Interview with Glenn Jones of Jones Intercable in Upside magazine

By Richard Brandt
August 1996

Glenn R. Jones is the iconoclast of the cable industry, a lover of dragons who writes poetry, plays show tunes on his piano and is fond of calling meetings to order with bagpipes. Jones International Ltd., wholly owned by CEO Jones, is a $800 million empire. It holds a controlling interest in publicly held Jones Intercable Inc., one of the largest cable operators in the country. Jones Intercable also manages independent cable companies. His other subsidiaries include a cable TV-based university, a cable network devoted to information about computers, two country radio stations, and film and CD-ROM production companies. Sitting in his office "war room" in Englewood, Colo., sipping his trademark cappuccino, the surprisingly soft-spoken executive tells Upside why and how he hopes to change the world.

Upside: You have an interesting background. Your father was a coal miner and you went to Findlay College.

Glenn Jones: I was sort of a bad boy in my early years of school, until the last half of my junior year. I had missed things like basic math and grammar. So I got a job at Sharon Steel [in Sharon, Penn.] in the cold roll department, working as a cutter. One morning, I woke up to my father hitting my feet with this cardboard suitcase. He said, "Son, get up, you're going to college today." We went down in his Ford and motored out to Findlay College [in Findlay, Ohio], which is sort of a religious college. It's a preministerial school.

I found a place to stay at somebody's house, and he drove out of town. But I transferred after my first year because it was pretty austere for me, [to] Allegheny College [in Meadville, Penn.]. But I graduated a semester ahead of my class, so I just left and hitchhiked to San Diego to finish up my last semester in the school of hard knocks, and I didn't go to graduation. Then I got drafted into the Navy.

I understand that you wanted to be a frogman, but since your eyesight didn't qualify, you had to sneak in at night and memorize the eye chart. Where did you get all this information? Well, that's right. I sneaked into the infirmary and memorized the eye chart. But when I went to take my eye exam, they had changed it to an electric one. So I flunked. I went into the Pacific, [in the] amphibious assault fleet.

Right after the Korean War they dropped the standards for a group of frogmen called the explosive ordinance disposal teams--bomb disposal teams. So I signed up. I went to bomb disposal school, and then they sent the top 5 percent of us to special weapons disposal school. We could do everything from cannonballs to thermonukes, in Aqua-Lungs or hard hats.

What did you get out of the training? Well, I learned a little technology, electronics--it was very advanced stuff, especially thermonukes, at that time. And of course, we had access to pretty much everybody's thermonuclear activities. So I learned about capacitors and resistors, booby traps and land mines.

After the Navy you decided to go to law school? Well, now there are bomb disposal squads in every police force around the country, but in those days, it wasn't a big job category. So I went to law school at the University of Pennsylvania.

How did you get to Colorado? I just had the GI bill, and I had a couple of kids and was broke. I ran out of money after my first year in Philadelphia. Because I was involved in technical intelligence in the Navy, I knew that they were building an ICBM in Denver. I knew that there would be a destruction system, which would probably have launch bolts and things like that, explosive components that would be very delicate. I came to Denver to make enough money to go back to law school.

I went to the state employment agency. This guy asked, "Mr. Jones, is there anything in particular that you can do?" So I said, "Yes, I'm a deep-sea diver." And the guy just broke up. He walked out of his office because he was losing it. Finally, when he regained his composure, he came back in and sat down and said, "Well, Mr. Jones, out here in Denver there are hardly any calls for deep-sea divers!"

So I told him I used to work in a steel mill, and I ended up going out to the Martin Marietta [Corp.] as a trainee. As soon as I got in there, I found out who was handling the explosives. He said, "Oh, we've been looking for somebody like you." So I ended up testing explosive components for the Titan 1 rocket.

I went back to Pennsylvania, ran out of money again, came back out, and got another job at Martin, as a senior industrial engineer. They let me work at night and go to law school at the University of Colorado in the daytime.

Where did you start working when you finished law school? I was broke again. I lived in half a Quonset hut with my then-wife and two children. I couldn't go anyplace, so I drove into Denver and took the first job I applied for. I started practicing law with a small firm here.

