CABL Forum - Re: My opinion is that...

Magi,
You are right on the money with most of this. The corporate office will dictate head count to the system/region which will require operating at the bare, required staff only, i.e., customer service, demand/preventative maintenance, etc. The MSO is not going to pay for a construction staff to sit on snowy days like I am today.
Subsequently, the system/region will rely on competent, trustworthy contractors to perform maintenance span replacements and new build. The key for those of us wishing to remain in the business without being a large prime is to get a license, maintain a relationship with the system and DO GOOD WORK. Follow that formula and you'll be OK.
Paper contractors will continue to exist as long as there are large projects and that's OK with me. Lord knows they have gotten me through some hard times. As far the rates that are offered after its been stepped on by several subs, look at the money. If you cannot make it on what's being offered, take a pass.

> ...something is very definitely broken in the world of cable television. How hard can it actually be to lose money as a virtual monopoly? But, somehow, many of the major MSOs seem to be doing just that. What is worse is the troubling number of formerly loyal subscribers who are exiting in droves for other alternatives. On that subject we keep talking about the competition from the various dish concerns but I have yet to read a posting on this bar about the equipment which Next Level has been regularly delivering to local phone companies so that they can offer full service (and yes, that includes video with comparable programming) competitive offerings to their TRULY loyal customers. Why do you think that Motorola is actively trying to purchase the remaining 26% that they do not already own? For all of you investors out there that was a great buy over the past month at significantly less than a buck! Per your request I shall reiterate my formerly posted opinion about where I think cable will have to go to remain competitive in the near term:
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> Although the government may pressure the MSOs through a few headline garnering investigations and other lines of inquiry, it will most likely be the MSOs themselves who opt to switch over to an employee based contract system on their own. Part of the reason will be their desire to begin the natural scaling back of upgrade and other project personnel now that most of the plant is upgraded. The question has always been what to do with these folks when the work was done. Two notable stopgap failures toward this dilemma were A.T. & T.'s selection of G.I. to oversee projects and Charter's slightly less dismal experience with SA. The theory was that, since it was all contracted out, then no downsizing would have to eventually occur within the MSO itself and the project based in-house employees could be integrated back into the operational side of the individual systems. The problem, as it always seems to be, was who got picked to be in charge and what political connections they utilized to remain regardless of how poorly qualified that they ultimately were. Despite the misapplication of this strategy it was truly intended to benefit in-house employees. But today, with ever mounting pressure from stockholders, long term debt holders and other creditors, accelerating the pace of these phase-outs (such as Charter is apparently VERY close to announcing with company wide layoffs) and actually going beyond the capital project level and slicing into the operations side is a tempting bone to toss to the financial wolves. But the problem will remain as to how to complete the remaining capital projects and other initiatives, not to mention running the day-to-day business and growing the subscriber base. A very likely solution will be the selection of full service contracting outfits that can basically handle just about any part of the operation, short of formal Customer Service. A small in-house staff will coordinate their efforts, assign workloads and projects, QC the finished project, and then authorize outside marketing and installation companies to acquire and retain new and existing subscribers. The actual number of in-house employees per paying subscriber (which is how we are now starting to value a system for potential sale/trade purposes) will be reduced and the volume of services contracted out should theoretically be proportional to the results desired, and hopefully achieved. The standards demanded and required from these contracting outfits will, of pure necessity, have to be significantly higher than what is being delivered today. I specifically do not mean that the individual and group efforts of both contract and in-house folks of today, and years past, are and were not often exceptional. Rather, what I am referring to is that the sum total of ALL efforts must be consistently to standard and expectation. How many times in your own personal experience did you work on a job where really good people did really good work and worked very hard, only to have the initiative ultimately fall short (or get shut down) because one or more members of the various groups which SHOULD have been working toward a common goal simply did not? What good is an 87% completed upgrade that does not handle the new services, and associated revenue, which were supposed to accompany the project. If you look at the model of the various RBOCs utility type contractors they are almost entirely long-term employee based, often local or regional, with a formal Human Relations, Accounting, Administrative, Construction, Service, Installation and occasionally a Sales/Marketing Department. To successfully build and maintain this structure they need to operate under a reasonable assurance that steady work will be forthcoming. And to maintain their market share of the workload they will have to understand and accept the vital importance of delivering consistent quality. They will also need to be paid a fair price and will have to share it, often along with some other employee benefits, with their staff. To be effective the entire state or region will utilize the services of this and several other area contractors, with little or no favoritism being allowed on a system by system basis. More than likely the work will be performed on an hourly basis, although well-regulated and well-run piecework scenarios would still be theoretically possible. These companies cannot be large traditional cable television Primes by default because this historically has not been successful in a full service type mode. It is, however, possible for some larger and smaller cable contracting outfits that do possess the basic structure elements and expertise to make the conversion. I do not mean to sound heartless but it will be up to those system folks who remain, after musical chairs have been called, to work together with these full service type companies to make this work. The days of “give me the volume and I’ll take less…and then pay out less…to have someone else receive even less…so that you can look good again in this budget year” HAVE absolutely got to be over soon for cable to regain it’s grip in this fast evolving and very exciting marketplace.
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> Well, there you go. That was probably more than you wanted to hear but what the hell since I was in the mood to wax eloquent tonight anyway. I hope that this helps and that you have a safe and productive year!
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> > I read your postings every chance I get. It's good to read info that makes sense. Do you think that in the near future the primes will be forced by the federal goverment to pay employees hourly wages or restructured so that the primes will have to be an employee based company rather than hire subs?????

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Re: My opinion is that...