The Mass. Ave. Backslapper

The first time I met Kyle McSlarrow, on the third floor of NCTA’s offices in Washington, D.C., he shook my hand and patted me on the back. Now, I’ve been covering cable for more than a decade, and that has never happened to me inside NCTA’s headquarters. In fact, I can safely say that no NCTA CEO has ever slapped me on the back. I continued into McSlarrow’s office, which only one month ago was the place where the notoriously buttoned-up Robert Sachs conducted business, and noticed a tin of Copenhagen chewing tobacco right in the middle of his desk. The new NCTA chief describes his affinity for the snuff as his one vice. "I don’t want people to think that I’m just a button-downed lobbyist," the NCTA’s newest president and CEO says. There’s doesn’t seem to be any danger of that. My first impression of the backslapping, tobacco-chewing McSlarrow’s NCTA: This is the beginning of a radically different era on Mass. Ave. The first Republican to act as the cable industry’s main lobbyist, McSlarrow already has brought a different, looser atmosphere to NCTA’s offices. While he still wears the lobbyists’ uniform—dark suit, white oxford, red tie—he says he pines for his dot-com days when he could get away with khakis and a polo shirt. During our interview last month, McSlarrow answered questions in a confident, easygoing manner—despite the fact that he had been on the job for less than two weeks and was at the beginning of a steep learning curve. The industry got a glimpse of the new NCTA on McSlarrow’s first day—his first hours, in fact—on the job, when Sen. Ted Stevens (R-AK) lobbed an indecency grenade at NCTA’s newest lobbyist. The senator told a roomful of broadcasters that he wanted to see broadcast-type indecency standards applied to cable networks. At first, NCTA acted as it always had. McSlarrow’s staff rushed out a statement; McSlarrow met with Stevens’ staff; he also met with Stevens, inviting the senator to the National Show to discuss the issue. A critical new direction emerged for the industry amid that firestorm, however. For the past five years, throughout Robert Sachs’ tenure, NCTA would have reminded Stevens of the First Amendment and would have pointed out that congressional regulation of cable programming wouldn’t stand up in the courts. McSlarrow sounded a much more conciliatory tone. He saw a political problem and set about trying to help Stevens develop a solution to it. McSlarrow wants to make sure that Congress sees cable as being part of the solution to the problem of too much violence and too much sex on television. "[Stevens is] concerned about the impact on children," McSlarrow says. "It’s a concern we all share. I’ve never met an American who said they’re not concerned at all about the impact of TV on children." Like Sachs, McSlarrow made sure to talk about cable’s channel-blocking technology, PSAs and educational outreach efforts. But he consciously did not want to come out with a knee-jerk response to Stevens’ comments. "A lot of what we’re doing right now is listening," he says. "My attitude is not to reflexively not listen when somebody has a criticism." It was this type of attitude from a social conservative that concerned several programmers when he took the job. During his two failed runs for Congress in Northern Virginia (1992 and 1994), McSlarrow supported socially conservative positions on abortion and gun control in liberal-leaning Northern Virginia. How would those positions fly with what some say are traditionally left-of-center cable networks? Right now, the networks aren’t complaining on the record, and are adopting a wait-and-see (or wait and hope) approach. McSlarrow says they have been universally supportive. "I haven’t picked up personally any angst about my desire to get us to a place where everybody can be comfortable," McSlarrow says. Part of McSlarrow’s appeal for NCTA’s board is his comfort level with leading Republicans, who control the White House and Congress. He was the top aide to two Senate majority leaders—Robert Dole (R-KS) and Trent Lott (R-MS). He ran Dan Quayle’s failed presidential campaign in 2000. And he is especially close to Energy Secretary Spencer Abraham, for whom he worked before he took the NCTA gig. Cable is hoping those connections will serve the industry well as it enters an era of threatened regulation—from indecency to the digital transition to the 1996 Telecom Act rewrite Sen. Stevens is planning. There’s also telecom legislation, IP regulation, plug-and-play agreements and programmer-operator divides that McSlarrow will have to work through. McSlarrow says he’s busy learning the nuances of all those issues. At the end of our interview, I reached over to shake McSlarrow’s hand. He took my hand, reached over and slapped me on the back again. Yes, it’s the beginning of a much different era on Mass. Ave. Q&A With Kyle McSlarrow CableWORLD: You ran for Congress twice. Any more runs in your future? Kyle McSlarrow: I doubt it. The older I get the less likely it becomes. I did it when I was in my early 30s—probably because I didn’t know any better. I didn’t know what I was getting into (laughs). I’m looking to help other people at this point. Appointed office is a lot easier than elective office, as it turns out. CW: Was there a defining moment that made you decide to be a Republican? McSlarrow: I responded warmly to Ronald Reagan in 1976. In the 1980 presidential election, I remember Reagan and his positive, optimistic message. That was the point I started thinking about which party to support. The most defining moment was probably the Iranian hostage situation. CW: How would you describe your style? McSlarrow: There