The National Cable Television Cooperative, the buying group that represents more than 700 small and medium-sized broadband and cable operators across the country, said it has named industry veteran Lou Borrelli as its new CEO, replacing Rich Fickle who earlier this year said he would retire after about 10 years at the helm. Borrelli’s appointment is effective June 1.

A highly respected executive, Borrelli has 43 years experience in the industry, dating back to Marcus Cable, where he was a founding partner. Borrelli was inducted into the Cable Center’s Cable Pioneers in 2002 and most recently served as CEO of Home and Entertainment for Digicel Group, which provides mobile phone, cable and broadband service to 27 countries in the Caribbean, and Central and South America.

Fickle told NCTC members in March that he would step down this year, ending a decade at the organization, which helps smaller operators buy equipment, programming and negotiate retransmission consent agreements with broadcasters, as a group. At the time he said he felt the organization needed “new blood” to help it enter its next stage.  

Borrelli brings a fresh perspective to the organization, as an owner and operator of small systems in second and third tier markets. 

In a press release, NCTC chairman Brad Mefferd said the organization’s board looked across the country, with the help of search firm Carlsen Resources, for Fickle’s replacement, adding that Borrelli “is the right leader, at the right time for the organization and our members.”

Also Read: Rich Fickle Takes His Time 

“We are thrilled to have a CEO of his caliber leading the organization. He is a proven industry veteran with a distinguished track record of innovation, transformation, talent development and a deep and wide knowledge of the industry,” Medford continued. “He will continue to build on the values-based cultural leadership and approach, and the hyper-focus on serving members that has been the NCTC’s hallmark since its inception. Throughout his career, Lou has harnessed technology advancements to drive new products and revenues, customer acquisition and retention and has led his teams with passion, creativity and integrity. We couldn’t be happier.”

Borrelli joins the organization as the industry is yet again experiencing a transformation, this time as streaming video and broadband dominate the landscape. The NCTC has kept up with the times, offering guidance and information as its members make that transition, as well as helping them navigate traditional avenues like retransmission consent negotiations. 

“I have tremendous respect for the NCTC’s rich history, charter and members,” Borrelli said in the press release. “This organization has significant potential to continue to reshape and reinvent the future of independent cable operators for years to come. I look forward to working with the incredibly talented NCTC team, our board, our members and the industry at large to accelerate innovation and create value for our members and their customers. This is a circle of life moment for me.”

Mefferd thanked Fickle for his contributions to the organization, adding that he will help during the transition phase and will continue to play a role in key projects, including the MobiTV/TiVo project on behalf of NCTC members. 

In a statement, ACA Connects CEO Matt Polka welcomed Borrelli and looked forward to the organizations' continued collaborative partnership.

“I look forward to working with Lou, and I am positive ACAC and NCTC will quickly come to appreciate his vast knowledge of our sector and his creative approaches to solving the tough problems that inevitably lie ahead," Polka said in the statement. "Welcome aboard, Lou. We can’t wait to begin our important work together!"

Rich Fickle joined the National Cable Television Cooperative in 2011 amid what was a trying time for the small cable operator buying collective.  After its former CEO left, there was a growing sentiment among smaller operators in the membership that their needs weren’t being met, and that larger players were dominating what had been started in 1984 as a way for small companies to band together, share ideas and buy equipment and programming with a single voice. It took some time, but Fickle and his team managed to turn the NCTC around and refocus the operation toward its original mission. Now after 10 years, Fickle told the NCTC board that he will step down before the end of the year, ending one chapter in his 40-year cable career, and perhaps opening a door to the next. Fickle spoke with senior content producer -- finance Mike Farrell about his legacy and plans for the future. An edited transcript follows. 

MCN: What brought this decision about?

Rich Fickle: It’s the longest job I think I’ve had, ever. I’ve worked for affiliated companies doing different things every three or four years, but I think this has been the same job  for 10 years. I guess maybe part of the answer is I always enjoyed tackling new things and changing the scenery a little bit to keep growing myself. But the other side of it is I think it’s healthy for this organization to also bring in a fresh perspective. As you get a little bit older you want to give a little bit of a different allocation of time for work versus other things. I felt like I was less willing to put in the 60-70 hours a week for certain things than probably should be in this role. So I said, ‘I need more flexibility and time.’ 

I’m still hoping to stay engaged in some way with the industry, but that’s a marketplace kind of opportunity. If it doesn’t happen, I’m OK with that too. 

Is this a retirement for you?

RF: I don't think it will be. It could be? It’s kind of like you’re going through a door and you really have very little idea of what’s on the other side of it. I committed to staying engaged through the end of the year. The reality is I think they’ll find a replacement within a few months. And then I’ll be helpful to that person for some period of time -- maybe a couple of months -- and then just kind of be available for the rest of the year.

It’s sound like this is something you’ve been thinking about for awhile.

RF: There wasn’t any disruptive, conflicting or change-of-life condition. I think it’s just my DNA. I kind of want to not do the same thing in one place forever. I value the learning and challenges of new environments and various things to put effort into. I think I’m happier doing that. Some people are happier knowing what they are going to do every day, and it’s very predictable. I’m just not one of the ones to do that. 

When you joined 10 years ago, NCTC was in a little bit of turmoil and there were questions concerning which direction it would take. But you seemed to bring a sense of stability pretty quickly to the organization. 

RF: I don’t know if I can opine on what I did as opposed to what a lot of others contributed. Let me answer it this way: I would say, yes, 10 years ago there were some distinctive challenges. There was a board that wasn’t as unified as it is today. You had members on the board that contained representations from some very large MSOs and some very small MSOs. And there seemed to be a lack of unity because they have some different views, are from different worlds that are pretty dramatic. You want some of that, but you have to have a balance there. That was one issue. I think the other part of it was there were certain parts of engagements with the other parts of the industry -- CableLabs or SCTE or even the other associations like those that represent the telco or fiber based providers -- that felt alienated in their relationship with the NCTC. I can't go into the story of why that happened, but one of the things we tried to do was change that, because the industry has always been  stronger when people are working together.  