I worked there for nine months, and I decided to start my own law firm. I didn't have an office, so I conducted business out of a coffee shop. Finally, I started trading out legal services for a cable brokerage operation in return for space. Then I became their deal lawyer, as the brokerage company represented a buyer or seller. Whoever was on the other side--if I was representing the seller, then the buyer--would hire me for their next deal. So I started representing cable companies all over the country.

Why did you decide to move into the cable business yourself? I burned out. I was dealing a lot with the government. I represented a southern Baptist church, trying to build senior homes for them, and it was incredible what you had to do because of the bureaucracy of government. Then I read The Conscience of a Conservative by Barry Goldwater--it was 1964--and I decided that instead of complaining, I would try to do something. So I decided to run for Congress. I got the [Republican] nomination, which was kind of a brutal process.

How old were you at the time? Thirty-two or 34. I ran for Congress and lost. It was a bad year and Denver is a very, very safe Democratic area. I was broke again. One day I was coming from downtown out to my house, in the fall, and the Rockies were sheet white, and it just sort of beckoned to me. I couldn't get a job that would pay my debts, and I didn't want to practice law, so I decided to go up in the mountains and try to find a cable system that I could buy with nothing down.

I had $7,000 equity in my house. So I used the money to sustain my family while I went and worked things out up in the mountains. I lived in my Volkswagen.

A lot of the lawyers up there were alcoholics. They wouldn't even show up for trial. It wasn't easy to win up there. But then I saved a subdivision from the shylocks for a guy. He was going down the tubes, so I talked him into transferring his subdivision to me. The next week when they came up, their play to get control didn't work out. This guy didn't have any money, so he gave me 20 lots. That was my first success.

How did you get into buying cable systems? As I roamed around up there I found out who owned what. The guy who owned the cable system in Georgetown [Colo.] was the town electrician and the town plumber, and he owned the post office building. He was going to lose his franchise. It was an archaic cable system. He'd built it just to sell television sets. It came from 8,000 feet up, and it didn't hit a single telephone pole in town. I think that the first thing it hit was a tree, then somebody's eaves, then a lilac bush, then a couple of fence posts. It was an open line, about 440 volts. Anytime it rained they'd lose the load, the high signals.

The deal was that I'd buy it for $12,000. I told him that I would give him $1,000 down and it would be unsecured, because the whole thing had to be rebuilt. I yodeled all the way down [the mountain]. I said, Hey, I'm in business now. I can build an empire.

How did you turn all of that into a successful cable business? That day I sat down and calculated how much it would cost to build [cable for] the rest of America. And it looked like it'd cost something in excess of $10 billion. I wondered, Well, how do you become a player on that kind of a chessboard, with a hundred subscribers and no money? So I created a concept of a publicly registered limited partnership, so that I could put the depreciation and startup costs in the hands of partners who could write them off. Then I would have a general-partner management company that would be basically dealing with net income.

What year was that? This was 1973. Then I raised $380,000, enough to finance my first public offering. Everybody gave us faint praise and thought it was un-American. So I did [a limited partnership]--I called it Fund Three because I'd done two private deals--and I raised $152,000 and bought a system in Alabama. Then I started raising some sizable funds. When I raised $33 million in one of my funds, everybody started looking at it as though maybe it was mainstream America. When I got up to almost $200 million a year, it became mainstream.

But I had bypassed the cable industry. It was a hard sell in the cable business, because it was a controlled environment and everybody thought my cattle were grazing on their grass. So I went directly to the finance community. We ended up raising over a billion dollars.

What kind of revenues do your businesses now have overall? Something approaching $700 million a year. But I had to finance everything separately. To build systems I borrowed as much as I could. Then it became obvious that I was getting second bites of everybody's apples, in terms of buying cable systems. I had to form my own cable television brokerage company. Then I couldn't get anybody to sell my partnerships early on. So I formed my own securities company and sold it myself.

Like most cable companies you have good cash flow, but you don't tend to have profits. As you become a broader communications company, will you be able to leverage your strengths now into something profitable? Jones International is a holding company that has a number of companies that we think will converge in the 21st century. Some of them will make profits, some of them will have cash flow.

You've always been an advocate of deregulation. What do you think of the Telecommunications Reform Act? It's not the bill I would have liked, but it's OK. Nobody got everything they wanted. Mostly it was a telephone company bill.

