The Line King

Comcast's bold bid for Disney shows how far it has come from stringing cable in your back yard

February 15, 2004|By Robert Little | Robert Little,SUN STAFF

Charlie Irwin was in over his head.

He and his three partners had done all the right things to break into the then-fledgling cable television business -- securing a license from Harford County, buying space on the telephone poles, hard-wiring the high-density areas of Aberdeen, Havre de Grace and Bel Air. But they soon realized that managing Multiview Cable Co. and its 9,000 customers in 1978 was beyond the abilities of a novice.

"You've got to remember, cable television was really in its infancy and not a lot of people knew much about it -- including us," said Irwin, now 86 and living in Bel Air. "It was just too much for us to handle."

The four Multiview executives decided to sell to two bright and smooth-talking gentlemen from Philadelphia, the bow-tied Ralph Roberts Sr. and his cautious partner, Daniel Aaron. As payment they accepted stock in the pair's company, a burgeoning cable enterprise that they had scarcely heard of: Comcast Corp.

Today, the company that inched into Baltimore's outer suburbs 26 years ago is by far the largest cable-TV provider in the nation and soon could dominate the media universe, too.

If its blindside offer valued at $66 billion to take over the Walt Disney Co. succeeds in coming months, Comcast will become the heir to such entertainment heavyweights as ABC, ESPN and the Disney studios, and will surpass Time Warner Inc. as the largest media conglomerate in the world.

The ascent might seem especially surprising to Baltimore-area television viewers, who were introduced to Comcast back when remote controls had cords, basic cable cost $8 a month and the band Dexy's Midnight Runners was rocketing to fame on MTV.

But the people who have negotiated with or studied the Philadelphia-based cable giant -- some of whom admire it, some of whom despise it, all of whom respect it -- say that spectacular growth was always the company's plan. And Comcast, run today by Roberts' 44-year-old son, Brian, might be among the few entertainment companies that is experienced enough and flexible enough to make it work.

"The people who were running it back then are still running it today," said Irwin, still a Comcast stockholder. "And I'll tell you, they're some real smart cookies."

Ralph Roberts often tells a story about the 1,700-subscriber cable system that he bought in Tupelo, Miss., in 1963, his first. He purchased the small system at Aaron's urging, using the proceeds from Pioneer Belt & Suspender, which he sold in 1961. He says people often ask whether he imagined his American Cable Systems -- the name was changed to Comcast in 1969 -- growing into the 21-million- subscriber behemoth it has become. He tells them: "Of course I did."

Even if the claim was bluster, Comcast's subsequent four decades suggest a company all but obsessed with growing larger and wider, and reaching into ever more living rooms. Partly by attracting subscribers, mostly by acquiring them from competitors -- and always with an almost ruthless political shrewdness, analysts say -- Comcast is regarded as a driving influence in the industry.

Baltimore offers a microcosm of the corporate history. After creeping into the outer suburbs in 1978, Comcast barreled toward the city in 1984 by taking over Caltec Cable in Baltimore County. In 1988 it bought Storer Cable in Howard County, and a decade later it acquired a stake in Jones Intercable Inc in Anne Arundel County. It conquered Baltimore, its last battle in the region, in 2001 when Comcast bought TCI Communications for $500 million. Carroll County, served by Adelphia Communications, is the region's last holdout.

Sensed potential

Comcast's first cable system existed solely to feed broadcast channels to far-flung households that couldn't receive them with antennas, but Comcast was also among the early companies to sense cable's potential to offer a multitudinous array of channels. As its system grew, so did its menu of channels.

The company was also among the first cable operators to acquire its own content, investing in networks such as the QVC shopping channel, Home Team Sports, the Golf Channel and E! Entertainment Television.

Company executives say they strive to introduce major new services or products to their customers at least once a year. They consider the company's Video-On-Demand, which allows viewers to select from a menu of programming at times of their choosing, to be the model of an interactive television that will change the industry.

Before last week, none of Comcast's moves prompted as much brow-raising as its $29 billion acquisition in 2002 of AT&T Broadband, a move that tripled the company's size and gave it claim to nearly a third of the nation's cable television wiring.

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