Q&A with Bryan J. Rader, President, ICTA and President & CEO of MediaWorks

Recently, Private & Wireless Broadband Magazine's President and CEO Robert L. Vogelsang visited with Bryan J. Rader, President of the ICTA and President & CEO of MediaWorks, an Atlanta, GA based PCO. The topic of discussion was challenges facing the private cable operator in this era of convergence and steps the ICTA is taking to prepare this industry meet those challenges.

Robert L .Vogelsang: I want to congratulate you in becoming president of the Independent Cable Telecommunications Association (ICTA). You're following the great footsteps of John Norcott, who did a tremendous amount for this industry.

Bryan Rader: I would like to start by saying the ICTA is extremely excited that National Satellite Publishing (NSP) has repurchased the magazine. Your influence and involvement in the industry and your energy were sorely missed. We are excited that you're back and look forward to working together again. Your energy and our membership together are the roots of the future of this industry.

RLV: Thank you Bryan. Tell us a little bit about the ICTA, who you are and whom you represent? And what you see as the biggest challenges are facing the independent cable operators as they position their businesses to provide broadband access and services?

BR: ICTA is made up of a number of different groups. Private cable operators who we call PCOs, system operators which are SOs and these are typically companies who are dealing DirecTV and EchoStar and providing those services to apartments and MDUs (multi-dwelling units) which include property owners, property managers and developers.

This past year in November at our board meeting, we made the commitment to bring a much larger number of MDUs into our association. Not only into the association but actually to help represent our board. Companies like AMLI and Equity Residential, Archtone, United Dominium, and Avalon Bay, are national real estate companies that in most cases have one or two people who handle nothing but ancillary services such as cable, telecom, high speed internet. They know this business as well as we do. Collectively, it is our belief that as we rebuild this industry after the last year or two of having some of our biggest players fail, we must rely heavily on our customers, the MDUs, to participate with us in rebuilding the future of this industry.

Most recently, ICTA has begun working with the MDU industry to create something called "Program of Excellence," which is a road map for not only current PCOs, but also future PCOs on how to build a successful business. This is what MDUs are looking for. This is what it means to be customer service-oriented. This is what quality is. This is how to prioritize the things your going to do in this business. With the expectations that the new PCOs coming into this business will know what their customer wants on the front end.

No longer can we afford to have failures in this business. The ICTA has taken the position, along with the MDU industry, that its priority is determining what's important to the MDU industry as its relates to technology and broadband services and to put together a road map. And then, to communicate that road map to all the current private cable operators and also the new PCOs and SOs that will be entering the industry in years to come.

RLV: What steps will your operators have to take to address competition from other providers (telcos, RBOCs, cable, ISPs, etc.) that are targeting MDUs with bundled voice, video and data services?

BR: I think the best success stories of private cable operators that I've seen in the past years have been companies that not only understood the technology but understood how to market those technologies. While years ago, they may have only been bundling primarily video service today we're required to bundle other things like high-speed Internet, digital services, and in some cases telephony. Those who know how to market and have been really effective marketing video services, those who know the MDU business, those who know the apartment resident and apartment manager and really know their customer, will be equally effective in marketing data and telecom services. We are closest to our customers, so if we have been effective in offering private cable, we should develop the right methodology to offer high speed internet whether it be a wireless internet solution, cable modem or even a DSL solution.

It's not so much about the technology, it's how you market, and bundle and service that technology. And we should be more effective with ISPs and wireless telephony providers because we know the MDU business as we've been in it for a long time. We've been effective in marketing cable. They're just now figuring what this business is all about. We understand it, we understand the customer and we should be the most effective in offering these new services as well.

RLV: Considering your experience in the private cable industry, maybe you can address the current size and scope of the industry?

BR: The most recent FCC competition report shows the industry at about 1.8 million subscribers. That number is probably shrinking and increasing at the same time. It's shrinking because two of our larger providers have recently sold a number of their units to franchised cable providers. But at the same time, there is a whole new crop of private cable operators coming into the marketplace that are building a presence in one area or another. And in doing so, they're not growing by 20 or 30,000 units, they're growing at 3, 4, 5000 units at a pop. There are early stages of companies that we think will be our future success stories in this business. There are several in the Southeast, the East Coast, Florida, Texas, West Coast, etc. that are building this new presence. The ICTA has, as far as representation, a large portion of that 1.8 million. I couldn't tell you exactly what the percentage is but it is probably the majority of the industry. As far as the MDU side, our board alone represents almost a million units of multifamily.

