Cox Comunication 50th Anniversary

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A special supplement to Multichannel News

COX COMMUNICATIONS: 50 YEARS IN CABLE Family Values Guide MSO Through Half-Century of Growth, Innovation AS CABLE AND telecommunications provider Cox Communications marks 50 years in the multichannelvideo business this year, it’s instructive to look much further back — to the early part of the 20th century — to see how some of its family traditions took root.

James M. Cox — who founded the company that is now Cox Enterprises by buying the Dayton (Ohio) Evening News in 1898 — enacted several milestone laws as governor of Ohio, governing workmen’s compensation, mothers’ pensions and enhancements to the penal system.

The newspaper company that “Jimmy” Cox created, and that later expanded into TV and radio broadcasting, embraced many of the ideals and principles he employed as a public servant.

He was dedicated to treating employees, customers and communities fairly and respectfully, according to biographies. His theory: take care of your employees and they will take care of your customers.

Cox died in 1957. But his family and his family business have carried on a spirit of civic and corporate involvement and responsibility.

A PEOPLE COMPANY

Cox Communications — the Atlanta-based cable business that today represents about two-thirds of the parent company’s revenue and a higher share of the profit — has built and maintained a reputation for taking care of its people and customers and offering new products and services, all while delivering strong financial results.

Cox has won repeated customer-service surveys and has

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BY K.C. NEEL

Above, a Cox employee with a circa-1962 channel lineup. At left, a campaign pennant for company founder James M. Cox. been considered a leader in diversity and workplace excellence by cable industry groups such as Women in Cable Telecommunications and the Cable and Telecommunications Human Resources Association.

Outside experts have agreed: DiversityInc has named Cox as one of the best places for people of color and gender to work for the past several years.

Cox Communications president Pat Esser credits the Cox family for Cox Communications’ corporate culture, which James M. Cox kick-started more than a century ago and which current Cox Enterprises chairman James C. Kennedy continues today.

“It all started with the governor,” Esser said. “We have fourthgeneration family members working inside the business — Jim Kennedy and Alex Taylor [senior vice president of field operations for Cox Communications] and that helps ensure the authen-

tic business model and culture here.”

Cox has always cared about their employees and its customers, Turner Broadcasting System vice chairman Andrew Heller said.

“It all started with the governor. … We have fourth-generation family members working inside the business.”

PATRICK ESSER, COX COMMUNICATIONS PRESIDENT

“It’s like family for them,” he said. “This is a family-owned business and it shows in how they treat their customers and their employees. It starts with Jim Kennedy and it flows through Pat Esser all the way through the company.

“They [the Cox family] pushed their family values into corporate America and that’s unusual here,” Heller added.

“They made a bet early on that their values infused into their

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Cox has long relied on its technicians, from its earliest employees in 1962 (top l.) through the triple-play era of the 1990s (r.). corporate mindset were good business. And it turned out to be a good bet for Cox.” Cox Enterprises CEO Jimmy Hayes said Cox Communications’ 20,000 employees are just as important to the preservation and embodiment of the company’s corporate values and environment. “Every decision Cox makes starts with answering the question, ‘How will this impact our employees?’ ” Hayes said. “They are the key ingredient in the secret sauce that is all about making Cox, Cox.”

JOB OF A LIFETIME

Longevity and loyalty are in short supply in business, but Cox has worked hard to create an environment where employees want to stick with the company for life.

“We like for people to think about that when they join the company that they’re going to be here for the duration,” Hayes, a 16-year veteran of the cable company who was its chief financial officer when he moved to Cox Enterprises in 2005, said. “I know some of my best very best friends are right here at Cox and that we’ll be celebrating at each other’s retirements.”

Cox is famous for grooming its employees to rise through the ranks. The company has extensive career-management and advancement programs in place enabling employees to move

up the ranks; improve their skill sets; and feel fulfilled professionally.

Esser’s history typifies the Cox culture. He has been with the company for almost 34 years, starting as “the local programming/public-access/community relations/ whatever-needed-to-be-done guy” at Cox’s Hampton Roads, Va., system.

“Every decision Cox makes starts with answering the question, ‘How will this impact our employees?’ ”

JIMMY HAYES, CEO, COX ENTERPRISES

Jill Campbell, who was appointed senior vice president and chief operating officer this past March, has been an operations executive with Cox for 29 years.

Other long-timers in the senior ranks include Billy Farina, senior vice president, Cox Media (28 years); David Pugliese, senior vice president, product marketing (16 years); Bob Wilson, senior vice president, content acquisition (33 years); and

Joe Rooney, senior vice president, brand marketing, advertising and social media (25 years).

The company has long been a champion for diversifying its ranks and is one of the reasons Cox has received so many shout-outs from WICT and CTHRA. “Cox’s belief in diversity starts with Pat Esser and goes down from there,” WICT president and CEO Maria Brennan said. “Women consistently rise to the highest levels there, and they are always among the top companies in our PAR (Pay Equity; Advancement Opportunities; and Resources for Work/ Life Support) surveys because of their employee resources, hiring practices, and retention programs. They are big proponents of lifelong learning and they have always supported programs to retain and promote their talent.”

For all their attention to lifelong career planning for the company’s employees, Cox’s management has not shied away from external expertise. Some of the company’s most innovative executives have come from outside its incubator-like environment.

