Cable Calling

Dave Watson was on the phone with his wife when he saw a white van pull up in front of his office building. Out popped Comcast Corp. founder Ralph Roberts, his son Brian and six other executives from Comcast. Watson had learned that Comcast had secretly cut a deal to buy the Philadelphia cellphone operation he helped run, Metrophone Inc.

That was bad news. Just weeks earlier, Watson had rejected Comcast's offer of a senior marketing job. As he watched, the executives stopped for a group photo. "I think the people who are coming to let me go are taking pictures in front of the building," he told his wife.

He not only survived, he thrived. He eventually became president of Comcast Cellular, then crossed over to cable. In July, he snagged the top operating job at Comcast's cable division, executive vice president of operations—essentially responsible for keeping the TVs glowing in Comcast's 21 million homes.

Watson has spent most of his career in the cellular business. He grew up in the Virginia suburbs of Washington, the son of a lawyer for the U.S. Tax Court. A love for soccer (he still plays) drew him into a short stint at a high-end sporting-goods company. He jumped in 1984 to Bell Atlantic Mobile, which was just building its network around Washington. Watson was hired to pitch the service to government agencies. There was no consumer market at the time, only business customers. "We had these enormous phones," Watson says. "There was no such thing as a flip phone."

He grew with the business as the phones got smaller, the prices got lower and the competition stiffened. Initially, there were only two cellphone companies in each market. By the mid 1990s, there were as many as five "fiercely competing," Watson says.

LIN Broadcasting recruited him to head marketing for its Philadelphia cellular unit, which was later sold to Metromedia. That was Comcast's hometown, but it was still a shock when Comcast—not a Baby Bell—stepped in to buy the system.

On the day the deal was signed, Ralph Roberts did come into the building and ask to speak with Watson privately. "I thought, 'The chairman is personally going to fire me,'" says Watson. Roberts, of course, knew about Watson's rejecting the job offer. But he didn't care. "This is not our main business," Roberts told him. "We would really like you to stay."

Says Watson, "I was speechless."

When Comcast sold its cellular unit in 1999, Watson got quite a culture shock crossing over to cable. Used to brutal competitive fights among cellular companies, he found Comcast Cable relatively sleepy. Executives and managers were too accustomed to cable's history as a local monopoly. Says Watson, "In the early stages, it was an eye-opener."

For example, when someone called to cancel service, Comcast reps did nothing to try to retain the customer. "The old way was, 'O.K., let's process your order,'" says Watson. By contrast, a cellular company would send those orders to a specially trained rescue desk armed with, among other things, special discounts unavailable to other customers. "These are all things that, even in a competitive cable world, did not exist," he says.

At the same time, Watson was fascinated by the power of a cable telemarketing operation. Cellular companies' call centers essentially handled service and billing problems. But Comcast also used its operation for finding new customers; moreover, when existing customers called in to resolve a problem, cable service reps worked to sell them additional services.

Watson contends that the industry and Comcast have changed dramatically: "We've kicked it into a different competitive gear." Comcast's marketing is smarter, he says. It's touting local HDTV and video-on-demand as products DBS can't offer and selling high-speed Internet and, soon, telephony as strong, new sources of revenue.

He sees VOD as cable's best weapon. Says Watson, "I think that we have changed the game from just the amount of channels we offer to more choice, more control."