September 2013

Q&A With Andrew Rein

Author: Harper Smith | Photographer: Photography by Anne

For more than 60 years, Hargray has been connecting area residents to each other and the world, growing from a local phone company to an industry leader providing a full suite of services, including high-speed Internet, digital television, and telephone service.

Andrew Rein, vice president of sales and marketing for Hargray, recently took time out to give us an insider’s look at the ever-changing landscape of telecommunications, the future of home entertainment and technology, and Hargray’s plan for bringing it all to the Lowcountry.

CH2: Everywhere you look these days, there seems to be some kind of new technology involving television and other home entertainment. What can Hargray’s customers expect in the coming months and years?

Andrew Rein: Yes, it is an incredibly fast moving industry in terms of technological advances, and we expect that to continue. In particular, customers are increasingly viewing content online. Industry reports and our own experience tell us that these services lead to Internet demand increases of 50-100 percent per year! This remarkable growth requires companies like us to ensure our network is capable of handling this traffic. So, one of our major goals has been to expand our line of high-speed Internet products. For instance, this year we launched 30×5 Mbps and 50×5 Mbps products for customers who access much of their content online.

Another major goal has been to enhance our television product for our video customers with features like Multi-room DVR, remote DVR programming, and an enhanced interactive guide. We’ve already introduced these features to our customers in Hilton Head and Sun City through a new television product powered by Microsoft Mediaroom. A similar television product will be available in the fall for the rest of our service area, including Bluffton, Beaufort, Pooler, Hardeeville, and Ridgeland.

CH2: You talked about accessing video content online, and there has been a lot of talk in the media recently about “cord cutters,” or those individuals who choose to stream all of their content rather than subscribe to cable television. Is cable as we know it here to stay, or is streaming content the future?

AR: I think the reality lies somewhere in between those two choices. There are certainly people out there who have chosen to stream content, be it television shows or movies, rather than subscribe to cable. But there is also still a very large portion of the population who enjoy live content such as sporting events and news as well as the convenience and variety of content that cable television provides. Our focus is to make sure we provide the most reliable, high-speed Internet for streaming content, and quality digital television packages with modern day features so that we can best serve our customers regardless of their preferred medium for video content.

CH2: What exactly is “a la carte” programming?
AR: We believe customers should be able to order the channels they want, when they want. Television programming should be like going to a restaurant: you order what you want off the menu and you get what you order. In essence, customers would be able to create their own channel line-up.

Right now, content providers require that we include a whole host of channels customers may not want in order to allow us to carry the channels customers do want. In addition, some content providers demand that we include their channels in our basic line-up, in essence, forcing all customers to pay for the channel, rather than allow us to put the channel in a higher tier of service. A perfect case study for this is our ongoing dispute with Fox Sports Carolinas, which broadcasts some of the Atlanta Braves games. Fox has demanded that we put this channel in our basic line-up and pay a higher fee per sub than every channel we provide with the exception of ESPN. Since this channel is ranked 82nd in terms of viewership by our customers, we have refused to meet their demands and Fox has refused to let us carry the channel at all. We think it is wrong to pass this cost on to all of our subscribers since it is not widely viewed. On the other hand, we also believe it is unfair to the customers who do want this content to not have the option to pay for it. We think content programmers should give customers the choice: If you want Fox Sports Carolinas, you can pay for it. If you don’t, you don’t have to. That seems fair to us.

CH2: How does Hargray choose which channels or networks are in their line-up?
AR: First and foremost, it is based on the opinions of our customers. If an overwhelming majority of customers want a certain channel, we are going to do our best to have it in our line-up. However, in order to keep rates as low as possible for our customers, we must also consider the cost associated with that content. If only a select few of our customers value the channel, we focus even more intently on the cost of the channel; we’ve dropped a few channels that are expensive and don’t enjoy broad support from our customers.

In addition, as more customers access content online, the exorbitant rate increases from content providers, estimated by industry experts to be 10 percent per year, are becoming harder for us to justify passing on to our customers. And we are not alone. You may have seen the recent press regarding DirecTV’s dispute with Viacom (which owns channels like Comedy Central and MTV) or Time Warner Cable’s dispute with CBS. We deal with these issues regularly with content providers and are looking forward to a day when content providers allow customers to buy only what they want to watch, when they want to watch it, and on any device they choose.

CH2: Over the past 60 years, Hargray has gone from being a local telephone company with a few thousand customers, to a large telecommunications firm providing cable, phone, and Internet to tens of thousands. What’s next?

AR: Our focus continues to be on growth and investment. In addition to significant investments in our core network, we recently expanded our service area with the acquisition of Charter Communications’ Beaufort cable system. We also completed an expansion into Savannah, Ga., in which we are building fiber directly to cellular towers and commercial enterprises. We already have dozens of major customers in Savannah including Sprint, Gulfstream, St. Joseph’s Candler, and the Savannah College of Art & Design, and we are just getting started. In addition, we also added a full suite of managed IT services for businesses through the acquisition of iTech, a Savannah-based managed-services company. This is an extraordinary company with a set of products and services that goes perfectly with our network and data center.

And finally, over the past few years, Hargray has also played a major role in improving cellular service throughout the region by providing the fiber connectivity that powers the major carrier’s 4G networks. In fact, wireless carrier networks are some of the most complex and sophisticated networks in the world. We’re proud to be their preferred partner throughout our South Carolina service area, which is a testament to the quality of our network.

CH2: I can’t help but notice all of the monitors, computers and television screens surrounding us here. Exactly what is all of this stuff?

AR: We are in Hargray’s new state-of-the-art Network Operations Center, or NOC, which was completed last year. Our capable engineers utilize this technology to monitor our network in real-time, which means we can identify and resolve some network issues before they impact our customers. This is not only important for our tens of thousands of residential customers in the area, but also for our larger institutional and business customers, such as the Beaufort County School District and the major wireless carriers I mentioned before, for whom we provide more in-depth and proactive monitoring. It also helps us respond immediately to customer-impacting outages such as fiber cuts. With all the development going on in our area, especially the road construction underway on 278 and 170, our network is often cut or damaged. Also, particularly in the summer months, our network is often impacted by storms. Our NOC enables us to address these events as quickly as possible. The NOC is staffed 24-hours a day, seven days a week, and provides a direct contact for business and residential customers as well as Hargray field technicians.

CH2: Well, Andrew, thank you so much for your time today, and thanks for the inside look at Hargray.

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