WITH THE SALE OF DELTA Cable to Persona Communications, a cable era continues to draw to a close.
The era, of course, is that of the independent, local cable operator. Delta is one of several to be sold (pending CRTC approval) in the past 12 months. Besides Delta, Persona recently purchased Northern Cablevision of Grande Prairie, Alta., and Shaw Cable has been on a bit of a buying spree lately, gobbling up small cablers like Pemberton Cable, Saltspring Cable, Whistler Cable and Norcom Telecommunications.
So, the shock of the Delta announcement (first reported by Cartt.ca here) wasn’t that John Thomas and his family decided to sell the cable company founded by his father Stan in the 1950s, it was the acquirer. John Thomas sits on the Shaw Communications board of directors and the Delta and Coast Cable systems are in the heart of Shaw territory.
Most of the folks I’ve talked to since the announcement were surprised the company went to Persona and not to Shaw. It was kind of a cable industry assumption Shaw would get Delta. After all, the late Charlie Keating was on the Shaw board and Shaw bought his Dartmouth-based systems in the late 1990s. As well, Monarch Cable’s owner, Bill Yuill, was also a long-time Shaw board member and the big western cableco bought his systems, based in Medicine Hat, too.
However, when a company the size of Shaw consumes a much smaller company, especially one in an area it already serves very well, like the Lower Mainland of B.C., the big company generally doesn’t need many of the smaller company’s employees. It’s not about hostility, just about economies of scale.
That factored big time into Thomas’ decision to go with Persona (which re-branded itself as The Amazing Persona earlier this year), a deal that began with a casual conversation at last year’s CCSA convention in Ontario. Persona has no base in British Columbia, so it needs the 100+ employees at Delta and Coast to run the 38,500 customer digital cable systems which also offers data and voice services.
"Everyone here is guaranteed their employment," Thomas told Cartt.ca earlier this month in an interview (an edited transcript of which begins below). Except him, of course, as the 60-year-old Thomas is retiring. More time with the family – especially his two grandkids – is on the calendar once the deal closes.
The other piece of the company Thomas says he’s pleased to see continue will be its original community programming. Delta won numerous programming awards over the years, frequently punching above its weight by beating much larger rivals for Canadian Cable Television Association Galaxi Awards. The company is known in its region for its local talent, popular community shows and even long-form documentaries.
To say the industry will miss John Thomas when he retires is an understatement. He started working at the company as a teenager and so he has over 40 years of experience in cable. He served on the boards of the CCTA and Canadian Cable Systems Alliance and CTAM Canada. His systems have been pioneers in data communications and Thomas was an early digital adopter. He sat on many other committees and panels which helped formulate policy and "best practices" for cable in Canada.
What follows is an edited transcript of a chat between Cartt.ca editor and publisher Greg O’Brien and Thomas (pictured) about 10 days after the sale of his company (closure will most likely happen before year’s-end) was finalized.
Greg O’Brien: Looking back on, on your career at Delta, I mean you started as a kid, working with your dad – what are some of your favorite moments I guess, or challenges that you faced?
John Thomas: Well I think you know, we’ve done some neat stuff over the years with our community programming… winning programmer of the year…
Some of the interesting stuff includes being denied access to the Cancom signals back in 1982.
GOB: Why was that?
JT: Well we had asked for a license for Pender Harbour – a remote area on the Sunshine Coast. We were able to get four or five signals off-air at the antenna site we established. We were waiting for Cancom to be licensed and as soon as the decision was released, there was the all-Canadian package that was available. We immediately applied – and we’d already installed our 12-foot dish — for CRTC authority to deliver the Canadian services that were available.
But after a very short period of time they came back with a denial. They were saying that Pender Harbor didn’t qualify because it was already well served with four or five channels. I couldn’t believe it, and I contacted our, our regional commissioner who said "sorry, I don’t believe what they did either."
We reapplied and then, not to be sounding like a blowhard or anything, but one of the lines I used in the reapplication was "God may have created the obstacles that preclude our customers in Pender Harbor from enjoying the same level of service that our customers in Sechelt Gibson enjoy and you, the Commission can effectively erase those obstacles and provide them with service." And we got a pretty quick decision.
We’ve also had some great successes with data communications over the years. In 1985 we started providing schools right here in Delta with data communications over a coaxial network, because there was no fiber then.
Basically the schools said, "we’re having such a terrible time with BCTel, we don’t have flexibility, they can’t give us what we want, there’s no speed…
GOB: You were one of the first cable companies in Canada or even North America to provide data service, right?
JT: I believe we were… I told our superintendent of schools back then that we could do this when I wasn’t really sure we can, and we were put in touch with Phasecom in Israel, who had 15 KHz modems, that were cable-based and they were up to 19.2 kbps and that was five times what the school system could get from just BCTel. They were elated.
GOB: When your father got into cable in the 50s, could he have ever envisioned what it has developed into?
JT: Dad started in the north shore in 1954 and I think his primary purpose was to get access to television. It was a challenge for him. We couldn’t get TV in Horseshoe Bay where we lived and dad wanted to see his family have access to electronic media that other people in greater Vancouver might have…
He recognized that as an opportunity, and, to get something into Horseshoe Bay, he went to BCTel – who he worked for at the time as a senior paymaster – and asked them if they were interested in getting into the cable business. They said no, that’s entertainment, we’re in the communications business, and so dad said do you mind if I try it? They said no, as long as you remember that you have potential for conflict of interest, and as long as you do what you do for us and continue to do it well, you can do the cable thing.
