The cable guy: David C McCourt on Ireland’s broadband future

3 Aug 2016

As owner of Enet, one of three consortia shortlisted for the National Broadband Plan, TMT magnate David C McCourt is in for the long haul

One of America’s most successful telecoms, media and technology pioneers, David C McCourt has skin in the game when it comes to Ireland’s National Broadband Plan. As owner of Enet, one of three firms shortlisted to take on the plan, McCourt wants to bring his wholesale partnership model to the table.

When the telecoms industry was tying itself in knots trying to push data down copper wires that Alexander Graham Bell would have recognised more than 100 years ago, McCourt was already ahead of the game in Boston, using fibre to connect the city’s banks.

He credits this foresight with an almost religious zeal to place himself and his partners at the nexus of regulatory, consumer and technological change.

Born to Irish parents in south Boston, McCourt, as CEO of Granahan McCourt, acquired fibre firm Enet, which manages the nationwide metropolitan area networks (MANs) on behalf of the Irish Government, in 2013. McCourt’s company also acquired a majority shareholding in Airspeed.

‘I’m not smart enough to be afraid, so we have that huge advantage’

In recent weeks, Enet emerged as one of three consortia listed as competing for the pivotal National Broadband Plan, a €500m-€600m endeavour by the Irish State to connect 1.8m people and more than 900,000 premises to high-speed broadband. The high-stakes gambit by the Irish State covers 96pc of the country’s land mass and more than 100,000km of road.

In the coming weeks and months, we will be talking to the heads of each of the three consortia recently shortlisted for the National Broadband Plan, including Eir, SIRO (Vodafone/ESB), and, today, Enet.

Inventor, innovator, entrepreneur

Speaking in a rich Boston accent, McCourt said he never set out to be a billionaire telecoms, media and technology (TMT) magnate with a number of Emmys under his belt.

Growing up on the crossroads at Watertown near where the black and Irish communities of south Boston and Dorchester meet, McCourt grew up in a community of builders, cops and firemen and, after graduating from college, wanted to be a social worker.

It was while working with Tipp O’Neill, whom he describes as “the last of the great American Democrats when being a Democrat meant something”, that he read an article in Time Magazine about how cable TV would never come to the suburbs of America because it was too expensive.

“My family were all building contractors and I remembered something my dad told me about how out at the airport they were cutting small slits into the runways to put taxi lights in and I thought ‘why not do that to put cable systems in?’ To make a long story short I invented a way of making a conduit with the cable already inside to make it easier to lay cable quicker and easier without too much disruption.”

With this, his first company, McCourt Cable Systems, was born. At 24, he built Corporation Communications Network, which used fibre to connect Bank of Boston’s buildings together.

He came to the attention of Walter Scott, an American billionaire leading the $20bn Peter Kiewit construction empire, which had found itself with a fibre network on its hands after a client went broke.

The cable guy: David C McCourt wants to take on Ireland’s broadband future

‘What fascinates me, what motivates me, is taking on the big guys when there is huge change in the business world’

McCourt joined forces with Scott and a new company, MFS McCourt, was forged. Within several years, McCourt and Scott built and sold 14 companies, including MFS McCourt for $14bn. They repeated the feat in Europe and in Mexico, selling a phone company to Mexican telecoms tycoon Carlos Slim.

McCourt’s entrepreneurial flair won him the Entrepreneur of the Year accolade from Ernst & Young, a White House Award from US President Ronald Regan, a Top Entrepreneur accolade from the Harvard Business School of New York and a gold medal from the American-Irish Historical Society, an award previously bestowed on Ronald Reagan, Mary Higgins Clark and Bono.

As well as succeeding in telecoms, McCourt became something of a broadcasting supremo. He bought the first independent TV station in the Caribbean, filmed documentaries with Angelina Jolie and Michael Douglas in Tanzania and Sierra Leone, and also won an Emmy for the children’s series Reading Rainbow and produced Miracle Boys on Nickelodeon’s first teenage network.

Today, McCourt runs Granahan McCourt and chairs Satellite Holdings LLC and is understood to be collaborating with Warren Buffet’s Berkshire Hathaway investment vehicle to win the lucrative National Broadband Plan in Ireland.

“All along, Walter Scott has been my business partner and he sits on the Berkshire Hathaway board,” said McCourt. “He partners with me in everything to do with telecoms and he partners with Warren Buffet on everything to do with energy.”

In recent months, McCourt revealed the first public-private partnership in the Kingdom of Saudi Arabia to make the country a world-leading exporter of satellite technology.

While he may seem to have the Midas touch on all things tech, telecoms and media, McCourt puts it down to hard work and luck. “Also, I’m not smart enough to be afraid, so we have that huge advantage.”

McCourt visits Ireland several times a year and he owns a 1,000-year-old manor house in Clare, which has its own pub that he opens up to the neighbours when he’s in town.

“What fascinates me, what motivates me, is taking on the big guys when there is huge change in the business world.”

