An Open Letter to John Malone

Dear John:

I don’t think we’ve ever met, which is odd. For three years, we overlapped in college. For two decades, we competed in international communications -- you in cable television, me in satellites. For four years, we were neighbors in Maine. (Granted, everybody was your neighbor in Maine. During my time there, you became the largest landowner in the history of the state.) For much of a decade, I commuted to Denver, representing our ownership group with the Nuggets and then the Avalanche. You were an omnipresence in that market -- business, sports, media -- but, no, I never ran into you. (The closest I came was meeting your partner’s wife, Sharon Magness. Unlike you, she was hard to miss. She used to rev up the crowd at Broncos games by galloping up and down the field on a white stallion. A cable cowgirl, you might say.) I didn’t even get a chance to shake your hand at the dedication of the Daniel Malone Building, the state-of-the-art engineering center you endowed to honor your dad.

It wasn’t until I read your fine new memoir, Born to Be Wired, that I understood how I had managed to miss you by five minutes on each of those hundreds of occasions. You say in a throwaway passage that you are autistic. You can’t stand crowds. You find it an agony to schmooze a room full of strangers. You are comfortable only in the company of old friends.

You never use it as an excuse, your autism. Here and there, you even drop the implication that it has provided you with an advantage in business. It may have enabled you to focus with rare intensity on complex legal and financial documents. And it may have enabled you to connect, man to man, with the owners of the cable systems you sought to acquire. As you built out your company, Tele-Communications Inc. (TCI), you weren’t dealing with platoons of pinstriped smoothies from the big I-banks. You were dealing, one on one, with the rough, self-made men who had brought “community antenna” television to rural America. They were independent entrepreneurs, some of them even quirkier than you were, the kind of men who seal deals not with a notary public but with a binding handshake. And after you bought their companies, you came to think of them as your partners, and then as your fellow shareholders and, not long after that, as your old friends. (Some of those friendships may have been accelerated by your sale of TCI to AT&T for $48.3 billion. You made many of those “cable cowboys” tens, or even hundreds, of millions of dollars.) Maybe your autism helped you to keep your eyes on the prize.

I’m tempted to go further. You seem to have overvalued associates -- and envied rivals -- who could command the stage at industry events thronged by bibulous strangers. You paid out good compensation to executives who could nod thoughtfully as representatives spun baseless soundbites for the benefit of low-information voters back in the district. You paid top dollar for TCI representatives who could feign fascination with the blatherings of ideologically tendentious and technologically underinformed regulators, politicians, and puffed-up media types. You may even have added a Buffett-quality wrinkle to the operating manual for American business: You paid other people to attend meetings at which your presence was assumed to be required. (That was a real contribution to best practices, John.)

Your sale to AT&T may not have been the Deal of the Century. (That distinction would have gone, if you believed the press, to the AOL-Time Warner merger, which despite the hype was soon revealed to be the Dud of the Century.) But your deal represented a turning point in our national history. The “telephone company” had been a fixture in American life for more than a century. And for good reason. Mr. Bell’s invention was a miracle. It changed the world by changing millions of individual lives, one conversation -- one long-distance-but-still-intimate-conversation -- at a time.

Over the years, AT&T had monetized Mr. Bell’s miracle with impressive diligence. AT&T’s stock, safe and steady, became a core holding for widows and orphans. But the company sat royally on its success and neglected to reinvest in its own technology. For decades, AT&T relied solely on the fabled “twisted pair” of thin copper wires to connect its network. That was fine for voice communication, which needed little bandwidth and travelled at the speed of sound. But it came nowhere close to serving the ravenous appetites of today’s information consumers.

Enter TCI. At first, during the community-antenna phase of the industry’s development, your cable cowboys strung coaxial cable across rural towns to sharpen the TV pictures broadcast from New York’s big-three networks. That was an incremental upgrade, much appreciated by customers, but not really a game-changer. Then, boosting your networks with signal compression and hybrid fiber, TCI led the charge of the telecom rebels up one hill after another -- the Atlanta “superstation” (courtesy of your pal, Ted Turner), the 500-channel television menu, the magic of HDTV, the cornucopian Information Superhighway, and, ultimately, the ISP rollout. One of the more amazing things about your industry’s hype was that much of it turned out to be understated.

AT&T had offered a trickle of information transmitted at the speed of sound. That was perfect for a phone call, but not much else. TCI, the nation’s largest cable operator, was offering a torrent of information transmitted at the speed of light. Voice, video, alphanumeric data -- everything a hungry information consumer could possibly digest.

That was a win-win deal, John. You and the cowboys got the $48 billion, and the rest of us got the internet.

Yours gratefully,
Neal B. Freeman