It’s been a terrific ride for Comcast’s Ralph Roberts, who started with a single cable system in Elvis’ hometown of Tupelo, Miss., and now is the patriarch of the largest provider of cable video and broadband services in the U.S. At 86, he’s stepping back from daily corporate life, if only a bit, as his co-founder, the not-quite-retiring Julian Brodsky, leaves the stage (co-founder Dan Aaron passed away in 2003). We asked Paul Maxwell—who’s been in cable almost as long as Ralph—to get Mr. Roberts’ take on cable’s next big opportunity, the telcos, regulation, customer service, corporate culture and neckwear, among other things. Below is a complete transcript of the conversation Ralph Roberts had with Paul Maxwell in the Philadelphia office of Mr. Roberts earlier this year. [An edited version of this conversation appears in the print edition of CableWorld.] Paul Maxwell: Ralph, as I as was on my way here I ran into Brad Fox, Jeff Shell and a couple of your other guys the other night at the Cable Positive dinner. One of them mentioned to me that you have a collection of bow ties approaching 100 or so now. Ralph Roberts: There could well be. I never counted them, but there are lots of them. PM: I was thinking it would be nice to bring you one, so I went looking for a Vietnam Veterans thing, cause I’m one of those. I couldn’t find one, but I found a neat tie from Oxford University’s Balliol College. This is their tie. John Balliol founded Balliol College back in the 1200s; he fought with (and against) Robert the Bruce and he was from near Dumfries in Scotland, where Caerlaverock Castle is … the Maxwell family seat. If you go to Sweetheart Abbey every tombstone is ether a Maxwell or a Balliol. So I thought that would be a nice small gesture for you taking the time to talk with us. RR: That’s very nice, Paul. It’s very attractive. PM: It’s a nice stripe, I thought. RR: I agree with you. Your taste is excellent in addition to the school’s colors. Thank you very much… You didn’t take the price tag off, though. PM: I didn’t. I didn’t think of it [laughs] … But I thought that would be a fun thing to bring for you because I know you like your bow ties. RR: Yes I do, I sort of got into wearing them. And I have well over 100 four-in-hand ties, if you’d like to have some … PM: [big laugh] No, I think that I have plenty, actually. I don’t wear them very often, you know. RR: You’re kind of a casual type fellow. PM: A very casual type fellow, that’s true. One of the great myths about you getting into the business of course was the Sansabelt story about selling to the Hickock Company to get rid of your belts and your suspenders and so on because people weren’t going to wear them anymore. I always was amused by that because where I grew up, and where I lived in South Texas outside of Fort Worth, my granddad had a ranch so we always had great big belt buckles, big belts, you know, on our jeans. RR: That was part of the trademark. PM: Part of the trademark, and the greatest thrill was to survive a rodeo event and actually get a buckle for doing something. So you probably never would’ve gotten into the cable business if you’d been in Texas? RR: Probably not [chuckle]. PM: But as I read through the oral history you did with my friend Tom Southwick – he was my editor at Multichannel News and then he founded CableWorld, I noticed that Comcast changed its name in 1969 from what was it? IEC was your name? RR: International Equity Corporation. PM: Right, which you got into as a venture capitalist, really, an early manifestation of that. RR: That’s exactly right. The company was called Equity Corp. And when we went to apply for a trademark we found out there is an Equity Corp. already running, only it’s a giant corporation and now comes a little pipsqueak like we were. So actually to dress it up a little I called it International Equity Corp., and that’s what the name was. PM: But you got really into the cable business because Dan Aaron convinced you it was a good investment. RR: Dan Aaron was a broker and he was trying to look like Mr. Daniels… PM: A worthwhile goal… RR: He worked for Jerrold and before that he was a reporter for The Philadelphia Bulletin. PM: He was a sportswriter, wasn’t he? RR: I don’t know whether he was a sportswriter, when he went in to interview Milt Shapp (Jerrold’s founder and later governor of Pennsylvania), Milt talked him into going to work for the cable company, which he did. And after he was there some years taking care of Jerrold’s cable operations – he had cable systems – he then decided to be a cable broker, and the first system he had to sell was Tupelo, Mississippi. It was owned by Pete Musser. And the story goes the two of them saw me walking down the street one day and they had trouble trying to sell a system in Mississippi – it wasn’t exactly the world’s most popular place at that time. PM: No. Did you ever go to Tupelo? It’s Elvis’ hometown … [chuckle] RR: Oh, many times. Tupelo’s a nice little place… And anyway, I bought it. I did