The other notable shift that we tried to incorporate fairly quickly, is that the members [and] organizations had to feel like they were not disenfranchised. Small ops felt like the NCTC may have changed allegiance to focus just on the large companies. We worked hard to try to rectify that. Some of that is just the perception, because there’s a void in communication that creates those impressions sometimes of not being important anymore. But there was some reality to it as well.

The membership was a little bit unsatisfied, or feeling like this is no longer the co-op they remember. There's those things that were almost immediate challenges. Financially, there was probably a different mindset around how to manage the balance sheet. A long time ago I was a CFO and it’s just kind of ingrained in me that if you have an organization, you’ve got to  have to have a bit of staying power for opportunities and rainy days. So we had to do some work-throughs.

The plus is that the co-op was founded on a very solid foundation of a true cooperative spirit with entrepreneurial  independent companies wanting to collaborate and an employee base that had a really clear mission about trying to help small and medium sized operators really be successful. And that mission is very well ingrained and people love getting up in the morning feeling like they contributed something meaningful. Those types of things, the member mission, the spirit of the co-op, the entrepreneurial mindset, was so strong that it helped us make changes relatively quickly because there was that common ground. It’s been a good team that contributed that. We’ve had fantastic board members. We have 14-to-15 of them at any given time, so it’s a large board. But after that first year, we had a board that was much more unified. That creates a whole different dynamic because you can become so distracted by governance that is in conflict that it ripples through everything you do. I feel for the last nine years we’ve had a really, really good, supportive board. 

And we’ve had a lot of fun too. We decided to step up our game on the shows and open it up more; it was very limited attendance. We opened up the checkbook to bring in more talent, more events, because having people being able to enjoy each other's company and collaborate and build relationships is hard to measure but it’s foundational. I think it paid off. We all enjoyed that capability. COVID has kind of iced a lot of that for the more recent events, but we do want to go back to it. 

Let’s talk about the Independent Show. It seemed you were stepping things up when everyone else was stepping back.

RF: If you look at it from the larger cable operator perspective, their support of shows [and] things like that was huge dollars. They had to question themselves, the rationale for that investment, as they consolidated and grew bigger. But the NCTC group of companies hasn’t really changed that much. I think when I first joined there were roughly 700 companies, today we’re just north of that. Given the change of the last 10 years and we’re dealing with roughly 700 companies, that’s pretty amazing. We’ve had consolidation, we just keep adding new companies into the mix. There’s always been this fragmentation problem that we help solve by providing venues to help suppliers and other interested parties to work together.

The other change is the programming world has changed dramatically. The large programmers have consolidated, they have less of a need to attend shows, they’ve cut back on their affiliate staffs, but they still see value in attending, participating and supporting, which is great. The other thing we did is we expanded the scope of our supplier community to include a lot more technology partners. The size of that group of companies and the size of dollars flowing through the NCTC, I’m pretty sure, has doubled. We emphasized more of that in the last few years, and it’s growing at a very fast rate. 

As we shift more and more resources into broadband, we are not abandoning video and programming, in fact we’re growing there, but we made an intentional effort several years ago to be more tech friendly. Because a lot of the solutions that the large guys were getting behind from an R&D perspective were great for them, but it doesn’t work well for smaller markets. 

There's a divergence too. A lot of our companies come from different backgrounds. They  may be telco-centric, they may be municipalities, they may be new entrants coming from a whole different world based on fiber. But all of them have kind of taken a fresher perspective. They are early adopters of next generation network technology like fiber to the home, much more than some of the large guys that have had such huge investments in coax and DOCSIS technology. Fiber growth has fueled a lot of companies entering the business, because fiber is so powerful with broadband. Broadband seems to be a natural companion with video. Broadband is kind of the lead horse, but programming with video content is essential to customer relationships, especially in Tier 2 or Tier 3 markets. They kind of go hand in hand. We expanded and will continue to expand heavily in supporting the broadband side of that.

In the last few years, there has been an effort by the NCTC to help smaller operators that wanted to make the transition to broadband-only or at least broadband-mostly, more smoothly.

RF: You’re right, there are operators that want to transition to fiber. That’s interesting and a problem for a lot of these guys. A lot of the major fibercom providers didn’t know how to talk to cable operators, they were used to dealing with telcos maybe more than cable operators. We merged those worlds, or at least tried to help do that. So today we have five large providers of fiber technology and materials that we have done fairly good sized stocking deals with, because we know that area is exploding. We have a lot of capacity to serve members with that supply chain. We have three com deals with major providers of that technology, maybe have a fourth soon. And then we’ve done a lot on the DOCSIS modem side as well. That’s been there for a long time, but we also shifted more toward IP video support, we launched a key partnership with Plume around managed WiFi for the home, we’re going to do more of those types of things for the home network. We’ve got a circuit program now where we have multiple national carriers that supply circuits to our members. It’s a natural point of help for  members because we can aggregate those opportunities across the entire U.S. for them to have connectivity with different carriers and hopefully better terms. That program kicked off about a year and a half ago and it’s going well too. 

There’s more to come. Who knows what a successor will do, but we’ve got a road map of probably a half a dozen items that if we could do them today, we’d do them. There’s only so much time we have to work on things. But there’s a rich set of additional things we can do to help members, especially on broadband.

You’re also helping members with retransmission consent negotiations.