He points to the early days of the internet and the telecoms industry being hellbent on using copper to transmit internet when fibre was the obvious choice. He recalled his days in Mexico when creating an affordable telecoms service led to more members of the population getting a phone line.

“Everywhere I go I meet people who like to tell you how much smarter they are than others and what f***ing geniuses they are. I’ve just been lucky because I focus on anywhere where there is regulatory, technological and consumer change. Anywhere we see the potential for a lot of disruption, we like that.”

He sums up his definition of disruption by pointing out how the US steel industry ignored the new Chinese entrants to the market that were going after the lower margin work but gradually toppled the US giants.

‘There is no self-doubt where there is no legacy and that’s why the telecoms industry ran into a group-think situation where it was trying to eke as much life out of copper as possible’

“Never go in at the top of the market and try to create a better product because the guy you are competing against, that’s his lifeblood, and he will fight you tooth and nail until you are dead. Go in at the bottom of the market where he doesn’t care about you and just chip away.

“Another way is to wait until the big guys go broke and buy them up at 10 cents on the dollar.

“And a third way, and the way we have always focused on, is going after things that didn’t exist before, where there is no top, bottom or side to the market. That way you can think clearer than the big guys when they are busy defending their territory.”

McCourt recalls his telecoms company in Boston, which built its own purpose-built fibre network to connect Bank of Boston’s buildings while rivals were trying to jam data through copper cables. “Up until that point, the only innovation in the telecoms industry was the push-button telephone. We built a fibre network and then realised we could run voice for free. And that’s what happens all the time with innovation, the applications come afterwards.

“We were lucky we saw a change in the industry, thought clearly about it, and the applications followed. It was the same in Mexico. We didn’t plan to go after Carlos Slim’s market, we weren’t even going to try. We aimed for 5pc of the market and ended up with 12.5pc of the market.

“We think clearer when there is no legacy business. There is no self-doubt where there is no legacy and that’s why the telecoms industry ran into a group-think situation where it was trying to eke as much life out of copper as possible.”

Competing for Ireland’s National Broadband Plan

McCourt said that the lack of a legacy network and an established track record as a wholesale, open-access provider makes the Enet consortium an ideal applicant for the National Broadband Plan.

“If you own a proprietary network and you offer wholesale services your instinct is to do things within your proprietary margins, we don’t have that problem,” he said.

In a barb directed at Eir, he added: “Eir’s shareholders are designed to get out every few years and renegotiate.”

On ESB, he said: “ESB is a very well-run company and very well-respected. However, it is the third-most-expensive power company in the EU27. Maybe they should be spending their money figuring out how to drive down the cost of power, which would be good for Ireland, industry and entrepreneurs, rather than spending it on telecoms.”

On Enet’s credentials, he said: “Ours is a true public-private partnership. We have spent €100m since we came here and last year we fibred more premises in three months than SIRO had since its exception.

“Our partners are Berkshire Hathaway, John Lang and 3I, the largest infrastructure fund in Europe.

“A little-known fact is that Berkshire Hathaway has never sold a company it has bought, ever. It invests in good companies and keeps them for the long run. My partner Walter Scott makes investments in things that can’t be sold for two generations. We are a 100pc wholesale open-access player focused on the long term,” McCourt said.

So, does he think Enet can win against Eir and SIRO? “If the competition is non-political we have a good chance. We are in the business of doing exactly what the National Broadband Plan sets out to do and we have perfected the partnership model.”

The sun always shines on TV

Stepping away from the broadband situation, McCourt is also spearheading plans to lead an upheaval of the traditional TV business, starting in the Middle East with a global TV channel called

“Southern California dominated the global entertainment industry because it had mass market distribution on its doorstep and then could sell TV content at a fraction overseas. The challenge for the rest of the world was how do you produce professional quality content when you can buy an American show for next to nothing.”

The cable guy: David C McCourt wants to take on Ireland’s broadband future

‘Every time I leave TMT I get my ass kicked. It’s a tough game. Even a blind squirrel finds a nut once in a while, so we stick to the stuff we know about’

With all the disruption in the world and the impact on-demand is having on traditional media and broadcasting, McCourt has once again found his perfect storm of regulatory, technological and consumer change.

“People are enjoying the benefits of globalisation but want control over their lives. They are expressing themselves on social media and on YouTube, watching more online content than linear TV, but the content is mostly dancing cats, unscripted and not professionally produced.

“Our view is there is a whole space in between user-generated content and professionally-generated content that is local. is investing in giving local talent in cities around the world training and workshops in writing, filming, lighting, editing and wardrobe so they can put together professionally-produced user-generated content.

“We have signed up our first 26 people in Cairo, who between them have 150m people in their social networks and produce local content in a professional way and grow an audience that way. The big guys will never see them coming.”

McCourt says he never steps out of his domain of technology, media and telecoms (TMT). “Every time I leave TMT I get my ass kicked. It’s a tough game. Even a blind squirrel finds a nut once in a while, so we stick to the stuff we know about – triumphing in times of regulatory, technological and consumer change.

“If it’s all three together, we love it.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years