a little investigation and decided that would be one of my investments. PM: And other ventures about the same time, including Muzak. RR: Yeah, I used to work as vice president of Muzak. PM: Well, Bill Bresnan was involved with Muzak for a while, wasn’t he, with Jack Kent Cooke, right? RR: Yes, Jack Kent Cooke bought it and it was sold a couple times and after that I was their marketing vice president and from there I went to Pioneer Belt Company, Pioneer Belts and Suspenders. PM: You also made early investments in cellular. Do you regret selling that along the way? RR: Well if we’d held it, it would be worth more today than it was when we sold it. PM: True, but… RR: But we could see that it was a localized thing with 7 million subscribers, 7 million population, and they had roaming charges and you had to buy it from someone who had those rights in the United States. So it just didn’t look like it would be worth it unless you were going to go whole hog for it. PM: That’s a good point actually, because that’s what’s happened of course, the bigger ones have gone whole hog. RR: Yeah. You had to do that or get out. And we decided to put the money in the cable business. PM: And you think that was a good choice? RR: It so happened it worked out very nicely. PM: That’s an interesting thing… In reading, too, the oral history you commented that one of the things you liked about the cable business was the subscription aspect, and I was amused by that because when I last started a company I almost called it the “RR – Bar – M” you know, like a cattle “brand,” and the idea was recurring revenue media. RR: Is that so? PM: That’s exactly it and it seems the philosophy you approached this with … RR: Well, it was a heavy capital investment that would keep others from just jumping in … make them think twice before going in. And it had recurring income, which is exactly what Muzak was. You put an installation in a building and you had recurring income for the music. PM: And you had a barrier to entry because somebody else would have had to put the capital in to make it happen. The Internet seems to be changing that about a lot of kinds of media but as you’ve grown the cable company, and another thing that struck me that Tom asked you about selling – why didn’t you sell out? And your answer was it’s kind of nice to have a business to do instead of just have some money to play with. It gives you stimulation. And as you grew this did it seem like you were the tortoise and the other guys were the hare, and that you wound up winning the race. RR: Not really. I think a lot has to do with good luck. And I think if you have a long-range objective and you sort of stick with it through thick and thin – if you happen to have been right in the first place – you come out ahead. PM: You also mention you were very opportunistic in the approach to the business. When opportunity came, it was fun to take the risk. RR: I sort of enjoyed that part of the business. It’s sort of a crapshoot whether it’s going to be successful or not. And if you’re an optimist you’re going to look to the success side. And if you push hard enough, it’ll come out OK. PM: You did it with QVC. You did it with E!. Why did it take so long to do other programming ventures like you’re off on now? RR: Well, I think we were under the belief, and still are, that distribution is critical to success and the first thing to do in our minds was get the distribution. Then of course you want programming to put over it. And so the next step in the big picture is for us to get into the programming business, which is what we’re doing. PM: What you’re doing now, in a much bigger way. RR: In a much bigger way. And you’re almost assured of success because we have the capability of putting it through a lot of outlets that you already know what to do with it. PM: So it’s sort of the anti-Redstone. He’s called the content king, and your view was that the conduit, or the distribution, was the king first. RR: Yes, I thought if you had the railroad tracks first you’d find the trains to put on them. PM: It’s interesting, too, actually the trains then later became the foot bed for the fiber-optic distribution. The Williams companies and then the Rio Grande (the underpinning of Qwest) and others have done just that, have found other ways to use that distribution. RR: Yes. Once it’s there it turns out a lot of product can be put on the table. PM: The biggest question on the table in Washington today is the so-called network neutrality and the a la carte “solution” to indecency. Though as a cable company you’re selling two different things. You’re selling content from the video side and you’re selling connectivity and access on the broadband side. And you’re rolling out pretty fast now voice over IP. How do we in a political sense bring all those things together and keep them from telling us what to do? RR: Well I think you have to understand each one is a separate business. You find ways of blending them so that even though they’re