Cable One Draws On Katrina Lessons in Joplin

CEO Might Lifts Morale As MSO Gets System Back On Line

By Linda Moss -- Multichannel News, 6/13/2011 12:01:00 AM

When Cable One CEO Tom Might visited Joplin, Mo., shortly after a deadly tornado swept through that town last month, killing 141 people and flattening the cable company’s gear, he made a bad situation better.

“I think his coming up there has a good impact on the associates,” Jerry McKenna, Cable One’s senior vice president and chief sales and marketing officer, told Multichannel News. The CEO’s crisis-management expertise enabled the system to get back in business fairly quickly.

Phoenix-based Cable One has about 720,000 cable, phone and high-speed Internet subscribers overall in systems in 19 states. Of that number, about 15,000 are in Joplin, Mo., and roughly 2,600 of those customers lost their homes, company spokeswoman Melany Stroupe said.

Cable One also provides service — via fiber — to neighboring Miami and Vinita, Okla.

BOUNCING BACK

“We’re in pretty good shape now,” McKenna said. The operator reports having restored service to about 90 percent of its customers in Joplin.

The powerful F-5 rated tornado that plowed through Joplin on May 22 made the town look like it had been bombed, the devastation was so great. And Cable One’s plant was in the twister’s path. Might was able to add his expertise to the recovery effort as well as attempting to lift morale, as he did when he visited Cable One’s Gulf Coast systems that were ravaged by Hurricane Katrina in 2005, McKenna said.

“Tom’s an industrial engineer, so he’s very, very helpful at getting stuff organized,” McKenna said. “He was very instrumental working with our field techs to figure out a way we could get a pole line across about a mile area that had been destroyed by the tornado.”

Might lent a hand while Cable One was “staging all the field techs and mapping exactly where our poles were down and getting all the stuff in there to get things replaced,” McKenna said.

That meant getting new poles in place. Cable One staffers “literally bulldozed a path,” McKenna said. “They got permission from the city, as I understand it, they bulldozed a path, they laid fiber on the ground, and then they just bought poles.”

The damage wasn’t as dire or widespread as Katrina, he noted.

“Katrina, it destroyed the whole system along the Gulf Coast,” McKenna said. “It tore down our poles, our drops, etc. Here, it was very specific to a geographic area about a mile wide. So if you were just north or south of where the tornado went through, all the drops and poles and everything were still working. It was just a matter of getting the fiber back to the nodes and turning it back on.”

The MSO was fortunate that only one employee had to go to the hospital for injuries sustained during the tornado, but they weren’t serious, according to McKenna.

About a half-dozen employees lost their homes, he said.

There is no assessment yet for the monetary toll the tornado has taken on the Joplin system, according to McKenna, not just physical damage but lost business.

Cable One does have insurance, but it has a high deductible, he said.

“More than likely, we will have to absorb a significant amount of the damage there,” McKenna said. “You can’t really tell now how much that will be.”

The tornado and Katrina are similar in at least one respect: They not only damaged Cable One’s equipment; they both destroyed the homes of Cable One’s customers.

“It’s pretty difficult at this point in time to have a clear understanding of when we would be back to where we once were,” McKenna said. “And that may take years, because you’ve got to build all those homes. It’s like Katrina.”

COMPANYWIDE CHALLENGES

As for Cable One as a whole, McKenna, a 17-year veteran of the Washington Post Co.-owned cable provider, said strategic challenges include how to respond when bigger players start offering high-publicized services, such as streaming video to the iPad.

“When it comes to what I would call these evolving technologies, we like to be a follower and not the leader,” McKenna said. “Being a midsized operator, we have a limited amount of capital and we have to place our bets very carefully. That being said, we are looking at some applications that we think we could use to transport content within the home.”

Cable One is holding an internal meeting this month “to decide what our next steps will be,” according to McKenna. Developing an iPad app to stream content is one of the options being considered as it would “make our cable service more valuable to a customer.”

An iPad app could help Cable One address what McKenna called the “constant challenge” of fighting off the two satellite providers, DirecTV and Dish Network, and AT&T’s U-verse video service. “

We track our market share against those guys all the time, and for a period of time we were declining,” he said. “We seem to be stabilizing now. In our markets anyway, DirecTV is improving their market share and Dish, their market share is eroding a bit.”

AT&T U-verse is coming into states such as Mississippi, Alabama and Tennessee, where Cable One has systems. Cable One has responded with a $25-$25-$25 video, high-speed Internet and phone bundle that it has “promoted that very aggressively, particularly among our current customers.”

Cable One has also made some product improvements, including launching a 50-Megabyteper- second Internet service that customers get if they sign a one- or two-year contract. It also lowered the cost of DVRs and is distributing a $5-a-month HDTV box for customers with expanded basic. And it’s offering free same-day repair for subscribers who call by 3 p.m., according to McKenna.