RF: I’m glad you brought that up, because programming and video is still pretty darn important. And if you look at the numbers we’ve actually been growing every year. How much programming we transact, on the retrans side specifically, we started with retrans deals that were tied to large cable network agreements. I think it was either ESPN or NBC that was the first because they had O&O retrans capabilities, that was probably five years ago. Just over three years ago, we did a handful of station group deals. We jumped into that pool. Then in this last round, we more than doubled that. Now retrans is a significant part of our portfolio of programming deals that we work on. These are tough. It probably is one of the biggest pain points for our membership base because of the cost of retrans and a lot of changes with programming content and station group consolidation. But it’s been very successful over the last two major renewal cycles to increase our presence on the retrans side. I suspect we will continue to do that. And I hope the station groups will see value in that too because we’re able to hopefully make it more sufficient for them to reach a large number of operators across the country.  

Even on the general programming side, last year we did 36 deals, some are renewals some are brand new, we still support entirely new networks. When I first joined the NCTC, we were lucky to get four deals a year done.  And we haven’t changed the size of the team that manages the programming side. [EVP of Programming] Judy Meyka came on a year or so after I came on. She’s done an incredible job of doing a lot of those transactions, she’s very effective, she’s built a good team. It’s really quite rewarding to see how much productivity we have on that side of the business.

One of the criticisms of the NCTC before you got there was that larger members could pick and choose which deals they did on their own and with the co-op, which some members saw as limiting your negotiating leverage. How did you change that dynamic?

RF: The way that structure worked created several problems, where larger members could almost sit at the table and see where the NCTC was going with certain deals and make decisions on whether they would pursue their own deal at the eleventh hour and even before that. That creates this uncertainty, not only for our membership and our negotiations, but think about it from the programmers’ side. The programmers were upset because they felt like ‘I have to negotiate twice with this large company, give them the benefit of seeing things coming through the NCTC and then that allows them to be more informed on their negotiation strategy.’ They felt like it was unfair. I actually agreed with them. 

It’s an imperfect world because you always have to provide choice to any member to do their own thing, and we still do that today. But we now have  structures in place that say, ‘If you want us to negotiate on your behalf, we can be effective if you commit to us today that that’s what you want to do.’ If you don’t want to commit to do that, that ‘s fine. Do your own thing, no hard feelings. But we didn’t have that before. 

So now we’re asking on major deals for members to be able to commit that they’re going to allow the NCTC to go through the negotiations. They’ll be a part of it, they’re not going to disrupt it, they’ll be supportive of it. And that has created a much, much more trusted process for both our side of the table as well as the content providers. And, yeah, there was a little bit of resistance or hesitancy to do that for various reasons, but it’s worked out.  

Do we still have large companies that still want to do their own thing for certain types of agreements? Yeah, but that’s OK. We’ve actually had more of our larger members rejoin some of our larger deals than we have the other direction where they exited on renewals. Our net track record is a positive in terms of large operators being involved in major programming deals.

We have to prove ourselves. We have to deliver value. We’ve never taken the approach that if you’re a member, you have to sign this secret oath that you’re going to do everything through the co-op. We feel like we have to earn it. If members don’t see the value in the short term and the long term of supporting that structure, then they probably shouldn’t be members. There are always situations where it does make sense for operators to consider doing a little something different for themselves. And that’s fine. 

With retrans and regular cable networks, you can go as a united front and say you represent however many millions of subscribers you represent -- at one point it was over 25 million.

RF: That depends on how you do the accounting on some of that, but that was when we had some very large MSOs involved. I always look at the level of participation as opposed to the theoretical level, how many subs are actually participating. I don’t think we ever had that number exactly from that definition. You had that number from the aggregate number of companies that signed a membership agreement. 

Can you say how many you represent now?

RF: I would say in general our larger deals probably hover anywhere from six to 10 million, which is still pretty notable in the world of consolidated companies and so forth. It could be a little less on certain deals, but that’s the general idea. 

Is it different when you’re dealing with retrans? Or do you just do national O&O deals?

RF: No, we’re doing the station group stuff. So you can think about large station groups like Sinclair and others. I think we make more sense for both sides if it's a large station group as opposed to one that only has a few stations and only affects a  few members. I think we are very focused on trying to help large station groups and large groups of  members that are part of that.      

We started off with the O&O stuff five years ago, a little bit over three years ago we did our first set of station group deals. This last round at the end of 2020, we essentially doubled the size of the station group deals.

Are you expecting that to grow?

RF: Yes. I think it’s been successful. It’s painful because they are hard deals. I think that most members see value in us helping them with that. And I think the stations see value in that efficiency as well. 

In 2017, you reached a deal for members with Mobi TV, which is going through a Chapter 11 restructuring, but it looks for now that the relationship will continue.

RF: Mobi has done a fabulous job for a lot of our member companies and it’s been embraced in a fairly quick way. Yes, Mobi is dealing with some financial issues. There are a lot of reasons for why that happened, but one of the most easily understandable ones is that they were counting on fairly high growth on their platform last year. They had been in the market long enough that a number of cable operators had been launched and the pattern for  operators to step on the gas and convert legacy video systems to Mobi seemed to be in alignment. So 2020 was supposed to be the growth year. 

COVID hit and cable operators found it very challenging to do anything that involved getting into the consumer home to switch out video systems. You combine that with the fact that the demand for broadband went through the roof in most of these markets, so operators had to reshift the resources to focus on that broadband growth and network reliability. Mobi, unfortunately, became impacted by that negatively. The growth just didn't happen. 

The good news is I think these operators are back in the saddle, trying to move forward to reignite their growth on Mobi deployments. But Mobi first has got to get through this financial restructuring and/or sales process. Chapter 11 activities are somewhat opaque. They’ve got a relatively short time to work through this and we’re very supportive of them and glad to help Mobi and/or other companies that are willing to help Mobi through investment. We’re super-supportive of them. I think our members have felt like they’ve done an excellent job. So we’re engaged, there are some areas I can’t talk about because of NDA stuff, but I can say that Mobi has been a super service and it’s been great for small operators and some of our large members as well.

Looking forward to the rest of this year, is there anything you want to do or accomplish before you hang it up?