separate they’re also related. And in our case the common denominator is the cable. PM: It’s the conduit again. RR: There it is. And it goes both ways. Once we woke up to the fact that it would go both ways and could do it by changing electronic equipment, it opened up the doors to all kinds of exciting businesses, which is what’s happening right now. PM: So how do we keep the government out of regulating how we go about selling these different things? RR: Well the government, fortunately, from the ’96 Act, has sort of left the cable companies alone. PM: It has for a while, but that seems to be changing. RR: Now it’s changing, and I think it’s changing primarily because the telephone companies would love to be in the cable business and they have tremendous power in Washington and other places, and it looks as though they’re going to be in. PM: They’ll be in it. In Keller, Texas, they’re proving that they are serious. RR: Oh, they’re serious all right. And I think this new merger gives them tremendous capital. PM: That’s a $165 billion market cap on the combined BellSouth/AT&T. RR: It’s going to be one of the largest businesses in the world. PM: Their combined revenue is a little over $120 billion or so. RR: I think that’s right. PM: Their combined revenue [about $120 billion] dwarfs our business. How do we turn the tables on them? RR: I think the cable people have to join forces somewhere. PM: Can we do that anymore? As the landscape has changed and as you move into programming that you’re going to sell to the telephone companies as well, and that you already sell to the satellite companies … how does cable find its place in that mix, when it’s sort of cooperating on the one hand and competing on the other? RR: The bottom line is they’ll have to find a way. The common denominator is the customer, the subscriber. And if we can give the best service and give good products and even better products, then I think we’re going to be OK. Again, I’m optimistic about the fact that necessity requires change, and we change. You change to meet whatever the problems are. Before people have told us the cable business was going to go under the ocean. PM: Yeah, we have heard that before, that’s true. RR: You can get an ulcer every 10 years if you’re so inclined. But it doesn’t happen. So I think if we service the customer properly all the different kinds of products we develop, we’ll find a way to sell them. And to make money on them. So I’m not too disturbed about the telephone companies, particularly because we’re going into the telephone business and we’re having tremendous success with it. PM: From the start, I’ve been told. RR: I mean you talk about millions of homes buying telephone [service] from cable people. And so if I was a telephone company, I’d be a little worried, too. PM: I actually believe their adventure into video programming is more defensive than offensive. RR: Oh, you’re right. PM: So they, though, have to do what cable’s already done. They have to shift out their electronics in effect. As Verizon builds fiber to the home, what happens to their copper plant? And what happens when they write that off? RR: The cost of building millions of miles, hundreds of thousands of miles today is much more expensive than when we built them. So they’re going in with a big lump of cost investment and we were able to get in back of it. So I don’t think it’s going to be so easy, but listen, there isn’t a good business in the United States that doesn’t have a competitor. PM: That is very, very true. You almost have to have a competitor to have a good business. RR: I think that’s right. PM: I have always believed that myself. RR: So I think we’re following the story the way it should go. Now the government, if it passes the bills that are being discussed now … we’re anxious to say there should be a level playing field for the telephone company and the cable company. And of course the telephone company would like to have a little edge. As a matter of fact they’d like to have a big edge. And so they’re bypassing the cities and they want to have a universal franchise and we think that’s maybe going a little too far. But even if that happens, with a local company, cable is a local business. We have people locally working in cable with the city. And to make the city become just a throughput and bypass the local people, is different than we would do it. Maybe they’re right, but so far we’ve done well working with the local community. PM: You make a good point about the opportunity for the business to get even more locally active. RR: Absolutely. The more we see what they do, by nature improve yourself. Because we’re competing, and we have a different mentality, I think, in cable today compared with 25 years ago. PM: Oh, that’s very clear… RR: Marketing has become a big, important job. PM: That’s back where you started. RR: That was the business I always was in. I worked for an advertising agency and I consider myself a salesman. PM: From that marketing