Ajit Dalvi was a marketing marvel when he came to Cox from The Coca-Cola Co. in 1982, setting “a high bar for cable marketing,” CTAM president and CEO Char Beales said.

Dalvi retired in 2000.

For years, Cox was the only cable company to include ex-

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Cox Communications Management Team PATRICK J. ESSER President

Years With The Company: 33 First Job With Cox: Director of programming

JILL CAMPBELL Executive Vice President, Chief Operations Officer

Years With The Company: 29 First Job With Cox: Director of Communications

MARK F. BOWSER Executive Vice President, Chief Financial Officer Cox chairman Leonard Reinsch (l.) presents a cable guide to 4-year-old Amy Carter, as then-Georgia Gov. Jimmy Carter looks on, as the Georgia Governor’s Mansion is connected to cable in 1971. tensive customer research into its marketing strategies, Beales noted.

“Today, Mark Greatrex is reinventing cable marketing as a research-driven marketing machine,” she said of the company’s senior vice president, chief marketing and sales officer, who also came to Cox from Coke about a year ago. (See story, page 24.)

Esser’s top team consists of long-term veterans and newcomers in an effort to infuse new energy and ideas with stability and institutional knowledge of the company and its core values.

RISK-TAKERS

Like its focus on employees and customers, Cox’s reputation for taking risks goes back to the parent company and the Cox family.

Cox was primarily a newspaper and broadcasting company until 1962, when it jumped into the cable business by buying systems in Lewistown, Lock Haven and Tyrone, Pa. Cox was one of the first broadcasters to see the potential of cable as an asset and ally, rather than a competitor or enemy.

The unit went public in 1964 and other acquisitions followed. By 1971, Cox was so bullish on the cable business it started building its own systems.

The company began experimenting with home-shopping services and expanded its reach by buying a 30% stake in a Denmark cable system in 1974. A year later, Cox served 386,861 customers and had 765 employees. The average customer bill was $6.47 a month.

By 1981, Cox served 1 million customers, was testing new services like INDAX (the precursor to interactive TV) and had begun delivering video signals via fiber-optic cable.

Cox Communications was the first MSO to offer phone service. Kennedy made the first ever phone call over a PCS network to the chairman of the FCC in 1997.

The company jumped into the commercial services business with both feet in 2000; that business now generates

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in Hampton Roads, Va.

Experience: Esser was part of the original

managemen team that formed Cox Media, Cox’s ad sales division

in Oklahoma City

Experience: Campbell currently serves on the Board

of Directors for the Special Olympics of Georgia.

Years With The Company: 6 First Job With Cox: Vice President of Cox Business Experience: Bowser began his career with the FBI

investigating white-collar crime.

LEN BARLIK Executive Vice President Of Product Management And Development

Years With The Company: 1 Experience: Prior to Cox, Barlik served as VP of

KEVIN HART Executive Vice President, Chief Technology Officer

Years With The Company: 1 Experience: Hart was most recently chief information

wireless and wireline product development for Sprint Nextel.

officer at Clearwire

ASHEESH SAKSENA Years With The Company: 1 Executive Vice Experience: Saksena served on the transition team President Chief for New York Gov. Andrew Cuomo and supported Strategy Officer New York Mayor Michael Bloomberg’s NYC 2020 initative.

RHONDA TAYLOR Executive Vice President, Chief People Officer

Years With The Company: 4 First Job With Cox: VP of people services for Cox

in Baton Rouge, La.

Experience: Taylor is actively involved in the

community fostering student education and development through speaking engagements and serving on boards and other organizations such as Junior Achievement and Alpha Kappa Alpha sorority.

more than $1.3 billion in revenue a year.

The MSO was first out of the gate when it came to digital channels and broadband as well, Esser said. It was a risk in 2002 when Cox exited the @Home partnership that delivered high-speed Internet services for a consortium of MSOs. But Cox’s team believed the company’s customers would be better served if it could deliver voice, video and data services over one network.

Cox built its own Internet and transitioned 1.5 million

customers to it in 90 days, Esser said.

“We have a culture that allows you to take risks,” Esser said. “We’ve had some missteps, but we have a belief in our network and our people. And if we take care of our customers, we’ll always make money.”

One area that didn’t turn out as expected was wireless phone service. Cox had purchased $500 million in spectrum, intending to build out its own wireless network, Esser said. “But five years later, we realized that the business

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had evolved differently than we thought. We decided there were better ways to handle this, and we changed direction.”

Cox — as part of another multi-MSO group — has agreed to sell that spectrum to Verizon Wireless, and the companies are partnering to offer wireless services in Cox markets. (Verizon is also doing the same thing with Comcast, Time Warner Cable and Bright House Networks under a separately but similar arrangement that, like the Cox pact, recently was granted conditional approval by the U.S. Department of Justice.)

In the wake of the 1984 Cable Act, which removed most local regulation of the cable industry, Cox’s cable operations were spun off into a separately held company. Parent Cox Enterprises took the MSO private a year later.

AT YOUR SERVICE

At a time when the cable industry as a whole was somewhat cavalier in trying to make their customers happy, Cox was conducting its first customer-service survey and making changes in its policies to make sure its customers were satisfied. Other operators scratched their heads at what they perceived as a waste of Cox’s time and money.