probably is a core style, although I’ve been in different management positions—I’ve done small business and large agencies. At the core, I believe that you have to give people clear direction. I ask a lot of questions. My style is to have faith and trust in people that are capable of doing their jobs. It hasn’t happened a lot, but every once in a while I discover that someone’s not capable of doing that. I’m not scared to make a change in those instances. CW: What was your first dealing with the cable industry? McSlarrow: It was when I worked with Sen. Robert Dole and dealt with former NCTA chief Decker Anstrom during the 1996 Telecom Act. I became interested in broadband issues and began reading a lot about it. After helping Dan Quayle with his presidential run in Arizona, I wanted to come back to Washington, D.C. So I called up Robert Sachs because I heard he had an opening. He had already made his decision. But we talked. That didn’t work out. That was the first time I actually tried to act on the interest. Right after that—because I still had this bug—I decided to join Grassroots.com, which is now Grassroots Enterprises Inc. CW: I was surprised when you got the job because you had no previous cable experience. Why do you think the board chose you? McSlarrow: We talked about it in the first interview. I asked NCTA board members if they were concerned that I’ve got a huge learning curve here. The message I got back from one of them was: "Look, in the Energy Department, you had to know a lot about physics to hold your own against Nobel laureates that work for you. You could probably figure this out." I believe in total immersion. I talk to a lot of people. I read all day long and well into the evening. I’m spending Saturday and Sunday going through briefing books. I’m driving everybody crazy at NCTA because I’m asking questions. Some are probably basic. Others I hope are increasingly more sophisticated questions. It will come. CW: Describe your first two weeks on the job. McSlarrow: My plan was to launch a strategic review, something I was going to get started on the first day. I also simply wanted to get to know people, so I had a whole series of one-on-one meetings set up and brown bag lunches. Literally hours after I walked through the door, Sen. Stevens made his comments about indecency. We were off and running in a direction that no one contemplated. You have to be nimble and adapt to it. It was probably good in the sense that it allowed me an opportunity to see the organization and everybody react to that. It was a good learning experience for them and for me. CW: There’s been a lot of press recently on your love of Sci Fi Channel’s Friday night schedule. Care to elaborate on that? McSlarrow: I’m not sure I really do want to elaborate on that. I’ve gotten teased unmercifully. CW: What would you add to that list? McSlarrow: There are a lot of channels that I like. I’m definitely a consumer. I like the Sci Fi lineup on Friday night. I’m a big fan of 24. I use my DVR a lot to watch these shows because I’m never home. I watch C-SPAN, of course. I’ve been on C-SPAN, on Washington Journal, a number of times. I’m a fan of the public policy process. I love watching C-SPAN. I lived on the Senate floor for four years. CW: If we turned on the TV in your office right now, what channel would come up? McSlarrow: I haven’t actually turned it on because I tend to do work in here. And if I turn it on, I’ll start watching. CW: What’s your schedule looking like in San Francisco? McSlarrow: They have me running, man. Friday through Tuesday night—I think somewhere in there I actually get a meal or two. Obviously, the National Show is my first opportunity to meet a lot of people in the industry. I’m really looking forward to it. Getting Personal With Kyle McSlarrow Last Book Read: Quicksilver, by Neal Stephenson. Must-See TV: 24. First Concert: Aerosmith, ’73. First Album: Beatles, Sgt. Pepper. Most Memorable Sporting Moment: Any Sooners football game. Favorite Restaurant: Pizza Hut. Celebrity Lookalike: Not going there. What Should Top McSlarrow’s Priority List? CableWORLD asked 10 cable executives to draw up a to-do list for the new NCTA president and CEO. Jim Robbins, president and CEO, Cox For the Industry: Three priorities are paramount. 1) With Congress and the FCC, McSlarrow should focus on the advancement of public policy and regulation that recognizes the cable sector as the only viable, fully facilities-based competitor to the incumbent local exchange carriers for IP-enabled services; 2) he should continue to illuminate policy makers and FCC officials, as well as consumers, that the multichannel video marketplace is fully competitive; and 3) NCTA should continue to educate policy makers and consumers on the various ways that cable technology can protect children from unwanted content, as well as unwanted contact via the Internet. Cable operators should keep up the charge in this with appropriate CSR training, bill stuffers, information on the Web and other strategies. For Cox: NCTA should support the reform of broadcast network abuse of retransmission consent. Coleman Breland, EVP, sales and marketing, Turner Network Sales For the Industry: McSlarrow should enlist cooperation across the NCTA board to do a good job self-governing in the areas of indecency and children’s programming. Then communicate those efforts to the FCC and concerned parties. For Turner: As we enter a new era of "branded environments" that extend into enhanced and interactive content as well as VOD, he should garner industrywide acceptance of metrics that reveal the impact to brands. Bob Rose, EVP, Court TV For the Industry: McSlarrow