background, though, cable’s not done the world’s best job over its history of naming things and marketing then. We keep naming things after the wire or we name it after the function, like “pay per view” and things like that. It’d be a great help if you’d start thinking of ways to rename all this stuff because we’ve done a bad job of that. RR: Actually, there should be some relationship between a name and what you’re doing. PM: OK. RR: And the trick is to find a way… as a matter of fact that’s how we named Comcast. PM: It’s communications and broadcast, right? RR: That’s right. That was a long time ago but we could see what the future looked like and it was leading in that direction. So I think people should name ideas and keep them catchy. Take video on demand. That’s a long name for something, but it tells the story. So I think that helps. It’s these letters – K14567 218 – I get confused trying to remember what they all mean. Everybody speaks in the alphabet. PM: In acronyms. Well, I named the fax about cable CableFAX. RR: It sounds like what it is. PM: That’s what it is and what it does. In your experience in this business, though, you’ve met a lot of pretty big characters. Our business has been full of them, it seems to me. Among them, who do you think contributed the most in making this business a big business? RR: I think John Malone. I think he really was the guy who led the pack. A very bright man and came up through Jerrold in a sense. His education is excellent and I think he had the right idea and he was encouraging, and he went forward. So I’d put him down as No. 1, I think. And Bill Daniels was an important man because he gave people courage. He sold them properties, told them they could do better and make the product work. So I think Daniels is an unsung hero. PM: He was an important mentor to me. RR: He was? PM: Yes, Bill was. Very, very much so. And I really admire what he did and how he behaved in business. How about some others? RR: Well… PM: You have to think of Ted. RR: Ted Turner … He had the right idea about CNN. PM: He did. Even before that when he started with WTCG. RR: Well, there’s a guy who inherited a poster business, billboards. Unfortunately his father committed suicide, and he picked up and made a real go of it. Of course his bringing cable to all of the Southeastern part of the United States was tremendous. Whether in Tupelo, Mississippi, or Meridian, in a small town to be able to get a station from Atlanta would be big time. And he put it on the satellite and that was big time. And the interesting part about that is, I don’t believe there was any network that objected to his going up and becoming another network. PM: But I don’t think they understood any of what was happening right then. The important thing, though, was that Ted got on the same satellite that HBO was on. He almost didn’t. RR: Well, that really made it. PM: That made a huge difference as the business grew. That’s when, I think, content became the driving force. Every time cable would improve its electronics it would have more to fill, and here it came. And people bought it. And that today is under attack by the a la carte proponents. How do you answer their desire to buy individual stations so to speak? RR: I think it’s because they don’t quite understand the business, and it’s our job to explain it to them. A la carte sounds like a perfectly logical thing: You want to watch three stations, you buy three stations. But the economics are such that you can’t do that. And also I think the argument that you wouldn’t have any new channels and have limited audience and what’s interesting to that audience. It would be really terrible if we have to break it up. And I don’t think the telephone companies would be so happy about that either. We may have an ally there if we plan that one properly. PM: If we plan it properly… but they’ve made some a la carte noise. But that’s just to be… RR: Different. PM: Obstreperous, I believe, might be the right word. Same with, I think, EchoStar saying they would love to be a la carte is merely posturing. RR: I think so. Everything we’ve been able to figure out – it’s not good. PM: I can’t imagine it from an economic standpoint, but the Internet, though, could do it. I think The New York Times called it “slivercasting” – where there is a very tiny potential audience. And it’s beginning to happen a little bit on the ‘Net. That is, a video channel, but not a channel in the linear sense we think of channels at the moment, is beginning to happen. Now cable is the big enabler of that possibility. RR: Absolutely right. PM: And that strikes me as good from both standpoints. I presume Comcast will play in that market in slivercasting. You do it with VOD to some degree already. RR: The thing about VOD, too, is the bulk of it is free. PM: What’s going to be the next little thing you’re going to shove down that pipe? We have VOD now, and that’s working very well. I have it in one home. High-definition television is a bandwidth question as