COX COO TAKES FALL

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After more than a year as one of the top operating executives in the cable industry, Cox Communications Inc.'s executive vice president of operations, Margaret Bellville, resigned abruptly last week-amid speculation that she took the onus for Cox's competitive problems in its largest market.

Bellville, whose resignation takes effect Feb. 2, was in charge of all Cox Communications systems and support functions, including marketing, customer support, customer care, research, advertising sales and commercial business services. One of the more visible female executives in cable-Women in Cable and Telecommunications named her "Woman of the Year" in November-Bellville was long touted to be one of two executives being groomed for the top spot at Cox.

Patrick Esser, a 20-year company veteran who most recently served as senior vice president of operations, will replace her.

In a telephone interview last Friday, Bellville said she decided to leave Cox after graduating from a three-month advanced management program at Harvard Business School last year.

"I really got a lot out of it in terms of understanding my personal capabilities," Bellville said. "I got really excited about the whole notion of technology and broadband."

She added: "I've been here six years and I'm really kind of ready to explore new opportunities. I've been looking at some things and I was starting to feel a little pulled [toward them]. I didn't think it was fair to the people here for my head to be somewhere else."

Bellville said she has been grooming her successor, Esser, for the past two years to ultimately take her position.

For months, industry speculation has been rampant that Bellville would be the last to take the fall for Cox's competitive problems in Phoenix last year.

In July, Cox reported disappointing second-quarter cash flow growth numbers-a 7- percent increase, below the 10 percent level sought by most investors-partly because of marketing costs from fending off Qwest Communications International Inc.'s aggressive rollout of video service over digital subscriber line technology.

Targeting areas not yet upgraded by Cox in Phoenix, Qwest was able to sign about 50,000 customers in the market. On the day of the earnings announcement, Cox's stock price dropped 18 percent, to $35.81 from $43.88. At about noon Friday, the stock price was $47.25, down 75 cents.

With 617,000 subscribers, Phoenix is Cox's largest market and represents about 10 percent of the company's total customer base.

But although those problems appear to have been addressed-Cox's third-quarter cash flow numbers were more in line with the industry and Qwest announced it would halt expansion of its VDSL service in Phoenix-Cox management still smarted over the situation.

The company cleaned house in Phoenix. Vice president and general manager Gregg Holmes resigned in August and was replaced by Steve Rizley, the former regional head of Cox's ad-sales division.

Bellville denied last week that the problems in Phoenix led to her departure, and added she'd be attending the Harvard program during the entire second quarter.

"If anything, I feel like I helped lead overcoming the Phoenix issue, getting them in a better place and getting the company in a better place," Bellville said.

Bellville joined Cox in 1995 as vice president of its eastern region, after stints at Century Communications Corp., and AT&T Corp. In 1999, Bellville was promoted to executive vice president of operations.

Bellville was one of the top three women in cable on the operations side, a group that includes Insight Communications Co. Inc. executive vice president and chief financial officer Kim Kelly and Adelphia Communications Corp.'s senior vice president of operations, Ann Montgomery.

She was considered to be one of two Cox executives being groomed for the CEO position. CFO Jimmy Hayes was the other.

Bellville's resignation is the latest in a line of recent departures at Cox. Last year, chief technology officer and executive vice president of engineering Alex Best retired; executive vice president of new business development David Woodrow also left in September to head up Qwest Digital Media.

"Obviously there has been more management turmoil there than investors want to see," said one analyst who asked not to be named.

The analyst speculated that Bellville's departure may not be as tied to the Phoenix problems as much as an internal power struggle.

"Maggie and Jimmy Hayes have been rivals in what is viewed as a succession to the CEO role," the analyst said. "There has been speculation that if it didn't go well, one of them would end up leaving."

Bellville suffered what was perceived as a snub from Robbins when he failed to show at the WICT gala in New York, where Bellville was honored as woman of the year.

Robbins explained that he had a prior engagement-and sent a videotaped message commending Bellville's accomplishments-but some observers saw it as a sign that Bellville had lost favor with her boss.

Bellville said last week she did not have any problems working for Robbins. She also wrote off the speculation regarding Robbins' WICT no-show, adding that when she told Robbins the date of the gala, he informed her of another commitment.

"We agreed to this a long time ago," Bellville said. "He is a very supportive boss, especially for women."

There has also been industry speculation that Bellville's assertive management style clashed with that of Robbins and other Cox senior managers.

Bellville dismissed any notion that her management style caused any friction with her colleagues.

"I have always been supported by Jim and the team here for my competitive-mindedness, my aggressiveness," Bellville said. "That hasn't changed. Frankly, what I'm hearing from a lot of people, including Jim Robbins, is they appreciated what I've brought here. There are a lot of very aggressive people around here, so I think it's OK."

A cable marketing executive last week acknowledged that because Bellville came from the highly competitive cellular telephone business before joining cable, she may have brought a more aggressive management style with her. "But we need that," the executive added.

Robbins-who was said to be unavailable for comment-praised Bellville in a prepared statement.

"Maggie was responsible for a number of positive cultural changes during her tenure here, including a more competitive mind-set and the addition of a robust sales component to our traditionally strong customer-service orientation," Robbins said in the statement. "She should be very proud of her work here and I expect her influence will be felt for years to come.

"Maggie is a change agent at heart, and while we will miss her positive energy here at Cox, I understand her desire to move on to greater challenges."

Bellville's departure underscores a growing trend in the cable industry-women are leaving in droves.

A Federal Communications Commission report issued last week showed that of the 2,752 jobs lost in the cable industry between 1998 and 1999, 2,025 of those jobs, or 74 percent, were held by women. The number of women holding top management jobs in cable is also dwindling.

According to the FCC report, women made up 34.4 percent of officials and managers for cable operators in 1999, down from 35.2 percent in 1998 and 36 percent in 1997.

Bellville said she is looking at several different opportunities-none formally yet-but hopes that she can still keep her ties to the cable industry.

"I'm hopeful that I can resurface somewhere where I can continue the work I've been doing with WICT and CTAM [Cable & Telecommunications Association for Marketing] and other organizations to continue that advocacy," Bellville said. "I hope I'm not gone [from the industry] for long."

Bellville added that she has held no formal discussions with potential employers and plans to take a little time off before returning to the business world.

"Some of my Harvard classmates are getting together in Thailand for a reunion,"

Bellville said. "We're looking into that."

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