should try to slow down Congress and the FCC from reregulating our industry. For example, any regulation of basic cable programming for indecency and violence will have unintended implications on consumers and the industry’s creative future and economic growth. Without thoughtful and concentrated efforts by the entire industry, the FCC may be empowered by Congress to adopt measures to protect families in cable and satellite homes from viewing indecent and violent content from 6 a.m. to 10 p.m. I care about my kids’ viewing as much as any member of Congress, but I have control over their viewing through the set-top box and by monitoring what they watch. For Court TV: We’d like to compete on a level playing field. Retransmission consent has burdened this industry for years, and I want to help fix the issue. Why do operators pay approximately two to three times Court TV’s license fee for retrans networks that garnered exactly the same 0.9HH rating, or even a lower rating than Court TV? We find it stunningly unfair that any provider, cable or DBS, be forced to pay license fees for networks spun off of retransmission consent regulation, without regard to their content or quality, simply because the Big Four broadcasters threaten to prevent subscribers from watching the Super Bowl. Manish Jha, SVP, ESPN Mobile and President, NAMIC For the Industry: McSlarrow should focus on growth opportunities for the industry. A key one is to leverage content and brands to increase the adoption of digital services and serve a diverse customer base. For NAMIC: He should raise awareness of the increasingly multi-ethnic customer base our industry serves. That means supporting NAMIC and other industry organizations so they can become a better people development and business opportunity resource. Brian Koenig, president, CTHRA, and SVP, human resources, Scientific-Atlanta For the Industry: By establishing himself as a strong, respected voice for the industry, McSlarrow will build a solid foundation to advance NCTA’s initiatives involving consumers, the competitive environment, Congress and the FCC. For CTHRA: From a human resources perspective, CTHRA wants McSlarrow to use his voice to advocate that people are the priority within the cable industry. By positioning cable as a leading employer at the local and national level, McSlarrow will help companies throughout the industry attract and retain the talent needed to outperform our competition, advance the industry and break new ground in diversity. We encourage McSlarrow and the industry to look to CTHRA as its HR advisor. Matt Polka, president/CEO, American Cable Association For the Industry: These aren’t popular subjects for the programmer members of the NCTA, but they are subjects that have to get fixed before relations between cable operators and programmers can get better and before Congress steps in to legislate. 1) Retransmission consent: ending broadcast exclusivity; 2) programming: making programming transactions more transparent to Washington and consumers; 3) indecency: end the forced carriage of programming networks on the most widespread level of carriage that causes this problem in the first place; and 4) parity: ensure DBS and the big phone companies have to play by the same rules as cable. Mike Pandzik, president and CEO, NCTC For the Industry: The NCTA’s top priority should be to step up to the plate with a well-funded, national ad presence on why cable is a better deal than DBS. Only the NCTA is in a position to do this. I’d like to see us develop a new national brand-name identity for cable. (Imagine the national media buy a nickel or a dime per basic sub per month would support!) That’s one of the biggest advantages our DBS competitors have—they can spend against a single brand name in every market, and we can’t. For NCTC: McSlarrow should make a genuine effort during his first year to meet personally with his peer cable association heads. Come and speak at one of our board meetings. Learn what our issues and goals are and how we can work together to solve them while we advance the overall interests of our industry. We may not agree on every issue, but I’m sure there are many more issues we can agree on than there are issues that divide us. Kim Martin, EVP/GM, WE: Women’s Entertainment For the Industry: There are two priorities where the NCTA’s support is vital. The first is to continue encouraging close working relationships between operators and programmers, helping them see each other as partners in delivering quality content to subscribers. One of the key areas where programmers and cable operators have an opportunity to work as partners is in delivering a unified message to government officials that cable is the home for unique programming. With the NCTA’s leadership, we must ensure that indecency regulations do not restrict us from continuing to deliver interesting and appealing content to viewers. For WE: Over the last decade, the cable industry has made great strides in supporting the placement and promotion of women and minorities in key roles. It’s my hope that McSlarrow will use his voice and the power of the NCTA to further promote diversity within our industry. Organizations like NAMIC, WICT and the Walter Kaitz Foundation have made it their mission to mentor diverse young people. The only way they will thrive is by having proper funding and support to continue their legacy of building our industry’s next great leaders. Bob McIntyre, Chief Technical Officer, Scientific-Atlanta For Industry: McSlarrow should keep cable in a free market position, without federal regulations on critical new services like VoIP; prevent unreasonable requirements on MSO