it grows but clearly a major impetus to the consumer electronics business, if not to our own business. RR: I hope we’ll be seeing more hi-def stations. PM: Oh I do, too. The difference is so stunning. RR: It’s remarkable. We were at the Consumer Electronics Show and I think we made a deal with Panasonic and they had a display there where the figures could walk right off the screen. It just looked so realistic, that depth. PM: Somebody introduced a 102-inch plasma screen – that’s the size of a garage door. PM: I was asking about the people you respect the most. Who did the most damage to the business along the way? RR: I really can’t think of any major damage that was done by any cable operator. PM: Not a cable operator. I’m thinking from another standpoint. A politician. A broadcaster. A public figure of another kind. RR: I don’t know who to put the blame on for things that didn’t go as quickly as maybe we would have liked. But I think the consumer advocates have voiced their negative opinions of not only cable but all businesses and I don’t know that that’s been so much of a burden as people always predicted. Some of that would rub off and we’d have some trouble. I think when we had to roll back the price at 17%—that was difficult. That was the first year we ever lost. PM: Right. Oddly though, it positioned the industry better. RR: Well, we’ve come right back around. PM: And as the rules worked, better boxes made better revenue. It was an odd impetus. There were some things we had to do any way, and I believe it was Malone who figured part of that out. RR: He probably did. If any good was going to happen in the industry, Malone was part of it somewhere. I really have a tremendous respect for him. PM: He’s now the biggest cable operator in the rest of the world. RR: I understand that. PM: It’s an interesting thing. He says he regrets selling to AT&T and Armstrong and I believe him when he says that. But you’ve got those systems now. RR: Yeah. And they needed help. John’s philosophy was “a subscriber is a subscriber is a subscriber” … so some of them needed a little “re-varnishing,” a little cleaning up. By the time it got to us we were fortunately able to do all that. PM: I live on two different Comcast systems now. In the Denver area, where I have a town home and that is a very, very good system now. And then in Breckenridge, where it’s improving. It’s taking a little longer because it’s smaller. RR: Usually I say, when people are having trouble, I suggest they move [laugh] to one of ours… PM: That’s easier said than done, though [laugh]. I’ve also had VOOM, one of Chuck Dolan’s few mistakes and have had DirecTV and Dish ’cause I try all this stuff to see what everyone’s doing. We even had Direcway and Wild Blue so that we can compare and understand. DirecTV does a pretty good job, I think, though the Comcast system in Denver outshines everything we’ve had yet. But we haven’t had VoIP, but we will shortly. RR: We will. It’s coming, no question about that. We were a little slow compared to Cox. PM: But you wanted to get it right RR: We wanted to get it right and make sure that we weren’t running the business in a hurry. PM: What do you think the next big opportunity is going to be for cable? RR: Telephone. PM: In saying telephone, do you mean more than just the idea of just the landline in VoIP? How close are you in making the Sprint Nextel wireless component work? RR: It works, but we’re just trying to get it set up properly. I think before the end of the year. I’m not positive, but almost sure before the end of the year we’ll have all the bugs out of it and we’re moving a mile a minute right now. PM: That’s a really important step for the business. And how the bundles work is going to change some of the “who-does-what-to-whom.” RR: We’ll figure out ways to make it work. The interesting thing, I think, is that there’s as many dissatisfied telephone people as there are dissatisfied cable people. PM: I’m sure of that. RR: I hear some horror stories about us. I have people call me up or write me a letter and I can tell you they say we didn’t do this right, we didn’t do that right and they have a beef. And I usually answer those myself. I call them back or write them a letter and try to find out what happened and usually they’re right. So that’s why I say the bottom line still is how good can we take care of those customers. If they’re happy with us, they’re not going to switch. PM: Do you feel in the years you were growing this business you missed any opportunities? RR: Oh sure. One big one that I kid everyone about is Las Vegas. PM: The system? RR: We had it in our hand and our guys just wouldn’t pay the extra money. PM: And that’s the biggest growth market in the country. RR: It’s the first time I ever bowed to the mob. Our own mob, that is. So everyone in the company knows about it. PM: What would you like to see as your legacy in the business? RR: Well I really don’t see any legacy. I just think I was fortunate to have gotten in the business in the first place. PM: I think we all were fortunate on that. RR: I believed in it enough that you go out and borrow money and buy systems. I think one of the main things I really appreciated was the culture of the company. PM: Well that’s got to be a reflection of you. RR: Well, it’s everybody. The feeling is that it’s a family. And as it got bigger and bigger it became harder to keep that going, but I still want people to feel that they belong and that they are as important as the guy next to them. And I’ve said often. What do we have, 68,000 people? 