No Wavering on Innovation
By George Winslow -- Multichannel News, 7/29/2007 8:00:00 PM
As many independent operators struggled in recent months to find ways to comply with the Federal Communications Commission's ban on integrated set-top boxes, BendBroadband's management was looking outside that controversy to cable's next big technological challenge — the February 2009 transition to digital television signals.
In the fall of 2006, BendBroadband president, CEO and chairman Amy Tykeson decided to apply for a waiver that would allow the operator to deploy inexpensive digital set-top boxes on the grounds that it would bite the bullet and undertake a massive effort to go all-digital by the 2009 deadline.
In January, the FCC granted the exemption, one of only a handful of early waivers given to operators. Many had to wait until just days before the July 1 deadline to see if their requests would be granted or denied.
| *As a percentage of basic subscribers SOURCE: Company data. |
| Employees: 180 |
| Homes Passed: 59,000 |
| Basic Subscribers: 36,400 |
| Digital Penetration: 52%* |
| High-Speed Internet: 26,100 |
| Phone: 5,800 |
“Going all-digital is a huge initiative,” Tykeson said. “But when we did the math, we felt that it was the only way to go.”
The new boxes, with CableCard point-of-deployment security modules, were much more expensive than those with built-in conditional-access features — a fact that would have forced BendBroadband to dramatically raise box-rental rates.
“People are very price-conscious in our market,” said Tykeson. “If you don't have a set-top box you can rent for under $2, you have a problem. It is very tough to get people to ante up $8 per set-top box if they have three TVs in their house.”
“Our strategy has always been to invest early and not have to play catch-up,” she added. “Because we don't have a lot of other systems, we can't afford to make a competitive mistake.”
This kind of forward thinking is one example of a long tradition of innovation at BendBroadband that has earned Tykeson widespread accolades in the cable industry and now recognition as Multichannel News Independent Cable Executive of the Year.
When most operators were still only offering video, BendBroadband rolled out high-speed Internet service in 1997, a first for Oregon and one of the earliest launches in the country. It followed that up with digital cable in 1999, high-definition television in 2004, digital simulcasting in 2005 — another first for Oregon — and commercial and residential phone service in 2006.
Since 1997, when Tykeson became president, the company has invested over $60 million in upgrading its system and rolling out new services, spending about $10 million annually in recent years.
“They've consistently taken a very forward-looking and innovative approach,” said Patrick Knorr, general manager of Sunflower Broadband, another independent operator with a long record of technological innovation.
Both Tykeson and outsiders trace the company's tradition of innovation back to her father, Don, who ran BendBroadband for decades and remains a trusted adviser.
Both father and daughter were inducted into the Cable Pioneers this May and Amy describes Don as a “true cable pioneer and visionary.”
“Amy has tremendous operational skills that come from her family,” said National Cable Television Cooperative CEO Jeff Abbas. “They've taken a long-term view of the system that has produced tremendous results.”
Don Tykeson moved the family to Eugene in the early 1960s and became president of Liberty Communications, which was then just a struggling TV broadcaster.
“My dad had the vision to take the company into the cable industry and built up Liberty into the 17th largest cable operator in the U.S. over the next 20 years,” Tykeson recalled.
“We often talked about being an entrepreneur and he always subscribed to the theory that the key was finding the best people you could and letting them do their job,” she added.
After getting a bachelor's degree at the University of Oregon and landing a marketing job for a wood-products company, Tykeson went jogging one day in Eugene with her father and asked him for some career advice. He suggested cable, and in May of 1980 she followed him down to the Houston cable show, where he helped arrange meetings with a number of programmers.
Tykeson recalled being “very taken by the people at Home Box Office,” and she took a job in their Chicago office in affiliate sales. Eventually, she moved to HBO's office in New York, rising to the position of VP of area marketing in New York.
“It was a wonderful exciting adventure,” Tykeson recalled. But by 1987, she and her husband were ready to move back to Oregon.
Several years earlier, in 1983, Don Tykeson and other shareholders of Liberty sold the company to John Malone's TCI, but the Tykeson family retained the Bend system. When Amy moved back to Portland, Ore., she began working with some of the other family business and in 1989 she started serving on the board of BendBroadband.
As she got more involved in the cable operation, she decided to go back to school, getting an MBA to hone her management skills in 1997, the same year she became president of BendBroadband, taking operational control from her dad.
While getting her MBA, Tykeson really began to map out the company's future. “Having the corporate experience at HBO was a very big asset for me. But going back to school was really a turning point in terms of my confidence and strategic thinking,” she said.
As part of her strategy, the company moved quickly to roll out high-speed Internet. “We just felt the margins on that were very attractive and being a first mover would be huge,” she noted.
The decision would also be important for the area's overall economy, which has boomed in the last decade, making Bend one of the hottest property markets on the West Coast.
“Our investment in Central Oregon has played a major role in this area, becoming so hot in terms of a place to live because people can telecommute from here,” she noted.
That kind of community involvement has always been a key feature of Tykeson's career, stressed Pat Thompson, managing director of RBC Daniels, who became friends with Tykeson through Women in Cable Telecommunications.
Tykeson helped found the Chicago chapter in 1980 and remained very active in the organization after moving to New York, becoming the national president in 1986. “She had always been very involved and has done some tremendous things to help women become a more important part of this industry,” Thomson said.
Currently, Tykeson is on the board of the National Cable & Telecommunications Association, which gave her a prestigious Vanguard Award at this year's Cable Show. She is a regular visitor to Washington, D.C, where she has testified on behalf of the interests of small operators and is president of the Oregon Cable Telecommunications Association and an executive committee member of Economic Development of Central Oregon.
But she is perhaps most proud of the organization and tradition of innovation that she has created at BendBroadband. “The culture of a company is what defines its success,” she said, pointing to her dad's adage of finding the best people for the job. “The people we have on the team are fundamental to where we are going.”
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