RF: There are probably a lot of things I want to do but I probably will not get to do. Time seems to be slipping away faster than I thought. I guess it comes down to do the best I can to help the new CEO. If there are projects or things I can do to help them with after that, somewhere in that ecosystem, I’m glad to do it, but I feel like I’m probably more limited in terms of the impact I can have for the rest of the year, other than just making sure that we’ve got a really good direction set with the new person being there at the NCTC. 

Will you help with the search?

RF: We retained a search firm, Carlsen Resources, one of the best in the business. [They’ve] been working on it for a while now and I think have surfaced some good candidates.

Do you think you’ll have a candidate soon?

RF: I think so. I think the plan is to have somebody hired and in place maybe within the next six-to-eight weeks. Maybe it takes longer. Maybe it might be June before they actually can take all of the reins, but it is in that time frame. 

Is there anything you're most proud of during your time at NCTC, and is there anything you wish you could have done while you were there, but couldn’t? 

RF: Proud, in my book, it’s a team thing. I guess the pride is from the standpoint that member companies, in many cases suppliers, and our staff rallied to address challenges and also to seize opportunities. When I first started in the cable industry a long time ago, that was the norm. But as the industry evolved and large companies emerged, the cooperation with the industry was diluted. Larger companies had a mindset of their own R&D, their own capabilities, less willing to share. The experience at the NCTC, which I think we helped contribute more to in terms of building up that level of cooperation, is wonderful to see. Because it’s kind of the way I started my career in the industry and probably the way I'll be ending my career in the industry, which is seeing an uncommonly high level of cooperation for the common good of building a better business. How many times can you see opportunities like that? I feel very grateful.

On the wishful side, we have 700 companies and there are all types of ownership structures. Some are public but a lot of these companies are also third- or fourth-generation family-owned companies. The richness of the ownership and the people who lead those companies is amazing. My biggest regret is somehow I never seemed to make enough time to have developed more of those relationships in depth, because these people are amazing, 

If I had somehow a chance to do it over, I would try to figure out ways to shift time to be more with those folks. Just a personal thing, they’re just amazing people.  To hear the stories of all the challenges they had and running these companies successfully for years and years and years. 

Is that your advice for the next person that comes in?

RF: Yes. I regret not doing more of it. I think I did OK at it, but regret not doing more. I think it’s a foundational element of trust that is essential for a cooperative to be successful. People have to get to know you. And I think it's enriching in both directions.    

National Cable Television Cooperative CEO Rich Fickle will step down from that position at the end of the year, after a decade leading the small operator buying consortium.

Fickle joined NCTC in 2011 after spending 10 years at Ascent Communications. Fickle, who has more than 40 years experience in the cable industry, was only the third CEO in the organization’s history, succeeding former Adelphia Communications executive Jeff Abbas and NCTC founder Mike Pandzik.

In a memo to NCTC members Monday, Fickle said the time was right for new blood at the organization. 

“After an incredible 10 years as CEO of the NCTC, I have made the tough decision that it is time to step aside and allow for [a] new CEO to step in who can continue to bring fresh ideas and leadership at the NCTC,” Fickle said in the memo, which according to sources went out several weeks ago. “NCTC is in a great place coming off several successful years and is poised to do even more for you all in future years.

“NCTC is in a strong financial condition, we successfully continue to expand the number of programming agreements managed for members and have established a strong foundation in broadband and technology purchasing services,” Fickle continued. “The team remains dedicated to helping members as both challenges and opportunities emerge.”

The NCTC was founded in 1984 by Pandzik, and serves as a buying cooperative for more than 700 small and medium sized cable companies across the country for everything from technical equipment to programming. The organization also holds one of the last remaining nationwide cable shows, The Independent Show. 

Under Fickle’s leadership, NCTC has forged deals with virtual MVPDs like fuboTV and entered into a deal with Mobi TV in 2017 for an IPTV service for its members as they shifted their focus to broadband. Mobi TV filed for Chapter 11 bankruptcy protection earlier this month. NCTC also has begun negotiating retransmission consent deals for its membership after the Federal Communications Commission ruled last year the buying group would have the same good faith protections as individual MVPDs. 

NCTC said a search for a replacement is underway and has hired executive search firm Carlsen Resources. 

“A true partner, friend and visionary executive, Rich led the NCTC over the past decade to extraordinary new heights during a time of disruptive innovation that shows no signs of abating," said ACA Connects President Matt Polka, whose small and midsized members relied on the collective clout of NCTC. “Because of Rich’s skill, commitment and thought leadership, NCTC has flourished, and our two organizations have never been closer. We have made tremendous strides, and we are in position to make even more progress in the future for the benefit of our members as they compete in the dynamic video and broadband marketplaces and in the Washington, D.C., policy arena.... I know I speak for the entire ACA Connects team in saying that our relationship with Rich was incredibly rewarding."

CHICAGO — The Independent Show — which kicks off today (July 29) in Chicago — is shifting with the changing cable sands this year, offering members more marketing, workforce and e-commerce sessions in line with the industry-wide transition toward broadband and IP services. National Cable Television Cooperative CEO Rich Fickle spoke with Multichannel News about the show and and other issues affecting small cable operators. An edited transcript follows.

MCN: What’s different about the show this year? What should operators be looking for?

Rich Fickle: If you looked at the show content three years ago or four years ago, it was probably 80% video-driven. Now you’re seeing a broader mix, more broadband and some other areas relating to the management of companies. So, for example, this will have a focus on three panels regarding workforce hiring. Next generation — there are a lot of family-run companies, so there are a lot of special circumstances associated with that. It’s really an interesting time, in terms of how do you find a workforce that can adapt and operate in a much more software-driven world, given the mix of services? That’s one critical theme.

The folks in our group and ACA [Connects] on the legal side put together a pretty good program that is attracting some of the top legal executives from across the membership. That’s a first for us.