70,000 people? We’re actually even approaching now 80,000 if we count Comcast Spectacor. So with all those people, it’s hard to keep that going, but the way you do it is you become real good friends with the group you’re working in. We’re all divided up into different kinds of groups. PM: So you’re very decentralized. RR: So if you could feel that the people around you are your friends and you want them to be your friends, then that family feeling can continue on, and that’s a philosophical thing. We’re not doing it by the book and being rigid about the rules, you can’t do this or you can’t do that. Don’t step on my toe or I’ll step on your foot. That attitude doesn’t exist around here. I think that’s part of the way to have a business going that you enjoy doing. PM: And clearly you enjoy this. RR: Oh yeah. I think it’s a great business and the people are terrific. Ralph Roberts/Comcast Time Line 1963
Company founded by Ralph Roberts, Daniel Aaron and Julian Brodsky with purchase of 1,200-subscriber cable system in Tupelo, Miss. 1972
First public stock offering, NASDAQ. 1986
Comcast doubles in size to 1.2 million cable customers with the purchase of 26% of Group W cable. Comcast makes founding investment in QVC. 1988
Comcast purchases 50% of Storer Communications Inc., raising the number of Comcast subscribers to more than 2 million and making Comcast the fifth-largest cable operator. Comcast enters the cellular telecommunications field with the purchase of American Cellular Network Corp. (Amcell), whose New Jersey and Wilmington, Del., service territory covers a population of 2 million. 1990
Brian Roberts elected president, Comcast Corp. Ralph Roberts receives the Walter Kaitz Foundation Award. 1993
Ralph Roberts receives Vanguard Award for leadership from the NCTA. 1995
Comcast purchases a 57% stake in QVC and assumes management of the world’s leading electronic retailer. Brian Roberts named NCTA chairman. 1996
Comcast forms Comcast Spectacor, a sports venture owning and operating the NHL Philadelphia Flyers, the NBA Philadelphia 76ers, the First Union Spectrum and the First Union Center. Announces the formation of a regional sports channel, Comcast SportsNet. 1997
Microsoft invests $1 billion in Comcast. Comcast acquires a 40% controlling interest in E! Entertainment in a partnership with Disney. 2000
Comcast completes acquisition of Lenfest Communications Inc., adding approximately 1.3 million cable subscribers. Comcast completes cable system swaps with Adelphia and AT&T, gaining Adelphia customers in Florida, Indiana, Michigan, New Jersey, New Mexico and Pennsylvania and AT&T customers in Florida, Michigan, New Jersey, Pennsylvania and Washington, D.C. Ralph Roberts inducted into the Cable Television Hall of Fame 2001
Comcast completes the acquisition of Home Team Sports and combines it with Comcast SportsNet under a new division, Comcast Regional Sports Television. Comcast completes the acquisition of select AT&T cable systems in six states, adding 595,000 customers and 115,000 AT&T subscribers in Baltimore. Comcast completes acquisition of controlling interest in The Golf Channel and acquisition of Outdoor Life Network. Comcast launches hi-def television service and video-on-demand service. Comcast and AT&T Broadband announce their agreement to merge. 2002
Comcast launches G4, a network dedicated to entertainment, news and information about video games and the interactive entertainment industry. Comcast and AT&T Broadband complete their $47.5 billion merger, combining systems to serve 21 million video customers in 41 states, with 6.3 million digital video customers, 3.3 million high-speed customers and 1.3 million cable phone subscribers, making Comcast the largest cable operator in the U.S. 2003
Comcast sells its stake in QVC Inc. for $7.9 billion to Liberty Media Corp. Comcast and Radio One Inc. form TV One to serve African-American viewers. Forms Comcast Sports-Net Chicago with the Chicago Blackhawks, Bulls, Cubs and White Sox. Comcast purchases Tribune’s remaining stake in The Golf Channel. 2004
Comcast’s acquisition bid for Disney ultimately fails. 2005
Comcast joins Time Warner Cable in a bid for Adelphia’s assets. Comcast joins Time Warner Cable, Cox and Bright House in a $200 million deal with Sprint Nextel to offer wireless services; bundled offerings, like video telephony, caller ID and other ITV home apps are expected.

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