costs—such as a ban on integrated set-tops that ultimately cost the consumer more for less; and couch the embedded security ban forcing cable vendors to waste R&D resources on older technologies dictated by federal regulations [e.g. CableCARDs] when new technologies are clearly more efficient [e.g. NGNA]. For S-A: He should help promote consumer awareness of services like digital cable, HDTV, DVR and VOD. McSlarrow’s Top Four Challenges By Jerry Kent, CEO, Cebridge Connections Beyond making sure the NCTA stays focused on its current list of regulatory and legislative priorities (including, at the top of that list, parity with and protections against the latest efforts by Verizon and SBC), there are four items I hope Kyle McSlarrow will include on his priority list. Programmers vs. Operators: In the FCC’s vote on multicast, broadcasters were reminded of the value of a unified voice and the pitfalls of a fragmented voice. While cable won that debate, we shouldn’t take too much comfort in the victory. We’ll never realize the full potential of our industry or be consistently effective in Washington until the divide in our own house, that separates the interests of programmers and operators, is addressed. In the past, these issues have not been front and center, partly because programmers and operators are both NCTA members. I think NCTA’s top executive should play a role in this area. McSlarrow might start by bringing key representatives of the factions together to openly discuss issues that threaten the health of the core business that supports all of us (issues like the potential harms of the upcoming retransmission consent battles). Cable operators’ constantly eroding video margins are not good, long term, for either side. Retrans and Cash-for-Carriage: Retrans is possibly the biggest (and certainly the most immediate) potential contributor to an even greater divide between NCTA’s operator and programmer members. If nothing is done to mitigate the retrans debate, there will be a train wreck later this year, and cable operators could very well be the casualty (or, at least, the lightning rod for public outrage). I can do a lot with my cable plant. But one thing I can’t do is add more fringe networks to the expanded basic package in return for retransmission consent. There’s simply no more room, not if I’m going to remain competitive by offering double- and triple-play service bundles. It’s hard to argue that cable operators and their customers should be forced to pay cash for broadcast signals that are available free over the air, delivered by profitable, private companies that are using free spectrum granted to them by the federal government. These issues come to a head in the context of retrans consent and the way it is often abused. That has to be addressed in the first half of this year. Otherwise, our interests will be divided even further and hence our industry’s effectiveness, in both the marketplace and Washington, will be severely compromised. I’m not naive enough to think we can eliminate retransmission consent. But we need to level the playing field—possibly by allowing operators to import distant signals when retrans negotiations break down, or finding some other competitive offset. Commercial Issues & Opportunities: Other than the National Show, it seems the NCTA has been focused almost exclusively on what happens inside Washington. But if the NCTA is going to live up to its true calling as a "trade" association, it should be more actively and consistently focused on helping its members address commercial as well as regulatory matters. Among others things, I think the NCTA could do a better job of gathering and collating industry/consumer data, which its members could use to more effectively develop, target and market their offerings. In other words, NCTA should strive to become the central clearinghouse for competitive information that will help improve our businesses. Yes, the NCTA has made some contributions in this and similar areas, but more can and should be done to honor its role as a trade association, involved with government as well as marketplace matters. Smaller, Independent Operators: While at the helm of Charter, I didn’t fully appreciate the unique challenges faced by smaller, independent operators. Now, of course, I experience those challenges, firsthand, every day. NCTA has done a great job supporting smaller operators on issues like the misappropriation of federal money through the USDA’s broadband loan program. But other issues remain unanswered. The Senate has a decidedly rural bias, and the rest of Washington is starting to follow suit: paying more attention to both the digital divide and values divide that separates rural communities from urban centers. The small operators are addressing the needs of those rural communities. Hence, the small operators fill a critical role in NCTA’s larger efforts to continue building our industry’s credibility on the Hill. At Cebridge, we decided to join the ACA because it is firmly focused on the smaller, independent operators’ unique needs. While I still believe we could all benefit from a truly unified voice, several things must happen first: NCTA must address the issues separating programmers and operators. NCTA must elevate and protect the voice of smaller operators at the organization’s policy- and strategy-setting table. And finally, NCTA and ACA must jointly determine how they might further consolidate their efforts, above and beyond their current level of cooperation. Ed.’s note: This is the text of the response Jerry Kent sent when we asked him to list what Kyle McSlarrow’s top priorities should be. We are running it in its entirety.