There is much more of a focus on marketing. As some of these services start to look alike across the competitive landscape and there is more competition, how do you differentiate yourself as a smaller operator? Where do you stand in terms of your brand, and what are the best practices that you can learn from others to compete with sometimes larger companies?

MCN: How different is it marketing broadband, apps and IP services than the traditional bundle, which mainly was sold on a price-comparison basis?

RF: Operators used to have a common, triple, double, sometimes quadruple play, and everyone was organized the same way and it was a call-center sales process. Today, I think it’s much more of an e-commerce play — allowing customers to find you easily, make their selections online and, in some cases, fill their requests online and even from the comfort of their remotes at home. That’s a different paradigm.

MCN: I see that you’re doing a General Session with Viacom. Is that a first for you guys?

RF: It is. We recently completed a renewal with Viacom and I think the terms are good, they’re attractive to a lot of our members. It doesn’t mean you won’t see some members think long and hard about the renewals, just because of the way that pressures are with the cost of video. We thought it was appropriate, given that we were able to reach a positive agreement with Viacom, to have their executives spend some time talking about what’s going on with that company, and a little bit about the deal structure and where they’re going. I would give kudos to [Viacom CEO Bob] Bakish and his team in their efforts to revitalize those relationships across the industry, ours included.

You’ll see another similar approach on the technology side. We invited some senior executives from a couple of the large suppliers to talk about their businesses and the challenges they have, given things like competition on a global basis, tariffs and shrinking R&D budgets. We thought we would let these executives help us understand what’s important to them, what the challenges are and how we can work together more collaboratively.

MCN: There are some breakout sessions on topics like HR. Is that becoming increasingly important to your membership as technology advances?

RF: It is. In some ways it’s kind of an aging workforce, and the question is, how do you recruit and attract that next generation? The old way I grew up in cable, you had technicians that were at the top of the food chain in terms of being able to solve problems and turn things around. Now a lot of the tech skills are embedded in support systems, alarming, alerts and diagnostics. [Call-center reps are] no longer customer-service reps. They’re really technical support people now, with tools that are far different than what we had five years ago.

MCN: What can members do for fun at the show?

RF: We’ve got an afternoon out at Wrigley Field, giving members and their families the chance to run out on the field, run the bases, throw pitches, hear from the Cubs management and a few players. I think it will be a tremendously popular event and it’s being done in partnership with Sinclair, which struck a relationship with the Cubs [forming RSN Marquee Sports Network]. … We’re grateful to Sinclair, to have them participate in a big way, and once again it’s a sign of the different approach to how we’re adapting to the challenges in the industry.  

After addressing the political, strategic and competitive issues of his constituency at the Independent Show, NCTC president and CEO Rich Fickle was back in his Denver office Wednesday, ready to talk tech.

For starters, the National Cable Television Cooperative, which represents around 850 small, independent cable operators across the U.S., is still working on developing a unified streaming solution that will let its members deliver video in the advanced, multiscreen way their consumers now expect, without deploying expensive next-generation set-tops.

Like everyone else in the cable industry, NCTC companies are also trying to find ways to compete with emerging 5G competition and participate in the wireless future. Fickle said the co-op can help its members with everything from small cell deployment to potential MVNO deals. Meanwhile, the technology vendors serving NCTC member companies face global shortages of crucial electronic parts — a problem being exacerbated by a burgeoning tariff war.

MobiTV Gains Traction

High on Fickle’s priority list is establishing a unified recommendation for NCTC members for video streaming — one that allows members to inexpensively provide apps to subscribers, in lieu of set-tops, letting customers use their MVPD service on Roku or Apple TV boxes, smartphones or any other over-the-top device they choose.

And at the Independent Show, MobiTV announced that more than 50 NCTC member cable operators had signed up to license its MobiTV Connect streaming solution.

The deal, Fickle said, was the culmination of a trial involving more than 20 app-based video solution vendors, including TiVo, all vying for the NCTC’s endorsement.

“It took us about four months to go through the RFI process and have discussions with everyone,” he said. “We’re still talking to a couple of companies who we’re close to and who we feel like have good solutions.”

The goal “was to reduce member costs by eliminating the need for expensive set-tops, and to bring features that are competitive in the marketplace,” Fickle said. “With an app-based [streaming] solution, it’s easy to integrate over-the-top solutions [like Netflix and Hulu]. And overall, a broadband provider becomes more relevant to the consumer looking for content from traditional TV and OTT providers.”

Fickle conceded that the selection of MobiTV’s platform “was a bit of a surprise,” given the level of dominance rival TiVo has enjoyed in serving tier 2 and 3 operators with streaming solutions.

MobiTV, he said, “has really advanced features like a network DVR, integration across all popular CE devices and relatively flexible terms compared to what the industry has seen before. I think they’re on a really good growth path. They now have 60 members under contract and probably 40 or 50 more in the queue. They’re serving 1 million broadband homes now, and that will be 2 million next year.”

Prepping for a 5G World

While the video business continues to undergo tremendous change, “the core business for our members now is broadband,” Fickle said. “The NCTC is going to be more engaged with broadband initiatives going forward. That will become more apparent in the next few months.”

These initiatives will center around “developing technologies, arranging network transport, and bringing in partners for commercial services,” he said.

Only hours earlier, Verizon Wireless had announced an expansion of its fixed 5G wireless launch to Indianapolis. And AT&T and T-Mobile are readying similar fixed 5G services. Addressing the competitive urgency for small cable operators presented by the emergence of 5G is a key challenge for the NCTC. But Fickle said NCTC members should approach 5G from the perspective of participation.

Wireless companies, Fickle said, “have a long way to go to make 5G a true competitor to cable broadband. And if we’ve done our homework, some of those wireless capabilities are going to be good for cable operators. I think it’s kind of an interesting future.”

On the wireless side, Fickle said the NCTC has “30 to 40 companies engaged on some level on fixed wireless. There are many different flavors to it, but there’s definitely momentum there.”