RLV: In this age of convergence, when cable operators are trying to become telcos, telcos are trying to become cable operators and everyone is trying to become a data provider, is there an unified message or theme that says: "this is the ICTA and this is our current and future role?"

BR: I think the ICTA's biggest concern right now has some to do with the product whether we're bundling video or data, voice or video, voice and data, or just video and data, but it's even more a function of service. If you look at what we're hearing from our members that are MDU owners, they're telling us the things that matter are a function of performance, much of which has to do with quality of product, but also the level of service, and responsiveness, and ability to do things well on-site, and with the home office. And providing information, being open 24 hours a day, 7 days a week, 365 days a year and having an emergency program for service. It's less to do with whether or not you offer data or telephone. I think competitively, we have to begin to offer those things, but it's a region by region decision.

In the Southeast where MediaWorks operates, we're not competing against MSOs with 750 planted in every one of our markets. In fact, our franchised cable companies have not yet rolled out @Home or another cable modem solution. So we've had the benefit of sitting on the sidelines for a while. And only today do we need to come out with our Internet solution. I don't feel any pressure to have a telephone solution today. In fact, my telephone strategy has been to not have a telephone solution.

The ICTA is encouraging not our entry into all of these categories as much as our ability to service them effectively. If you're going to offer high-speed data, don't just say you're doing it, don't just offer a good product, offer it with the right level of service. Otherwise the MDU industry is going to come back to us and say, look you had a hard time with cable, you're having a hard time with data, don't even think about offering a telephone product. So we're very concerned about the level of service that our members perform with. Our end users are guiding us in what that level of service should be.

RLV: The ICTA enjoys a very close relationship with the SBCA. Given that relationship, how does the ICTA balance that relationship with the needs of its private cable membership?

BR: Our relationship with SBCA is designed for a couple of reasons. Number one, over the last two to three years, we've noticed that ICTA members are utilizing digital services much more frequently——meaning DirecTV, EchoStar, and prior to that, PrimeStar. Because of that use, there's been a crossover of issues that ICTA members are facing which are similar to what SBCA members are facing. Similarly, the SBCA has had an interest in expanding its member's business opportunities or market opportunities and one of the categories they're very interested in is multi-family——the MDU marketplace. Nobody really has come up with the perfect solution for DBS and MDUs today. SBCA members have been very interested in that category for quite some time, so it's two different industries——one with expertise in digital services, and one with expertise in the multifamily industry with commonalties that in working together bring both areas of expertise together.

RLV: It has been brought up that you're doing some excellent training. Will you discuss some of the training that you are conducting for the industry?

BR: It's still very early in the idea stages, much less in the implementation. Once "Program of Excellence" has been rolled out, we anticipate our training happening by early second quarter of this year, the next evolutionary step is to begin training both existing and future PCOs and SOs on how to achieve Program of Excellence.

As an example, one of the elements that MDUs have said is very important to them is 24x7x365 customer service along with some other things delineated in terms of response time. Well, to just lay that out as part of Program of Excellence and not back it up with adequate training is a mistake. We aren't doing this as a public relations effort. It is more of, this is the bar, and we're setting it at this level. Now we're going to give you the training and the tools underneath it to assist you to actually achieve Program of Excellence. The performance requirements that are a part of Program of Excellence——is something that is far as whether it is regionally done or nationally done, done by internet—— we're not that far yet. I think the concept is just now taking hold.

RLV: You spoke of your new membership. What is your membership and where are you going with your membership program? Are you trying to bring in more real estate, or PCO, SO type?

BR: ICTA has grown both on the PCO and SO side, but it's growing even faster on the MDU side. I said we're just under a million units of MDU representation. We're probably three times bigger today than we were six months ago in terms of MDU representation and we're very proud of that. We think we've just scratched the surface of the MDU industry participating in ICTA today.