“I remember we were at an NCTA board meeting in the mid-1980s and some executives were outwardly mocking

[Cox president] Jim Robbins for his attention to customer service,” Char Beales, president and CEO of the Cable & Telecommunications Association for Marketing, said. “You have to remember at the time, there was no real competition for cable and they didn’t see the value in spending money on [customer service]. But Jim was willing make the bet that taking care of his customers was good for business and the bottom line.”

By the time cable companies came up against true nationwide competition from satellite-TV providers, Cox was relatively well situated to compete against the “dark stars.”

Satellite penetration rates were consistently lower in Cox markets than those served by other MSOs, according to Beales.

Here’s an example of why: A short time after Cox began offering phone service to its customers in San Diego, Calif., the company accidently released a number of customers’ private and unpublished phone numbers.

“It could have been a nightmare,” Esser said. “But our general manager there, Bill Geppert, contacted every single customer and told them we would do whatever it would take to fix the problem.”

In some cases, that meant giving the customer a new phone number. But the company also installed security sys-

tems in some homes and even helped some customers move to ensure their privacy. It took a couple of months, but it was worth every second, Esser said. And, he noted, the number of phone customers at that system went up after the incident “because we stood behind our customers and did the right thing.”

“One of the key things about Cox historically — and we’ve been around since 1898 — is that we have really great employees and really great relationships with our customers,” Hayes said.

“It’s that relationship with our customers that has allowed us to justify spending to improve customer service — it’s what we do and it’s what sets Cox apart from the rest. We have and will continue to invest aggressively in technology and in our relationship with our customers.”

MUTUAL RESPECT

Cox’s employees and customers aren’t the only groups that generally enjoy positive relationships with the company. The cable operator rarely finds itself in public spats with its program distributors, be it broadcasters or cable programming executives.

That’s not to say the company has been able to sidestep every contract negotiation landmine.

Going to School on Customer Care CUSTOMER SERVICE IS A FUNDAMENTAL operating function for Cox Communications, and historically, the company has spent considerable amounts of money to create and implement good customer care.

But six years ago, the cable operator took its support for service to another level. In 2006, Cox and the James M. Cox Foundation ponied up $2 million to form an endowment that would be used to help other companies deliver the quality customer service. Money from the endowment created the Cox Customer Experience Initiative at the University of Denver’s Bill Daniels College of Business.

The University of Denver is the only school in the country where an MBA student can get an advanced degree with a concentration in customer care, Jana Henthorn, senior vice president of academic and industry outreach at The Cable Center, said.

The program provides a graduate-level curriculum focused on the study and teaching customer care and is applicable to all industries. It’s designed to develop leaders in what Cox executives have long considered to be a critical and strategic discipline in any business.

The program started in 2006 with six students.

Today, Henthorn said, there are more than 100 students receiving a degree in customer experience management and there is a waiting list to get into the program. It is one of the most popular programs at the Daniels School, she said. “[Customer-experience management] is becom-

“Everyone finally gets it.

Customer service really is important and necessary for success.”

JANA HENTHORN, THE CABLE CENTER

ing a much hotter topic these days than it was six years ago and Cox was always ahead of the curve in this area,” Henthorn said. “The Cox folks wanted this be a program that every industry around the globe could benefit from and we have made presentations all over the world. They felt that rising tides lift all boats and it seems to have worked because customer care and the customer experience has become a much more important piece of every business.”

Part of the program involves the financial return companies can have with their CEM programs. The Cable Center and University of Denver professors Charles Patti and Ron Rizzuto are currently compil-

ing case studies showing how customer care can be financially rewarding — something Cox executives have long preached, often to the scorn of other industry executives, until recently. Today, many companies have created executive customerexperience positions and extensive customer-care programs to enhance the value proposition of cable service, according to Henthorn.

In addition to the generic business classes at the University of Denver, the Cox customer-care endowment also funds a collection of cable-specific programs and initiatives. The Cable Center created the Customer Care Committee, which involves 11 customer-service executives from national and international MSOs. The group conducts monthly webinars and two face-to-face meetings per year in which they share best practices, network and bring in outside experts to discuss how companies can better serve their customers.

“The Cox Family Foundation and Cox Communications have certainly fulfilled their initial goal with this endowment,” Henthorn said. “And every industry is reaping the benefit of their investment. It has been a very successful program that continues to put the customer experience at the top of a business’ priorities.

“Everyone finally gets it. Customer service really is important and necessary for success. Jim Robbins really had it right. He always said customer service was going to our biggest differentiator and he was correct.

Today, other executives believe that as strongly as he did back then,” Henthorn said.

— K.C. Neel

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Among those in this circa 1976 photo at Cox’s Spokane, Wash., system were Cox’s then-president Henry Harris (far l.) and Roger Pierce (third from r.) and HBO’s Don Anderson (far r.).

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Cox has publicly sparred with Fox and LIN TV over retransmission consent fees and Robbins took ESPN to task in 2003 over rising carriage fees and sports-rights costs. Even so, the imbroglios are few and far between and when they do arise, they tend to be short-lived and non-disruptive.

Robbins, who served as Cox’s president from 1995 until his 2005 retirement, didn’t take his fights personally either.