And beyond watching what the big operators are doing with wireless technologies like Citizens Broadband Radio Service (CBRS), the NCTC is also carefully observing their consumer mobile plays.

“There are a lot of things to think through before we do an MVNO play at the NCTC level,” Fickle said. “From the back office to managing devices at retail, it’s a complicated beast. Right now, we’re closely studying what Comcast and Charter are doing on the MVNO front. We’re just exploring it at this point.”

Shortages, Tariffs Hit Vendors

While Fickle and his team address long-term technology challenges like video streaming and 5G wireless, there are also immediate concerns.

In June, for example, Arris sent out a note to its customers, advising them on potential delays on products including modems and gateways because of a global shortage of multilayer ceramic capacitors (MLCCs) — a crucial component for a wide range of electronic devices. NCTC put the memorandum in its monthly newsletter, advising members, “Order delays and price increases can be significant, so place your blanket orders as soon as you possibly can.”

Speaking to Multichannel News, though, Fickle described the capacitor issue as somewhat contained.

“Most of the other vendors are kind of absorbing [the shortage] and adapting around it,” he said. “Probably the bigger issue we’re seeing is the tariffs. Things like fittings, cable and other components that are manufactured in Asia could be hit particularly hard.”

San Antonio, Texas — Over the past few decades one of the worst insults you could hurl at a cable operator was that it sold nothing but a “dumb pipe,” a conduit through which vastly smarter content flowed to increasingly sophisticated hardware.

But today, as broadband has become the business of choice for large and small operators — every publicly traded cable operator has more high-speed data customers than video customers — being a dumb pipe, it seems, isn’t so bad after all.

“The trends in pay TV have been absolutely horrible,” New Street Research managing director Jonathan Chaplin said at the National Cable Television Cooperative’s Winter Educational Conference here. “We’ve seen traditional linear pay TV subscribers falling off a cliff over the course of the last few years at an accelerating rate, and we think this trend continues. We think the economics of pay TV for cable companies are marginal at best.”

Cash-Flow Benefits
He then pointed to Charter Communications and Comcast, which he estimated generate $15 and $24 per month per customer in free cash flow from video, respectively.

“When a household cuts the cord and goes broadband-only, the increase in broadband pricing more than offsets the loss in profitability from the video product,” Chaplin said.

NCTC president Rich Fickle said that while some of the co-op’s members have de-emphasized video, it will likely remain in the cable package for a while. “Video is going to be a part of the equation for a long time,” he said. “It’s an established business, customers like the fact that they’ve got a good local operator that they can trust. It’s going to erode slowly over time.”

And the more that base erodes, the more cable becomes a content conduit. According to Chaplin, that’s not such a bad thing. “There is nothing wrong with being a dumb pipe,” he said. “It’s a magnificent business if there are no other pipes and if everybody wants your pipe.”

That last part might seem like a key caveat, but cable has consistently come out on top in the ongoing broadband wars, accounting for more than 100% of high-speed data customer additions for more than a decade. It seems that barring some unforeseeable calamity — like widespread, reliable and affordable 5G wireless service from telcos — cable will indeed remain the broadband pipe of choice.

Preserving that leadership role will be crucial because Chaplin doesn’t see a lot of video growth for cable operators down the road. “The entire future value of cable is in broadband — 80% of EBITDA, 90% of the enterprise value of these companies over the next few years.”

Some operators have already taken the bold move to de-emphasize video all together. Cable One did it a few years ago, as broadband revenue finally exceeded video revenue for the first time in 2016 ($344.2 million vs. $294.8 million for video). And while the big MSOs still reap a big chunk of revenue from video, the gap is closing. Comcast, the largest cable operator in the country, reported video revenue of $21.5 billion in 2015 and broadband revenue of $12.5 billion. Last year that gap narrowed to $23.1 billion for video, and $14.8 billion for broadband.

Not Too Far to Travel
American Cable Association president and CEO Matt Polka said from that perspective, it isn’t a big leap to just providing access to apps or other content sources.

“What’s wrong with giving the consumer access to go wherever they want to go?” Polka said. “We’re trying to enable all of that, our members are trying to get that choice and control more to the consumer to the extent the content companies allow us to do it.”

Small operators seeking insight and information on competition, continued industry consolidation and the power of Internet-protocol video can seek it this month at the National Cable Television Cooperative’s Winter Education Conference. If for no other reason, it’s in New Orleans.

The NCTC said more than 270 members have already signed up for the Feb. 20-21 gathering (more than the number that attended last year’s meeting in Phoenix). More than 200 exhibitor representatives have signed on for about 80 booths and tables.

Advanced video platforms will be the focus of this year’s meeting, a topic on the minds of every small cable operator looking for a competitive advantage.

“The focus will be emphasizing how to compete in the new video world. There are several components to it, a blend of technology, marketing and market research,” NCTC CEO Rich Fickle told The Wire, adding the co-op is in the middle of finalizing an RFP with 16 different companies for IP and advanced video technologies.

Click through to the WEC agenda.

SITTING ON AN ANDROID

“We’re looking at systems that can be used without set-top boxes and, in some cases, they can sit on top of an Android TV set-top,” Fickle said. “The choices for how cable operators serve their customers have opened up quite a bit.”

The event will also feature industry experts from Leichtman Research, CableLabs and Parks Associates, among others, addressing topics including the evolution of the U.S. video market, leveraging IP video and the connected home. The conference also offers multiple networking opportunities and a Solutions Showcase exhibit hall featuring the latest suppliers and innovators, as well as product forum presentations.

Fickle pointed to the proliferation of digital MVPDs like Sling TV, DirecTV Now, Sony PlayStation Vue and YouTube Unplugged, adding that the NCTC will unveil some market research at the WEC that will offer more insight into how consumers look at apps and the services delivered through them.