What don't you like about it? I don't like having my rates regulated for three more years in the face of extreme competition. I didn't particularly care for the ignoring of DBS [Direct Broadcast Satellite] as any kind of a viable competitor, which everybody knew it was going to be. But all in all, it gives us a platform to move forward from, and so I'm happy with that.

What do you think of the Communications Decency Act? I've always thought that we should do a little more than we had been doing with decency, especially in terms of violence. People tell me, especially large networks, that that's not true, and that what you see on television doesn't really count. Then why do people spend billions of dollars advertising on television? Violence sells.

What should be done about it? I support the V-chip concept. I also think that you can't throw out the baby with the wash. I believe in the First Amendment. But I also believe that it comes with responsibilities. Somehow we have to convince producers, network presidents and people in general that this kind of programming is just not good for our society.

What do you think about the Decency act as it applies to Internet broadcasts? On the Internet, you have the same thing going on. There is an added factor in the Internet, however, which is terribly dangerous: the government. It's the government's well-meaning, completely wrong attitude about wanting to control security aspects. The Clipper chip is one of the worst ideas in the history of this country.

Some people argue, on the other hand, that it would be so easy to do drug deals, to hide money, to conduct illegal acts using the Internet that the government needs some way to stop it. The government has everything it needs now. And drug dealers have better armaments than some armies. The same is true on the Internet: They'll have whatever security devices they need, because the U.S. doesn't control the world. You can get this stuff in Russia.

What about dealing with issues of pornography or violent content on the Internet? How can that be regulated? The laws are on the books to do that. We do it just like we've been doing it. That is a red herring. That is a very small part of what's going on in the Internet.

In an increasingly deregulated business with a lot of overlap and convergence, what are the strengths that allow you to compete with all of these phone companies, broadcast companies and content companies? I think that imagination is our strength. Imagination is more powerful than trucks. And quickness, not having to analyze things to death before you move. We're a very anticipatory company.

So what does a deregulated world look like 10 years from now? Are a lot of companies going to disappear? Sure.

Do the lines between the telephone, cable and broadcast companies disappear? Certainly the cable, telephony, computer industries and some others converge into a new industry that's as yet unnamed. We call it the "mind extension," because that's the only term that reaches out and gets everything for us. It won't be just one business, because if you look at health care, for instance, and you fuse the electronic tools with health care, you end up with a different kind of business.

How can you, or any cable company, compete with the much richer phone companies? Well, we've been doing that all of our lives. We're a small, rock-and-roll entrepreneurial company, basically. For instance, if I have the $10 million it takes to build a cable franchise, and another company has $20 billion, but I only need $10 million, then I'll beat them in the trenches. Of course, we're larger now, and we have a very substantial partner in Bell Canada, which is as large as any of the other RBOCs. [Bell Canada bought 30 percent of Jones for $400 million in 1994.]

Why Bell Canada? Bell Canada was the ideal partner for us because we had a history with them in the United Kingdom that was working out very nicely. We liked the way we were treated as minority partners over there. We brought them into our deal and made them the senior partner. I wanted a partner that wasn't troubled by the modified final judgment [which allowed the breakup of AT&T]. They, being Canadian, were not.

Secondly, they have what is probably the largest R&D facility in the world--Bell Northern Labs. I needed access to that technology. And third, another subsidiary was Nortel, [called] Northern Telecom in those days, one of the world's most successful manufacturers of digital switches and things like that.

What did Bell Canada get from you? We have two classes of stock: common stock and class A stock. The common stock has 10 times the voting rights. I control the common stock. They have an option to acquire the common stock from me in another six years or so.

Do you anticipate that at some point that may happen? If it does, then control passes. In the meantime, we control the board. Also, they understand our structure and invested in our educational company, Jones Education, and our movie company, Jones Entertainment Group, and a company called Jones Lightwave [a fiber-optic company], which we've since liquidated.

You've launched a $35 or $40 million fiber-optic cable system in Alexandria, Va. It's the Jones Internet Channel, which provides high-speed access to the Internet, among other things. We have our own hookup people, our own installation people, our own customer service reps and our own 800 help line manned 24 hours a day. It's a thousand times faster than what you get from the telephone company.

Cable systems are generally set up to broadcast from one point to many points. Did your switching capability come from Bell Canada? Yes. They also agreed to supply me with people. They helped us design and implement a completely passive cable television system. It's all glass and light. There are no electronics. It'll be 10 self-healing fiber rings. In terms of the Internet Channel, we have full bandwidth down and full bandwidth up.