ESPN executive vice president sales and marketing Sean Bratches remembers being paired with Robbins for an industry golf tournament during the public spat between the two companies.

“I was a little nervous about it,” Bratches, who ran the affiliate negotiation team at ESPN, said. “But Jim came up to me and said, ‘Let’s put the knives away and have some fun.’ And we did. And we worked out our differences, too.”

Heller, also a longtime distribution executive at Turner, said Cox manages to avoid potentially messy and unsettling negotiations because of the way its executives conduct themselves. Its executives (including Wilson) come to negotiations with respect for the people on the other side of the table, Heller said.

The Cox team can drive a hard bargain, Heller said, but negotiations are fair, respectful and professional, usually resulting in smooth talks and deals that benefit both parties.

Like other MSOs in the 1980s and early 1990s, Cox invested in programming companies and ventured outside the U.S. to offer services. The company created U.K. Gold in 1991, in a programming partnership with BBC and Thames Entertainment.

It also offered cable and phone services to U.K. residents

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in a partnership formed in 1993 with Telewest that ended when Cox sold its stake in that MSO six years later.

Cox was also one of the original investors in Discovery Communications in 1985. The company held on to that asset until 2007, when it sold its stake in the programmer for $1.3 billion and cable network Travel Channel.

Until that time, said Discovery Communications CEO David Zaslav, Cox plowed every dime it made on the investment back into the programming entity.

LONG-TERM THINKERS

“Cox’s philosophy is different from so many other players in that they take long-term views of the business and everything they do is driven by customer satisfaction,” Zaslav said. “Their philosophy with their investment in Discovery was the same.

They always took the long-term view of sustainable growth and they wanted quality content. It’s one of the reasons Discovery is as successful today as it is.”

Cox sold controlling interest in Travel Channel to Scripps Networks Interactive in 2009 for about $975 million, continuing to own 35% of Travel Channel Media.

Cox Enterprises CEO Hayes spent 16 of his 32 years with Cox at Cox Communications. He was the MSO’s chief financial officer in 1994, when it bought Times Mirror Cable and increased its subscriber base to 3.2 million from 1.9 million overnight.

As part of that deal, the blended company was spun off and became a publicly traded company — again.

“It was truly a watershed event for our company and the sin-

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I think everyone at the time did.” gle best transaction we could have made,” Hayes said.

Hayes said that “while being part of a public company was In the two decades that followed, Cox continued to expand its reach, eventually serving 6 million video customers in 18 exciting, our company’s strategic mindset was better aligned with being a private company.” states.

“Going public allowed us to rapidly accelerate our growth, but It launched high-speed data; became the first operator to it also made us focus more on get into the phone business; short-term tactics to appease the launched a commercial-servicmarket than we like to,” Hayes es unit and created the bundled “The chance to go said. “The chance to go priservice offering of voice, video private again in 2004 vate again in 2004 allowed us and data on one network, from allowed us to reinvest to reinvest in one of the greatone company. est assets we know of — Cox Along the way, Cox continin one of the greatest Communications. Going priued to come up with creative assets we know of — vate allowed, and continues to and innovative ways to help its afford us, greater control and employees succeed and make Cox Communications.” the opportunity to really focus its customers happy and satJIMMY HAYES, COX ENTERPRISES CEO on our long-term strategy — on isfied. what’s right for the company — In 2004, Cox Enterprises, which had maintained a majority ownership stake in the pub- for our employees, customers and shareholders.”

While founder James M. Cox set the framework that enabled licly traded Cox Communications, decided to take the compathe cable company to be created and succeed, he probably nevny private — again.

Esser recalled getting a phone call from Kennedy on a Sun- er envisioned anything like the multiple-service provider that day morning telling him that the Cox Enterprises board had eventually emerged, according to his grandson, company chairman James C. Kennedy. voted to take Cox Communications private.

“I think my grandfather would be very proud and amazed by “He told me, ‘I know we have an incredible product and I am willing to make a bet on you and the company,’ ” Esser said. “I all the things that we do at Cox Communications that he didn’t was speechless. They were willing to borrow $8.5 billion be- even know would exist,” Kennedy said. “I’m very thankful that we got into this business. It’s been a great 50 years and the opcause they believed in us.

“As an employee, you should feel good about that, and portunities for future growth remain plentiful.” •

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THE COX FOOTPRINT Cox Communications’ operating divisions Cox California

Began operation in 1962 In 1992, placed the first PCS (personal communications service) telephone call through a cable system.

GM: David A. Bialis

Cox Central Region

Began operation in 1964 In 2003, launched digital video recorder service in Gainesville, Fla. GM: L. Keith Gregory

Began operation in 1980 (as Cox Omaha) Was the first location to launch markets for wireless, Cox Digital Telephone and digital television services.

GM: Marilyn Burrows

Cox New England-Cleveland

Cox Arizona

Cox Florida-Georgia

Began operation in 1973 (as Cox Connecticut) Originated the Cox Tech Solutions model and replicated it throughout the MSO. GM: John Wolfe

Cox Virginia

Began operation in 1975 (as Cox Roanoke) In 1993, became the first system to provide business telecom services (now Cox Business).

GM: Gary T. McCollum

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Cox Louisiana

Began operation in 1978 (as Cox Jefferson Parish) In 2002, launched Cox Sports Television, the first-ever regional network for sports fans across the Gulf Coast.