Attendees can also gauge the regulatory climate in Washington, D.C., with a Monday, Feb. 20, discussion headed by America Cable Association CEO Matt Polka. Leichtman Research president and principal analyst Bruce Leichtman will offer a look at the state of the video and broadband industries, and panel discussions from top executives at Eagle Broadband, RCN, CenturyLink, CableLabs, Cable One, Parks Associates and Buckeye Broadband will provide insight into competitive and technology issues.

Pricing and packaging of services will also be discussed, especially as skinny bundles proliferate throughout the pay TV universe.

“We have several members who have been doing different flavors of that,” Fickle said, adding that there will be panels and research released at the conference around those strategies. “It’s all about how to compete and how to drive costs down but improve the customer experience. A lot of it is done through IP, which is a different approach than we have done in the past.”

TAKING IT EASIER

Fickle added that programming contracts, which had constrained smaller operators from offering skinnier bundles, are easing up.

“The deals we’ve done over the last few years with the programmers have changed the restrictions,” Fickle said. “It’s not what everybody wants, which is, you can package anything you want, but it’s pretty comparable to what the larger MVPDs can do.”

Consolidation, a big topic when Charter Communications was pursuing Time Warner Cable — it closed the deal in May — isn’t as high on the priority list for small operators today. While there are likely some deals left to be done, Fickle said the emphasis is on cooperation.

“There are efforts underway to find ways for smaller operators to either partner up with some of the larger companies or band together even tighter to replicate some of the same capabilities, working together as a cooperative group of entities,” Fickle said. “Some of that needs to happen. I don’t think it’s something to panic about. Probably in the next five years it needs to be pursued in earnest.”

Elsewhere...

Mr. Wheeler’s Tweets Offer Pointed Words

Former Federal Communications Commission chairman Tom Wheeler didn’t take long to signal he would be a vocal critic of the new Trump administration, both at the White House and at the agency.

After tweeting “Congratulations Chairman Pai” on Jan. 20 — when Wheeler exited the FCC — by Feb. 1 he was taking aim at Pai’s decision to take the set-top box rule out of circulation. Wheeler had kept it in front of the commissioners for a possible vote, though that was highly unlikely to come from either Pai or his fellow Republican, Michael O’Rielly, who both opposed the revamp.

Wheeler and Pai had what often appeared to be a rocky relationship, exhibiting at times a strained courtesy at meetings, sparring in Hill hearings, and clearly at loggerheads over key policy and process issues.

On Jan. 31, after Pai pulled the set-top revamp item (a Wheeler centerpiece), and the day Pai presided over his first public meeting, Wheeler’s tone shifted as he took aim at both Pai and the cable industry — the latter a familiar target.

“Removing set-top box rule victory for Cable-wood over consumers,” Wheeler tweeted (Hollywood studios joined ISPs in pushing back on the set-top item), adding: “$200 million Pai Tax on helpless cable subs. Trump helping little guy??”

The chairman’s office had no comment. The Wire’s comment: Ouch!

— John Eggerton

As cable operators of all shapes and sizes descend on the Walt Disney World resort in Orlando, Fla., this week for The Independent Show, the pay TV business is at a crossroads. Over-the-top services, changing viewing habits and the continued emergence of broadband as the dominant product are forcing small and large operators alike to rethink the pay TV business.

That transformation is occurring in the organizations that represent these businesses, too. The National Cable Television Cooperative, created decades ago as a buying group, is no different. While negotiating programming contracts will continue to be a big part of its mission, the NCTC is gradually shifting toward helping smaller operators cope with the ever-changing market.

Rich Fickle, president and CEO of the NCTC, spoke with Multichannel News senior finance editor Mike Farrell about those topics and others recently. An edited transcript follows.

MCN Independent Operators of the Year:WideOpenWest Covers Its Bases | Buckeye: Building on Broadband

MCN:What should NCTC members expect to get out of the Independent Show?

Rich Fickle: We always find that members get a lot out of hearing from other members. We started about a year ago diversifying some of the content, and we’ll have a good breakout session on company culture and customer service. But probably the bigger one is the whole IP-video space. You’ll see several exhibitors in that category, both platforms and OTT providers. That seems to be a key for the continuation of video.

If we can find ways and help these guys make that migration happen, to go from analog and [quadrature amplitude modulation] to IP, I think that’s really important. I think, we’re seeing some of the larger guys doing network DVR and more extensive on-demand offerings. The good news is that we’re finding ways to do that, too.

It’s probably unlikely programmers are going to stop raising rates, so they have got to embrace a different model. And our hope at the NCTC is that we can be a helping hand in providing options for them [small operators] in that new model.

The existing programming model is probably going south. [Operators] have to find other ways to keep customers happy with video.

MCN:What’s the alternative? OTT?

RF: OTT means a lot of different things to different people. One flavor of OTT is current programmers like premium-service providers like HBO. In an OTT world, maybe it’s the same programming relationship with the operator, but the OTT app for HBO offers well over 2,000 titles, compared to what you can get on VOD or a linear stream. The other application is niche content. Some of these guys are pretty well suited to fit some niches in an IP world that doesn’t take up full-time bandwidth.

Then, you’ve got bundled services like Sling TV and Sony [PlayStation] Vue. Hulu is trying to emerge as a vehicle for some of the large content groups. Some of those make sense to investigate. We’ll embrace other content sources and other forms of the same content but with a better experience for the consumer.

Related >Big Government vs. Smaller Ops: A Q&A With the ACA's Matt Polka

MCN:Is this like a build-your-own-skinny bundle offering with services like Hulu and Netflix, because the cable networks won’t let you do it?

RF: You’re kind of removing a barrier by adopting IP, removing the barrier of having the shelf space dominated by eight companies. Now, you can allow the consumer to have more choices. That’s what the business has always been about.

It’s hard to know who’s going to win the OTT contests, especially those that are recreating packages. But if you set it up right, you can let the market decide that. The cable operator takes on a role of providing the best choices he possibly can, the very best broadband network, the very best in-home WiFi experience and maybe an IP video set-top or apps. It could be an app business one day.