A cable modem system is a shared-bandwidth system. What kind of bandwidth do people end up with in their homes? It's full bandwidth, and we don't anticipate it crashing. We have fiber down to about 160 home nodes.

And then it goes as coaxial cable from those nodes to the houses? Yeah, and you can duplicate the bandwidth. You're not constricted to one electronic, magnetic bandwidth like you are in over-the-air broadcasting.

You're offering your own content and services? Yes. We'll be direct competitors with America Online and others. But we have high speed, which they don't have.

And this is run as a Web site? Right. But it's high speed. You don't have to go out for a cup of coffee while graphics are downloading.

Will cable modem technology give you sufficient bandwidth for the long term, or do you at some point need to go to something that will incorporate ATM technology? Well, for what we're looking at right now, the cable modem will be fine. Eventually it'll probably end up as a chip in a device that is maybe a network computer, or that serves both as a television set and as a computer.

How many people have you got on the Internet Channel now? We're rolling it out slowly. We've got less than 100 subscribers right now. We've got a very elaborate business plan for massing them up.

Will cable competitors be interested in signing up with you? Well, it's like HBO, or Mind Extension University [Jones' cable-based college-course program]. We call it "advanced cable programming." It's the ultimate interactive network. It keeps refining itself and getting better and larger, and less controllable, which we like.

Are you offering cable service as well as the Internet Channel? Yes. And we'll soon be offering telephony service.

You just did a deal with Bell Atlantic, allowing you access to local phone lines in that area. It allows us to go into the local telephony business. They're required under the [Telecommunications Reform] Act to do that. They must sign an agreement with a cable company to get into long distance. Our getting into the local telephony business is a quid pro quo.

Why did you decide to take on Bell Atlantic, which is also getting into interactive services? If you're going to compete with somebody, they're one of the ones you would not want to compete with. But there was no choice. The Telecom Reform Act requires us to do this if we want to get into the telephony business.

Couldn't you take on somebody else, since Bell Atlantic is also so aggressive in interactive services? They all are. It's like "Terminator 2." You can't get away from it.

You've got cable services, Internet services and satellite services. You own your own satellite transponders. Why not just lease them? Some years ago, I was given about 48 hours to give an answer to whether I wanted to acquire transponders for about $50 million. I decided I did. I needed that element to control our future destiny, rather than relying on other people's goodwill or happenstance or serendipity.

Aside from all the technology infrastructure you're putting in place, you're building a lot of content. You have Mind Extension University, radio and cable broadcast stations, a CD-ROM production company and a movie production company. Is your real goal the content? It's a new concept, where content and infrastructure are fused into one product. Some of it we'll do separately. But with some things, like education, we're fusing the electronic tools of the 21st century with education. The same with health care, with event cable programming like the Internet Channel. Those are fused products.

How do you describe the company? We're in the business of extending the human mind. Everything that we do is convergent with that concept. If it's not, we get rid of it. Cable systems are ancillary to it. Entertainment, our movie company, is ancillary to it. Education is very much a part of it. Our computer network is the computer science department of Mind Extension University. You can get a degree there, teaching teachers how to teach using technology.

We are especially interested in alternative uses of television, because we think it's a spectacular tool that is not being fully utilized in our culture in terms of education, in terms of health care, in terms of environmental aspects. These are huge markets that we can address.

So far, television has largely been used for rather mindless entertainment. Yes, well, there's a lot of junk food, when we need some vegetables and more substantial food. That's true. That doesn't mean that we have to continue doing it. For the first time in the history of the world, the technologies have come to us to dramatically extend the human mind, and I think that we need to be doing that. And it's not just culturally the right thing to do, it's a huge market. It can be extremely profitable.

How did you come upon this theme, this goal of extending the human mind? In the Industrial Age we extended the human body. We dealt in artifacts like trains, forklifts, airplanes and automobiles. These are body extenders. In the information revolution, we're extending the human mind. The artifacts of an information/knowledge revolution are things like high-speed, high-capacity networks, microprocessors, lasers, things like that.