So he was really focused on getting just entertainment television and news television to the people that were in his community, where his family lived. He sold that in ’64, ’65 but he still had the itch and held the pole rights for places like Delta and he felt that he wanted to get back into it, so he did.
GOB: With owning the (U.S.) system (in Point Roberts Washington), what’s it been like operating both sides of the border?
JT: The sheer uniqueness of the territory gives us a bit of a leg up. It would be very difficult for any other cable company to come in there and serve that area. We are fully licensed and franchised by the county council and it’s a very small system (750 subs), so there’s very little in the way of FCC obligations.
…(O)nly 20% of the people that do live there are indeed American, most are Canadian and probably have cottages. There are those that might have dual status and those that don’t have dual status can only spend about five, five and a half months a year there before they get asked to leave or get asked to pay taxes in the United States. It’s a solid little community and we expect that we will see all kinds of digital cable services in the new fiscal year, starting in September.
GOB: So you’ll be launching digital in there before the deal closes?
JT: I think that there’s a good chance we’ll have some digital going down there before it closes, yes. Certainly it’s been on our drawing board for six months now, and we want to get something going, we want to phase out some of the old analog equipment that’s driving our pay TV down there
GOB: Delta and Coast have been digital for how long?
JT: Really since we could first get our hands on digital boxes… We’ve been digital since about ’96. We have a pretty good selection of digital services in both communities now, adding more all the time. We’re scheduled with five or six to be added before September.
GOB: Delta and Coast have been one of the early adopters no matter the size of cable system in Canada.
JT: Well you know certain things like Alpha Technologies… have been critical to our operation here at Delta …
We extended out into the north back in the 1970s… and we had about a 12 mile cascade of amplifiers that went through farmland and was not very well protected from hydro outages, so the standby power thing became a point and Fred Kaiser will say that in many respects Delta was responsible for his company’s establishment and success – not for his long term success but success in finding a market, niche market that he now sells into 140 countries around.
GOB: Yeah, and, what, 90% or something of the cable industry in North America?
JT: Yes. Fred will tell you that it was our company that really got him started in that, in that direction.
GOB: Delta was an early Internet adopter, too, correct?
JT: The school district has been an early Internet enterprise and we’ve gone into Internet as soon as we possibly could. We recognized that it had great potential and we entered with Com21 technology, which I still have about 15,000 out there.
GOB: Even though Com21 doesn’t exist anymore.
JT: Yep. They’re humming away. We’re rapidly deploying DOCSIS 2.0 modems right now, I think we have 4,000 of those deployed now and have to be doing about a hundred DOCSIS modems per night, just changing out the (old ones) so we can move ahead with our telephony preparations, which is scheduled for a soft launch in October, with hopefully a full launch in January.
GOB: And that’s going to go forward, no matter who the owner is?
JT: That’s my expectation. I’m sure that that Persona will want to do that. We’ve actually talked about it and they’re quite happy with our proposed timeframe and we’re going ahead as if it’s business as usual.
GOB: What made you side with Persona?
JT: I think it’s a good deal. It’s a good deal for Persona – and I think nothing’s wrong with having some independent voices out there. They’ll do well by this community and the community will do well by Persona in my opinion.
I just think it’s a good fit. Really I do. They’re good people, I’ve known Dean (MacDonald, Persona’s CEO) for 25 years. I know that his word is his bond and you can take that to the bank. He’s run these companies much in the same fashion that we’ve run over the years – committed to grassroots, to the community and to community programs.
These things are all important to us. I was at a Rotary meeting on Tuesday and of course people were aware of what was going on, so one question that came up with the Rotarians was, are we still going to be able to do our annual Rotary auction?
I said, "I’m certain that that will continue." I think we’ve raised over $750,000 over the last 15 years of the (auction), and then all that money goes back to the community, of course.
GOB: What are your thoughts for the future of the industry itself.
JT: The industry’s got a great future. It’s got the best pipe out there and I don’t see that changing any time soon. I think there’s lots of opportunity for entrepreneurial development in telephony or in data transfer – that’s the Internet area.
Even in the programming areas there’s more opportunity, where cable perhaps becomes more content-oriented. If you look at what can be done with switched video, that opens up mega channels of opportunity for cable.
GOB: What about for smaller operators?
JT: I think it’s going to be tougher for the smaller guys to stay independent. I think you may see a flurry of consolidation again next year. I have to tell you, it was getting more difficult for us. You look at all the specialties you have to deal with today and with the staff we have on board – they’re all very talented people, all very dedicated to the company and to their particular roles – but you know there’s only, only so many different things you can expect one person to do and still retain their sanity.
We’re sort of hitting the ceiling on that one in my opinion, so having a bigger base to draw on and being part of a bigger picture, such as Persona, gives our staff a lot of relief. It also gives them a lot of opportunity to grow… and we’ve proven every step of the way that our staff are among the best-skilled in the industry. They’ll bring some real value to Persona and help them grow their business and share some of the talent base that we have here among their existing systems.