GM: Jacqueline Vines

Cox Oklahoma

Began operation in 1979 The system operates a charitable foundation completely funded and guided by employees (More than $3.6 million raised and 100,000 children served).

GM: Percy Kirk

Began operation in 1995 Tested and launched CCI’s new home security product in Tucson.

GM: J. Stephen Rizley

Cox Las Vegas

Began operation in 1998 Serves about 125,000 rooms in the world’s largest hotels and resorts.

GM: Duffy Leone SOURCE: Cox Communications

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IN THEIR WORDS Cable Industry Players on Cox at 50 “I think my grandfather [James M. Cox] would be very proud and amazed by all the things that we do at Cox Communications that he didn’t even know would exist.

I’m very thankful that we got into this business. It’s been a great 50 years and the opportunities for future growth remain plentiful.”

JAMES C. KENNEDY, CHAIRMAN, COX ENTERPRISES INC.

“In most respects, Cox comes from a culture of independent thought. Customers come first with Cox. They have a perspective of ownership in a business it toils in. They understand the ecosystem in which they operate. It has always been a company with extraordinary leadership. Pat Esser, and Jim Robbins before him, are and were thoughtful leaders with a delicate touch in the marketplace. They punch above their weight class as tough negotiators but when they come to the table, it’s always well-thought out, well-structured and has everyone’s best interest in mind.”

SEAN BRATCHES, EVP, SALES AND MARKETING, ESPN

“Everyone in the industry gets it today, but Jim Robbins [Cox’s president until his retirement in 2005] was the first to say that customer service was going to be the cable industry’s big differentiator, and he was right.”

JANA HENTHORN, SVP OF ACADEMIC AND INDUSTRY OUTREACH, THE CABLE CENTER

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“Cox is, quite simply, a company to admire. In every way, Cox exemplifies the highest in quality and integrity: in their vision, their operations, their management and perhaps most importantly, in their people.

They not only excel at what they do, they do it with unwavering integrity.”

JOSH SAPAN, CEO, AMC NETWORKS

“Companies like Cox Communications are the reason that cable is such a great industry to be part of. Cox is a great family-owned company that has long been a leader in providing best-in-class services and support to its customers and employees. I’m not only familiar with Cox from my time here at NCTA, but as chairman of the FCC. I’ve personally witnessed how they conduct business and couldn’t be more thrilled that they are celebrating 50 years in cable.

Congratulations to Pat Esser and the entire Cox team.”

MICHAEL POWELL, CEO, NATIONAL CABLE & TELECOMMUNICATIONS ASSOCIATION

“For Cox, it’s always been about how they treat people. Their commitment to their customers and employees is legendary. It’s the little things that help keep their staff happy. They make their lives just a little easier, which makes doing their jobs easier.

And for years, Cox was the only company that conducted customer research. Their branding campaigns are in CTAM’s Hall of Fame. They took marketing to another level.”

CHAR BEALES, PRESIDENT, CABLE & TELECOMMUNICATIONS ASSOCIATION FOR MARKETING

“Cox is a company that has been built on a legacy where taking care of employees is just the right thing to do and is central to the bottom line. We know that organizations that are gender-diverse tend to be more profitable and Cox proved that as well. When we do the PAR survey and we see that diversity works, the biggest issue in terms of that success is top-down leadership — not just in theory, but in practice. Cox’s leadership exemplifies that in every way.”

MARIA BRENNAN, CEO, WOMEN IN CABLE & TELECOMMUNICATIONS

“Cox Communications has led a lot of the growth the industry sees today. They invested in and thought differently about customer service and didn’t have a lot of support for a long time.

But they proved they could do what they promised and their customers liked it. Their formula became a path the whole industry has followed.

It’s a great company with great people, values and integrity. You shake hands with Pat [Essser, Cox’s CEO] and you know you don’t need to do anything else.”

DAVID ZASLAV, CEO, DISCOVERY COMMUNICATIONS

“When you sit across the table with someone who takes a professional, pragmatic approach to negotiations, you tend to behave the same way. I never raised my voice to Jim [Robbins] or Pat [Esser] during a negotiation and I can’t say that about everyone. That’s not to say negotiations can’t be tough. But they listen and try to understand both sides of an issue and they are creative in finding solutions to problems. They are open to experimenting and trying new things and that has been a good learning experience for us both. They are open to trying new things and experimenting with their partners to come up with the best business model for everyone involved.”

ANDY HELLER, VICE CHAIRMAN, TURNER BROADCASTING SYSTEM

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REBUILDING LOUISIANA How Cox’s Cable Systems — and People — Rebounded From Hurricane Katrina

BY K.C. NEEL

WHEN COX COMMUNICATIONS’ emergency-prepared ness team visited New Orleans in the summer of 2005 for an annual test of disasterpreparedness and recovery plans, no one knew how important and fortuitous that training would be.

Three months later, Hurricane Katrina hit the Gulf Coast, devastating everything in its path and, combined with levee failures, decimating entire swaths of the city, some of which have yet to be rebuilt.

“We had to start living that book right away. It was no longer just an exercise,” Cox Communications president Pat Esser said.

The first thing Cox did after the hurricane struck was make sure all its employees were located and safe.