And all those artifacts are now being controlled by a human mind, a 3-pound electrochemical device running on glucose at about 25 watts. You add to that the tools of the Information Age, then the human mind becomes more clearly the dominant force on the planet. And when you think also about the infrastructure that we're spending billions of dollars on around the world, when you think of the neurology of it, the termination point is the human mind.

As we extend the human mind, are you optimistic about what we can do with it? I'm ecstatic about the possibilities. It's the first time in the evolution of human-kind that we've had this capability, and we needn't make the same mistakes that we made with television on the Internet, and we shouldn't. These are technologies of freedom that we're talking about. This is really talking about moving power from governments to people, from big institutions to people, from universities to people--moving power to individuals. And America, probably more than any other country, has shown, in its experiment with self-government and self-empowerment, that the productivity unleashed by the fusion of technology and concepts is amazing.

The ability of people to transport themselves from one place to another has mixed everything up. With the Internet and the convergence that's going on, the drama of that is multiplied, because we're not talking just about the technology, we're talking about concepts.

Take education, for instance. It's been in a box, been done the same way for thousands of years. So now the questions arise: What is education, really? Where does it take place, really? Can it take place in your living room? With Mind Extension University, it does. Do you have to have some certified institution do it?

These are new questions. It's a miracle at the very point in our civilization where we need to do something dramatically different, because you can't stop the onrush of technology. The whole world is going digital, with you or without you.

Education will be, and is now, one of the major industries on the face of the Earth. And it needs to be the beneficiary of the tools of the 21st century, which we can bring to it.

Education until now has not been a very good business. We don't pay teachers well, we don't support our schools. Are you advocating a privatization of education? I'm advocating a fusion of institutions and rock-and-roll entrepreneurs, like ourselves. You can get companies that are so large that they're not going to bring much more to it than the government brings to it. New ideas come from individuals, and they come from small companies that have the entrepreneurial drive, imagination and creativity to evolve products out of concepts. And that's what we lack in education right now.

The technologies-- in terms of how entrepreneurs do things, how the private side does things--need to be fused with the educational process.

How do you mix that technology into the existing institutions, which, again, tend to be poorly funded? How do you get your educational paradigm to people without money in general? We're spending plenty of money. There are some interesting research efforts that have established that in the United States we spend more money than a lot of other countries that are doing a lot better than we are in terms of testing out in math and science and so forth. So I don't think money is the problem. It's how we're spending the money. The paradigm that we're using is that you mix it up with things like Mind Extension University, which is basically a fusion of existing institutions with the technology of the 21st century, and the entrepreneurial concepts that exist in America and around the world. Because entrepreneurs are risk-takers, basically. We analyze the new potentials and possibilities.

You take some of the existing educational institutions and through Mind Extension University, you put them on television, through cable, and now through your on-line efforts. And you're moving as well into CD-ROM and film production. We're saying to universities, Look, you don't have to take the risk of the electronic platform, of satellites and uplinks, and marketing and all that kind of stuff. We've already done it. Just plug in. And that's what they're doing.

So how do you make money from this? It costs maybe $800 to $1,200 to find a student, if you're a university. We do that. We split the registration fee with them. We try to lessen our cost. We have Mind Extension University bookstore. We have an electronic student center. On a busy day we might get 3,000 calls, and of course we have Web sites and all that kind of stuff. And the cable operators pay us for carriage, like they do HBO. So we have multiple revenue streams coming in that can help us drive down the cost of education.

What kind of annual revenue rate are you getting from Mind Extension University, and is it making money yet? It's not making money yet. When I first started out I figured it'd take me 10 years to hit cash break-even, and it's going to do that. We're in our eighth year. We should cross over $20 million, maybe $22 million this year. It's looking good.

I've read that you had some sort of epiphany at the Vietnam War Memorial that got you into the education business. Yeah, that's true. In Korea, as I was telling you earlier, I was on this troop transport, amphibious assault corps. I was a sort of philosophical guy back then, and I was writing a novel that had to do with freedom and governments and things like that. I was having trouble finishing it. I was also asking the Marines and GIs whom we were transporting why they were going into battle, why they were going to Korea, what they were thinking. And they would say, "Well, we're doing it for freedom" or "We're doing it for our country."

But when you'd ask them what they meant by freedom or self-government, they didn't really have a good grasp of it. I decided that the schools aren't doing a very good job of teaching all this. I couldn't really get a good, universal answer from anybody, and I didn't have one, so I couldn't finish my novel because that was the crowning issue I was trying to answer.