MCN:Apps are gaining traction with distributors across the board. I’ve heard people say one day that is how all services will be delivered — through apps, not set-tops.

RF: That’s right. You’ll hear at our show about a couple of members who will move that way next year. I think it’s probably too early for a broad number of companies to do that. But as usual, we have a couple of companies that are very entrepreneurial and they are going to move toward app-driven video delivery on Roku devices or Amazon Fire, and they’ll probably have that up and running this year.

MCN:Can you say who they are?

RF: I can’t. They want to make an announcement at the show. I don’t want to steal their thunder.

MCN:You recently launched VU-IT with Evolution, a new platform that includes a solution for back-office integration, OTT apps and enables IP-based linear and OTT services.

RF: There are two pieces to it. The initial impetus was to try to find a way to lower the cost structure of deploying TiVo for small and midsized operators. We’re also taking a more active role in some of the apps that show up on the TiVo box on behalf of those companies. There is a healthy pipeline of 15 or so companies either in the launch process or close to making that commitment and some already up and running.

In the process of doing that, we had to build out a back-office platform, we call it Bravo. We finished that and turned it up about a month ago. We’re finding that maybe there are some other opportunities for it. It is a way to facilitate back-office integration for mobile devices, OTT partnerships or some other things we’re working on. You’ll hear more about Bravo in the future.

MCN:That seems like a good example of how NCTC has evolved, you’re not just negotiating programming deals anymore.

RF: Our board told us about three or four months ago that the major programming renewals are still important, but maybe as important if not more important is finding ways to help members with these types of services, so we can create virtual scale if needed and bring the right partners or expertise to the table and help these guys move fast.

MCN:How are you going to do that?

RF: We have a list of about 10 projects. Some are a little further along than others. We have an IP VOD project that we are about to finish phase one on [with Evolution and its iVelocity unit]. There will be a couple of other phases to it and that will marry up with TiVo or a couple of other platforms. The idea is to provide a deep library of on-demand content with a very low cost structure and a good user experience. It’s all IP so it takes away the need for local markets to invest in VOD servers and that whole infrastructure. We treat it just like an OTT app so it can sit on mobile devices as well as set-tops.

That’s probably the most obvious. There are a halfdozen others, ranging from advanced advertising [to] network DVR.

The National Cable Television Cooperative (NCTC), a group that strikes programming and equipment deals for nearly 1,000 independent operators, has hired John Childress as vice president of product strategy and management.

Childress, who most recently worked in product development and management of residential services at WideOpenWest, enters a new role at the NCTC in which he’ll focus on developing new service solutions with supplier-partners and aid co-op members in providing more advanced capabilities. Childress is also late of BendBroadband (sold to TDS Telecom in 2014) and SBC Communications (now part of AT&T).

For more about NCTC’s strategy in this area, including its emphasis on over-the-top options and “alternative content models, please see this week’s Next TV interview with Rich Fickle (subscription required), the group’s CEO and president.

“There are substantial changes in the way video is being distributed, discovered and consumed,” Fickle said, in a statement. “At the same time, larger MVPDs are performing more new product development in-house to provide a differentiated advantage in the market. This means traditional industry suppliers are less able to bring new capabilities to the group of small to mid-sized operators. We saw a need to help supplier-partners be more effective in working with our large group of members, fostering innovation and scale. The good news is, many of our members are very entrepreneurial and can move quickly. We are hoping to combine that strength with an ability to attract partners with potential for requisite scale.”

“The NCTC is a mix of proven companies with great ideas and an adaptable spirit,” Childress added. “I am thrilled to be working in an environment where we can help create value for the members quickly.”

Childress received an MBA from Saint Mary’s College of California and received his undergraduate degree in Business Administration from the University of San Diego. He will work out of Denver.

When Comcast walked away from its proposed acquisition of Time Warner Cable, we surmised that it would clear the way for Comcast to amp up its efforts around licensing X1, its cloud-based, IP-capable video platform, to other cable operators.

It has worked out that way to a degree, based on what we know so far.  Cox Communications is broadening its beta trial of X1 (what Cox is calling “Contour 2”) in San Diego as it continues to noodle plans for a “future state” video project, and Shaw Communications will also test X1 after scuttling its original IP video transition initiative.

And it’s likely that Comcast has many other licensing talks underway as it looks to build more scale for X1 and try to recoup some of the costs that went into creating and deploying it. It won’t be surprising to see others dip their toes in the X1 waters as they mull where to go next.

But what about smaller independent operators, which, like their larger brethren, are struggling to come to grips with the changing dynamics of the pay TV business as programming costs rise, the cord-cutting trend expands, and more eyeballs drift to over-the-top options? They could use some help migrating to more economical IP video platforms that can deliver on multiple screens and bring OTT the mix, right?

It’s a challenge that’s high on the mind of Rich Fickle, the president and CEO of the National Cable Television Cooperative, which represents nearly U.S. 1,000 small- and mid-sized operators.

In an interview this week, he acknowledged that the NCTC has set a high priority on OTT and “alternative content models” for its members. You’ll get a chance to read all the details in the Next TV section in the September 21 issues of Multichannel News and Broadcasting & Cable.

But I also brought up X1, to see if that’s of interest to NCTC and its membership.

Fickle said that X1, while seeing it as one of the best things to come out of Comcast, is currently a “complex platform” that is generally better suited to large MVPDs than those served by the NCTC. So don’t expect the NCTC and Comcast to swing an X1-facing deal anytime soon.

“We have not yet seen a practical way to bring X1 to the small and mid-sized market,” Fickle said. “It doesn't mean it won't happen. But so far it looks like the focus has been around working with some very large MVPDs and working out the models associated with multi-tenancy."

But the NCTC is “more than happy to entertain those types of options,” he said.