“We knew we needed to take care of our employees first,” Jacqui Vines, senior vice president of Cox Louisiana and general manager of the Baton Rouge system at the time, said.

“It all goes back to our core values of taking care of our employees so they can take care of our customers. And that is exactly what happened.

“We had so many unsung heroes at Cox during this disaster. They helped save lives and they worked even when they didn’t have a place to stay,” Vines added.

Once everyone was accounted for — no employees were Above, a Cox field-service team maps out its plan for lost, but some workers’ family members died in the storm, tackling the damage caused by Hurricane Katrina. At according to Esser — Cox went about finding shelter for its right, a Cox technician repairs post-Katrina plant damage in an area strewn with abandoned boats. displaced staffers.

Many employees ended up in Baton Rouge, which also suffered damage, but not to the same extent as New Orleans.

Not only did that reassure employees who might have “We had three or four employees [from New Orleans] worried they weren’t going to have jobs, it helped encourage show up to work in Baton Rouge right after the storm to help residents who had evacuated to return to the city, she said. rebuild the system there, even though they didn’t have any“It all goes back to the governor,” Esser said of Cox Enterwhere to live and their homes prises founder James M. Cox. in New Orleans were gone,” “When he started (or bought) Vines said. a newspaper, he always made “We had so many “People who didn’t know sure it was part of the commuunsung heroes at Cox where they were going to nity. This was no different.” sleep were coming into work.

In New Orleans, not only during this disaster.

One guy got into his duck did Cox have to wait for the They helped save lives boat and was saving people power company to turn on its in New Orleans before the signal to customers’ homes, it and they worked even National Guard told him to go had to wait for many of those when they didn’t have a place home.” homes to be declared safe and, Some 700 New Orleansin many cases, be completely to stay.” based Cox employees were rebuilt.

JACQUI VINES, COX LOUISIANA set up in a Baton Rouge airIn some cases, those homes line hangar to begin the have still not been rebuilt and planning phase of the reconEsser doubts they ever will be. struction of the New Orleans system, which was all but de- Cox lost an estimated 100,000 customers due to the storm stroyed over that fateful Labor Day weekend. and its aftermath.

“The first thing we did was tell everyone that we were reWithin nine months, Cox had totally rebuilt its system in building,” Vines said. “We weren’t leaving the city. So many the Crescent City. The company ended up spending some other companies were leaving and we were telling people $550 million to rebuild its New Orleans network. It spent we were staying.” about $1 billion statewide to repair and upgrade its network

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following subsequent hurricanes, including the particularly pesky Gustav in 2008, Vines said.

To reinforce its dedication to the community, Cox opened a customer-care center in New Orleans a couple of years after the hurricane.

Cox has applied lessons learned from the experience to help other systems and divisions prepare for possible disasters. Things that no one would have thought of before became part of the company’s recovery plans, such as bringing in doctors to give tetanus shots to all employees, setting up day-care centers for employees, securing housing for staffers who had lost their homes or couldn’t access them and even setting up meals.

In New Orleans, the new network also has allowed Cox to offer its customers services it probably would not have been able to deliver for some time, given the age and bandwidth restrictions of the legacy plant, Vines said.

Today, the system in The Big Easy is one of Cox’s fastestgrowing operations, in terms of revenue-generating units. •

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YEARS OF COX COMMUNICATIONS |

A special supplement to Multichannel News

DELIVERING WHAT CUSTOMERS WANT

How Research Drives Cox’s Marketing, Product-Development Efforts BY KENT GIBBONS MARK GREATREX, WHO HAS BEEN CHIEF MARKETING OFFICER at Cox Communications since March 2011, is a big believer in research.

What the corporate senior vice president has learned so far in studying what Cox video customers want is pretty much a marketer’s dream: they want more, more and more.

• More digital video recorder storage and recording capabilities.

• More access to programs online (even in the home).

• More shows and movies in the on-demand libraries.

Now, Cox just needs to keep creating new and improved ing ourselves to bring the wonders of the plus-package exproducts to deliver on that demand — something Greatrex perience to life,” he said, including working with Cox’s ad said he and other Cox executives, including product-manage- and marketing agencies to figure out how best to dramatize ment overseer Len Barlik and chief technology officer Kevin the experience and “make it visceral.”

Finding those agencies — Cox’s marHart (see story, page 28), are focused on keting “thought partners” — was one accomplishing. of Greatrex’s first tasks. A review and “We are working very hard to speed up consolidation process resulted in Cox the pace at which we are able to launch choosing Publicis Groupe’s MediaVest products,” Greatrex said. “We are keenly as agency of record, overseeing what Adaware that we need to pick up the pace.” vertising Age termed $75 million to $100 A former brand marketing executive at million in yearly spending on measured The Coca-Cola Co. and America Online, media. Cox also tapped Draftfcb for diGreatrex pointed to the relatively streamrect-marketing activity and Marketing lined introduction of Cox TV Connect, Evolution for marketing research tasks, the Apple iPad app that enables viewing Greatrex said. of streamed live TV channels in the home, Customers can experience Cox’s prodas an example of Cox’s ability to go from ucts in person and at its retail stores, idea to commercial rollout in a matter of which were overhauled about nine months — shorter than typical “We are keenly in anticipation of Cox cable-TV product cycles. entering the wireless Insights as to which new vidaware that we business. Cox shifted e o s e r v ic e s wo u ld e xc it e C ox need to pick up directions and decided customers were gleaned from exnot to sell wireless sertensive research (by consulting firm the pace.” vice directly (instead Oliver Wyman) on what’s called the vidMARK GREATREX, partnering with VeriCOX CHIEF eo value proposition. Using real-world MARKETING OFFICER zon Wireless). examples of the best video services out Most of the compathere, including internationally, customers ny’s 135 retail stores were shown examples of what they have, that had been essentially payment dropas well as what may be possible in the future.

