GI

"CableLabs drove innovation through a unique collaborative model: a royalty-free licensing system that avoided patent lawsuits and complex payment schemes—the downfall of many tech agreements. This approach helped DOCSIS cable modems spread globally at remarkable speed. CableLabs could sublicense the technology to vendors on the same royalty-free basis, opening the door for smaller players to enter the market and increasing consumer choice. It also reduced reliance on dominant suppliers like GI, which charged for licensing its digital video-compression tech. With no threat of patent litigation, engineers could build on competitors’ designs, cut R&D costs, and speed up improvements."

"GI was one of the first companies to market with UHF tuners, introduced in the 1950s and ’60s to allow TVs to receive ultra high frequency (UHF) channels (13 through 48) beyond the original very high frequency (VHF) band (channels 1 through 13). GI had stock that was overvalued at the time, and the company wanted to use it to buy something. Jerrold, it was discovered later, had some financial irregularities, always to the upside, of course, since accounting “errors” rarely make a firm’s finances look worse rather than better. So GI had used inflated paper to buy an inflated business. Less than a year after the Jerrold acquisition, GI was in trouble. It had bought a series of businesses, which wasn’t working, and, worse, now General Instrument was struggling to stay current on its loan payments."

"percent of its equity to TCI for our digital Headend in the Sky (HITS) distribution network, making Liberty Media, through TCI, GI’s largest shareholder. The stock walked steadily from $12 to $50, and Liberty later raised its stake to 18 percent by buying 10 million shares from Forstmann Little & Co."

"On December 17, 1997, GI announced $4.5 billion in orders from nine cable operators including TCI, Time Warner, Comcast, Cox, and others. In addition to the 15 million set-top boxes, the cable operators would also receive warrants for a 16 percent stake in GI. This single order—three times GI’s $1.8 billion in revenue—would guarantee the company’s profitable future, especially since the same operators would look to GI for maintenance parts and upgrades. As part of the deal, in 1998, GI traded 10 ⁠"

"On December 17, 1997, GI announced $4.5 billion in orders from nine cable operators including TCI, Time Warner, Comcast, Cox, and others. In addition to the 15 million set-top boxes, the cable operators would also receive warrants for a 16 percent stake in GI. This single order—three times GI’s $1.8 billion in revenue—would guarantee the company’s profitable future, especially since the same operators would look to GI for maintenance parts and upgrades."

"When we returned to Denver from the CableLabs trip to the West Coast, while Bill was in talks to invest $1 billion with Brian, I called an old friend at GI, Ed Breen, who had worked on digital technology at the GI VideoCipher division. Ed got his start at GI selling converter boxes and rose fast to be SVP of worldwide sales; less than ten years later, he would be running the company as CEO. “Gates can make these boxes for three hundred dollars,” I blurted out to Ed almost as soon as he answered the phone. Of course, he raised the specter that Gates would simply subsidize the cost until the industry was in his stranglehold. I knew that GI needed a hit as badly as we did. Even though GI discovered the breakthrough for digital compression, business was hurting because cable operators, TCI among them, had put off costly upgrades in the rounds of rate cuts following the 1992 Cable Act, which had crimped cash flow. GI had about 60 percent market share in TV set-top boxes but wanted the new digital business. Ed said that the best price on the box at the time was $400, more than double the cost of a typical analog box. “Okay, let’s get serious about it,” I said. “How many do you have to be buying for and by when, to get your price down to a three-hundred-dollar price?” Ed knew the specs and pricing of the box better than anyone, and I trusted him. “You know, if you ordered ten million of these things, we could get the ball rolling, because that would be a three-billion-dollar purchase order.”"

"As we were talking through the troubles at Jerrold one day, Monty asked me straight-out if I’d like to run GI’s Jerrold myself. I was getting tired of being a consultant and never seeing my family. If Leslie and I moved to a nice neighborhood in Philadelphia, maybe we could build a more stable home life without all the traveling. I could be president of Jerrold, the third-largest U.S. cable operator and one of the largest divisions in GI. I’d be the one making the decisions, rather than simply whispering in the CEO’s ear."