crystal ball, what do you think will be different about the industry? Will it still be the same kind of collegial industry it’s been? Will that persist or, you know. with consolidation, and more competition, and some operators encroaching into other operators’ territories, that can be a little cause for consternation, but yeah, where do you think we’re going to be ten years from now?
MURPHY: I think obviously, we’re not in– television is not fueling anybody’s MSO these days. The loss of video customers continue. Although, I’m not sure video customers are happy now with 20 different types of streaming, and splitting up content, and putting the NFL on five or six different streaming apps. That’s going to continue. We’re going to– I mean, it used to be 70, 80% of our customers were video customers. Now, it’s the other way around. We have 70, 80%, 90% are high-speed data customers. So, that’s going to continue, except at faster speeds. You’re going to see a lot more investment in fiber networks. Doesn’t mean that all the HFC will be gone. I was reading a report that said it could take close to 50 years to kind of flush out all those networks at some point, but I think in the next 10 years, you’re definitely going to have a large mix. It might be 35, 40% of the networks will all be fiber-based with speeds of anywhere from 10 to probably 50 gig at the houses. And again, I don’t know how fast you need because–
BAUMGARTNER: Yeah, are we going to be streaming 8k video by then? Who knows, right?
MURPHY: Yes, absolutely. So, that will continue. I think that when you ask what other businesses are we in, we’re doing a lot of high-speed networks for various companies, going to data rings. Data rings, especially the big FANGs with the AI projects they got out there, and laying out these networks for them, and maintaining these networks for them. So, it’s a piece of the business that’s about 25% of revenue right now, which is commercial customers. Not just the FANGs, but other customers too. I mean, we do a large business in cellular backhaul for basically everybody you could even think of. So, we’re going to continue that. You’ll see other companies also continuing that. That’s really where the future is going on these networks.
BAUMGARTNER: What do you think about like the future video for Astound, where you are now? Because we’ve seen strategies differ, right? Some are getting out of the business, some are just going to kind of let it gradually erode and seed more of it over to the direct-to-consumer sort of things.
MURPHY: Yeah, the streamers. So, we have our own IPTV product that we basically, a few years back, got together with TiVo for the UI, Vecima for the back office, and Google for an Android base to offer this. And we have roughly over a hundred thousand of our two hundred and twenty thousand video customers left on that. So, that’s our high-end product, but we’re also offering deals to buy other services where– Bring your own video, right? We don’t care. I don’t know how much longer people– I think you may see people coming back to the all-in-one as long as the programmers don’t take everything off of those.
BAUMGARTNER: Yeah, they’ve kind of strip-mined quite a bit of the programming, yeah.
MURPHY: Your words, not mine.
BAUMGARTNER: Yeah. That’ll be me saying that. Okay, well, we have a couple more minutes. Kind of outside of specific to your career, but you know, as cable evolves and becomes the industry that it’s going to be, what kind of wisdom would you impart to somebody who’s interested in in becoming part of it?
MURPHY: I think all too often, I see people coming in that want to start at the top, and you got to start somewhere.
BAUMGARTNER: I see. Kind of entitlement.
MURPHY: I don’t know if I’d call it entitlement, but maybe they feel that they should be at a much higher level than a starting position. And again, you got to start somewhere. I mean, we’ve had installers walk off the job when they figured out they have to carry a 28 foot ladder that weighs 75 pounds the first time.
BAUMGARTNER: Oh, I see.
MURPHY: I mean, it’s not quite what they wanted. They wanted to be in a room, coding and doing something. But the reality is, if you do start in this industry, make sure that you are participating in your own success. What do I mean by that? You’re learning everything you can about the industry. You’re going and taking classes, if it’s specialized classes like basic electronics, or computer programming, or whatever it is that’s going to help you to move on. That’s really the recommendation I would give anybody coming into the industry. And, you know, people don’t like when I say this, but you work harder than your co-workers. I’ve always found that if I just show up and work harder than everybody else that’s in that office that day, it seems to be a benefit to me, and it’s rewarded me time and time again.
BAUMGARTNER: Well, like you said, opportunities have come to you, for the most part, outside of your first job, the way you got into the industry. Interesting. And then lastly, what about your personal legacy? How important is that to you or how do you see that?
MURPHY: So, I see my legacy– I’ve thought about that one a lot. I think my legacy is basically instilled in the people that I’ve mentored and I’ve worked with over the years. I like to think of myself that I clearly can communicate what our plans are, what we want to do, where we’re going. I also see a hard-fixed asset as a legacy. All the miles of plant I built. I mean, I’m driving my wife nuts when we’re driving through various communities like Tahoe or Reno and said “Yeah, I was the one that oversaw most of the stuff being built up here, or I oversaw the building of this stuff in in the San Gabriel Valley, the Inland Empire, or wherever, right.” I’ve also have had the pleasure of remodeling and building probably close to 200 headends and hub sites over the years and modernizing them with everything you need, backup power, UPS’s, HVAC systems, everything else. As well as all the fiber networks that I’ve been building and will continue to build for the next few years. So, that’s really what my legacy is, in those two different areas, the people and the assets.
BAUMGARTNER: Right, like an actual tangible thing that’s in the ground that’s going to be there for quite a long time. All right. Well thanks, Pat. I think that’s where we’re going to leave it. Thanks again for all your insight, and getting a chance to learn a lot about your career path, and your thoughts about the industry.
MURPHY: And Jeff, thank you. It’s been a pleasure that the Cable Center even offered to let me do this, and I really appreciate it.
BAUMGARTNER: All right. Thanks, Pat.