Perhaps unsurprisingly, customers liked what they saw off centers have been converted to Cox from Cox’s top-of-the-line “Advanced TV Plus” package, Solutions Stores, with improved displays including whole-home DVR with more storage and the Trio of Cox products and “learning lounges” guide that enables personalized favorites lists and enhanced where informal or group classes are held.

The rest will be upgraded in the next 12 program search.

“We see our highest-end video experience being the most months.

“We believe in retail, we’re continuing highly valued by customers,” Greatrex said. “It was quite an affirmation for us, in terms of the competitiveness of our to invest in retail and we’re trying to learn as much as we can about best practices in top-end experience.”

“On the marketing and branding front, we are challeng- merchandising,” Greatrex said. •

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Cox Solutions Stores get customers familiar with the MSO’s products in “learning lounges.”

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YEARS OF COX COMMUNICATIONS |

A special supplement to Multichannel News

2010s

COX COMMUNICATIONS: A TIMELINE

2002 Cox builds own IP network in five months and launches Cox High Speed Internet. Also launches high-definition TV in Las Vegas and Arizona.

2000 Cox Business Services formally established (now Cox Business). Cox Communications, with $3.5 billion in annual revenue, joins the Fortune 500 listing for the first time.

1999 Acquires more than 2.1 million customers to increase its subscriber rolls to 6 million customers in 18 states.

1990s

1997 Cox launches digital cable in Orange County, Calif., and creates a bundled package including high-speed Internet access, local and long-distance telephone service and digital video to customers in one network from one company.

1995 Cox acquires Times Mirror Cable Television, increasing the number of customers served from 1.8 million to 3.2 million subscribers. “Cable” is dropped from the name, which becomes Cox Communications.

Surpasses $1 billion in revenue.

1993 Begins serving business customers in Hampton Roads, Va.

1981 CableRep, the advertising sales division of Cox Cable is established. Began testing INDAX (interactive data exchange) in San Diego.

INDAX was a precursor to the Internet and allowed users to bank, shop and receive the latest news, sports, restaurant listings and other local information through the television. Uses fiber optic cable to transport video signals for the first time in Great Neck, N.Y.

1996 Congress passes the 1996 Telecommunications Act, deregulating the industry and encouraging additional competition in the telecommunications industry. Cox completes system swaps that strengthen its clusters in Hampton Roads, Va.; New England; Omaha, Neb.; Phoenix and Louisiana.

1994 Cox and Southwestern Bell call off a planned merger. Cox establishes a partnership with Times Mirror Co. to develop programming, resulting in the creation of Outdoor Life Network (now NBC Sports Network) and Speedvision (now Speed Channel).

1980s

1992 Cox makes the world’s first PCS phone call, resulting in a Pioneer’s Preference Award of wireless spectrum from the Federal Communications Commission. Named Operator of the Year by Cablevision magazine.

1970s

1986 James “Jim” Robbins is named president of CCC.

2008 Cox rolls out the “Digeez,” a new brand mascot launched to coincide with the slogan “Your Friend in the Digital Age.”

1985 The public shares of Cox Cable Communications are merged into Cox Enterprises, making it a private company.

1984 Cox Broadcasting spins off its cable operations and launches Cox Cable Communications Inc.

1971 Cox Cable Communications stock moves from over-thecounter trading to the American Stock Exchange (symbol CXC).

1964 Cox Broadcasting Corporate (later Cox Communications) is established as a public company traded on the New York Stock Exchange.

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1960s

1968 Cox Cable Communications is incorporated to consolidate Cox’s cable-TV interests.

1962 Cox enterprises enters the cable-television business, purchasing systems in Lewistown, Lock Haven and Tyrone, Pa., followed by systems in California, Oregon and Washington.

IMAGES COURTESY OF COX COMMUNICATIONS

2006 Jim Robbins, creator of the bundle, retires and dies later in the year. Patrick Esser succeeds him as president.

2000s

2009 Cox completes EON (extended optical network) upgrade, increasing systems’ capacity to 1 Gigahertz. Is named Operator of the Year by Multichannel News.

2011 Cox, after experimenting with the launch of its own wireless product, announces co-marketing agreement with Verizon Wireless to provide easy customer access to wireless services.

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YEARS OF COX COMMUNICATIONS |

FEEDING THE MACHINE

Q&A: CTO Hart Aims to Boost ‘Speed to Market’ IN CABLE, TECHNOLOGY project timelines used to be measured in years — hence the mocking reference to development on “cable time.” But today, operators that move at a glacial pace risk getting left behind by fleet-footed rivals.