I've thought about that for decades. I really just figured it out. I'm a voracious reader, and I've always been interested in education, and doing something with television and education that's substantial. And so all these thoughts were running around my head--my subconscious had been working all this time--and I just realized what freedom is, why people think like we Americans do. It's not because of anything we're taught in school particularly. It's because it's in the environment, because people can go from nothing to being very successful in America. And when people are successful, others see that.

I'd just read A Nation at Risk [a 1983 Department of Education report]. There's a paragraph in there that said that if this system of education that we're dealing with in America were imposed upon us by a foreign power, we'd deem it to be an act of war. But nobody was doing anything. They were just studying the issue to death and getting government funding and studying it some more.

So anyway, I was in Washington and I had wrapped up early, so I told my driver to drop me off at the Vietnam War Memorial, because I had never seen it. It was a beautiful day, in the fall, and the leaves were falling and it was sunny. But he left me out at the wrong place, so I walked toward the back of the memorial.

What was going on there was astounding. It was very emotional. People were holding pieces of paper up and tracing their loved ones' names with a pencil. People were leaving palms or flowers there, and people were crying and others were sort of walking slowly through. I couldn't make it back to the car. I sat down on the park bench, and I found myself weeping. America was so terrible to these guys, and to guys who did come back and faced what America had to offer them, which was disdain and disgust.

I was thinking about those things and just trying to get control of myself, and this leaf, I've still got it here someplace, a sycamore leaf or oak leaf, came down and hit me right in the head. The stem just--poh! and dropped on my lap. So I picked it up, and I was looking at this leaf and then I decided: For those of us who are still here, we need to do something about education, with the same commitment that these guys showed in solving what we thought was a national problem there [in Vietnam]. We should not despair, but should make the commitment and do it. And that for me meant that I should lay quality education all across America. Which I did. I called it Mind Extension University.

I know you read Japanese martial artist Miyamoto Musashi's The Book of Five Rings, and you've made some analogies between business and military encounters. What is your philosophy there? Business is bloodless warfare. My textbooks are The Book of Five Rings, [Sun Tzu's] Art of War, [Carl von Clausewitz's] On War, and books about [German Field Marshal Erwin] Rommel in North Africa.

What did they teach you about how to do business? The rules of war are more like the rules of business than any other kinds of rules. Business is the art form of America. It's the most complicated of art forms. If you deal with painting on a canvas, it's standing still, not moving. You have green and you have blue and you have all these colors of paints, and you can mix and make different colors and you can put them on the canvas in an infinite number of ways.

But in war, as in business, nothing's standing still. You're dealing with moving targets all the time. You're dealing with people who are changing their minds all the time, you're dealing with a landscape that changes every minute. And that makes it very difficult to get all the stars lined up to execute. So you're always dealing with risk and chance.

In terms of workforces, I think it's Clausewitz that says if you lose 20 percent of your leadership in the army, you've got a problem. For logistics, if you're going into a deal, it's good to read Rommel, because it gives you the right mindset. You go in there and you do what you have to do. Everybody's protein for somebody; you have lunch or you are lunch.

You've written poetry about dragons. Why such an interest in dragons? I like dragons because they stand for so many things. There's an air of mystery about dragons. They can be good and bad. You can give them whatever character you want. If you think of risk as a dragon, then it's always on the chessboard and you don't forget about it.

You've also been known to call meetings with bagpipes. Why bagpipes? I've always been enchanted by bagpipes and dragons. My brother played the pipes. I can't give you a good answer. There's a military element to them also. Leading to battle--historically, they've been used for that purpose. It adds a depth of color and imagination. There's something very special and attention-demanding about bagpipes. When you want everyone to go into dinner, you can't lose by having a couple of bagpipers walking toward the dining room. It doesn't take brain surgery to figure out what you're supposed to be doing.

Do you play yourself? I do not. I wanted to. I'd also like to play the banjo, and I'd like to play the piano like everybody else, but I just play by ear. I just like music. I started out in life to be a musician, but I couldn't afford it, and now I don't have the time. I'm writing a musical now.

What's it about? It's about business.

How soon will you finish it? I guess when I have the time. I need some large blocks of solitude.

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