At Cox Communications, Kevin Hart, executive vice president and chief technology officer, has been leading his organization with one overarching goal: to get new and innovative products and services into cust​omers’ hands more quickly. Hart, who joined the MSO in April 2011 from Clearwire, spoke recently with Multichannel News technology editor Todd Spangler.

MCN: You’ve now been at Cox for a little more than a year. What’s been your experience so far?

Kevin Hart: What I’ve seen is, the company’s had a great history reinventing itself when there are new trends in technology. It’s great to be a part of a company that has the spirit of reinventing itself and taking calculated risks, including our efforts in wireless over the years.

I think it’s time for us to do that again. We’re spending time on the multiple-screen opportunity — that’s one of the macro themes. From a technology standpoint, the priorities are around speed to market for new product development.

A lot of new things are in the queue. And we’re investing in the network, which is a big priority as well.

MCN: What are the key technology project areas for Cox right now?

KH: From a video-road-map perspective, we are developing Cox TV Connect, which is our IP-enabled wireless-streaming application. We’re adding additional national channels and local channels. It’s on iPad right now, and we’ll be enabling additional form factors in the next few quarters. We’ve built out a lot of the infrastructure for the CDN [content delivery network] capability … We have a couple hundred thousand unique users currently, which, on the one hand, has been pretty rapid uptake, but there’s still a lot of upside to go. The aim is to make the companion screens even more interactive with our other products.

And we’re continuing to improve our traditional home video platform. We have our video gateway, the dual IP/ QAM gateway, in test currently, working with our key manufacturers. We’ve got the silicon in test and looking hopefully for a launch at the first of the year to enable a suite of new video and Wi-Fi capabilities.

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MCN: What else is on the front burner?

KH: We’re enabling mobility through our Wi-Fi buildout [as part of the CableWiFi roaming initiative with Comcast, Time Warner Cable and Bright House Networks], and hospitality Wi-Fi continues to show good progress. Our home-security solution is in trial in Arizona. From an internal perspective, we’ve recently deployed our new call-center platform.

It’s the newest generation of the Avaya call-center platform, with all the most recent capabilities in terms of call transfer and the ability to make recommendations to customers about packages in real time. We’re also upgrading and overhauling our overall Web capabilities, particularly for Cox Business.

So it’s pretty busy on the new-product front.

A special supplement to Multichannel News

we’re looking at other compression techniques and basic bandwidth and growth needs. At 50% plus year-over-year Internet-bandwidth growth, we have a big effort to keep up with that.

MCN: Do you see the need to go above 1 GHz? KH: That’s not in our three-to-five-year plan. We have continued optimization with node splits, and reclaiming analog.

We have levers that give us plenty of runway.

MCN: What’s the path to get to all-digital?

KH: What we’re trying to do … is pace ourselves in alignment with next-generation technology. With the next-generation gateway, we feel like we may be able to leapfrog the DTA [digital transport adapter] approach. Some of the DTAs, while effective, are one-way devices. With the gateway we’d take IP [video] to all the devices in the home.

We’re still going through the range of options in terms of how to make the investment to position ourselves for future compatibility. HD DTAs could make sense for certain markets, but we’re also considering whether there are other steps that could leapfrog that.

It’s an example of what the company’s done a good job at over the last 50 years: sometimes being aggressive and making innovative investments, like our 1-GHz upgrade, and other times pacing ourselves to time the investment for the long run.

MCN: What new features are coming to the Trio HD guide? How widely has that been adopted so far?

KH: As it relates to the Trio guide, we haven’t really begun to market that as broadly as we could. It’s still available to a relatively small set of our subscribers. Marketing that on a national scale will get us customer uplift. We’re also going to come out with a recommendation engine in the Trio guide, probably late in the fourth quarter [of] this year.

MCN: Cox introduced the Trio guide last year [after expecting to deploy it widely by the end of 2010]. What’s been the holdup?

KH: We had some challenges related to what you see in an early deployment. But it’s really stabilized over the last year or so.

“We’re spending time on the multiple-screen opportunity — that’s one of the macro themes.”

MCN: What kind of activity is happening on the commercial-services side?

KH: We’re continuing to standardize our Ethernet infrastructure buildout across all the Cox Metro Ethernet markets, to move to the next generation of platforms. We’re trialing IP Centrex [managed voice services] and also adding new products and capabilities as part of our current line extension. And we have continued efforts around wireless backhaul. We’re investing in our capabilities to harden and scale our services. The bulk of Cox Business customers are less than 20 employees, and we’re looking to move that up to 20 to 100 employees.

MCN: With most of Cox’s systems at 1 GHz, how big an issue is spectrum capacity?

KH: A little over 85% of our footprint is at 1 GHz, but spectrum utilization is always something we keep an eye on. We have many levers to operate from. We’re pushing our highspeed Internet above 860 MHz by using DOCSIS 3.0, so we’re taking advantage of that.

We’re contemplating analog-to-digital conversion. And

MCN: Motorola, which is a big supplier to Cox, is now part of Google. What does that mean for Cox? KH: I know that Marwan [Fawaz, former CTO of Charter Communications] just took a big role there [as head of Motorola Mobility’s Home division]. We’re meeting with him in a few weeks. For now, it’s business as usual. We’ll continue to look at their products and services. They do have a big embedded base in our footprint. •

Kevin Hart, Cox CTO

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