Response to Leebron’s Latest

David Leebron sent another email out to those alumni that had emailed him as well as posted the email up on the web for everyone to tear to pieces read. The letter in it’s entirety is available here. Although that does seem like a temporary URL, so I will include inline quotes from the actual message.

First, it bears reiterating that we are not selling KTRU.  We are selling the 50,000 watt broadcast license and radio tower.  This is not a trivial distinction.  We don’t claim of course that KTRU will reach the same audience, although the ability to reach audiences through the Web and in more places is growing rapidly. Some who wrote in objecting to the sale of the tower and license live well beyond its broadcast range.  They must understand that their access to KTRU will remain unchanged.  The critical question that must be asked is in what ways the student experience will be changed as a result of this decision.  Students will still manage the station (along with its general manager Will Robedee), design its programs and serve as DJs and announcers.  They may reach somewhat fewer people, but their audience will be increasingly global, and their opportunities for experience not significantly diminished. The question is not whether providing the KTRU experience is worth almost $10 million, but rather whether the difference between a Web-based-only format and the 50,000 watts justifies allocating all of those resources solely to KTRU.  In addition, we had to take into account that a radio broadcast license was most likely a declining asset over the long term as a result of changes in technology and consumer preferences for accessing music.

The points in bold are the ones that are interesting, in my opinion, and worth contending. From a birdseye viewpoint, either Leebron doesn’t understand the whole web radio idea or his advisors are misguiding him. The points I and others have made are pretty straightforward: (1) consuming media on the web is an active activity–radio is passive, (2) people don’t really listen to “radio” on the Internet… the Arbitron numbers Leebron references in his first email have much more to do with growing internet access than the web medium taking over, and (3) until the Internet becomes ubiquitous in consumer cars, there is still a market for radio activity (lawl at word juxtaposition, there).

I have lied when I said I have never listened to radio on the Internet. Back when I was in middle school, I tuned into a couple of Shoutcast channels in Winamp from India. I had a 56K connection so my experience was understandably frustrating, but at the same time, the whole idea of Internet radio has been around for ages. It’s not that the idea is good/bad, it’s just that we are not ready to replace conventional radio with Internet radio, yet. We can’t even guarantee 3G connectivity nationwide yet (if all cars were equipped with 3G radios and could use that to stream Internet radio, I guarantee you that latencies would be through the roof since the bandwidth is so low) and we are talking about the Internet taking over conventional radio?

With the proliferation of iPods and other mobile music players, how many people actually listen to radio while sitting down somewhere? The number of people who want to tune into some third party playlist from anywhere outside their car is extremely small, since there’s already music you know and like in those locations. Comparatively, not all cars are equipped with the functionality to easily tap into your mobile music library, which is why people turn to radio instead of carrying around a book full of CDs (all cars these days are equipped with CD players by standard).

Going back to the Internet > radio argument that Leebron makes, there are two technologies we are waiting on. The first is citywide Internet access, or WiMAX or 4G as it is also known as. WiMAX providers exist in a very limited number of cities in the U.S. right now. Houston is one of them, but there is only one provider (Clear) which means that they have a price monopoly (and they sure are charging it, at $40 a month). Let’s talk economics for a second, here. Do you think people will shell out upwards of $25/month when competitive WiMAX is available compared to free radio? According to Arbitron, in 2007, 3.4 percent of radio listeners tuned into satellite radio (think Sirius or XM), which was a paid radio service. That’s a tiny, tiny percentage. Let’s pretend that it has doubled since then (unlikely given economic conditions). Less than 7 percent of listeners of radio actually want to pay money to listen to radio. How viable is it that people will be willing to pay for citywide Internet access to listen to music on the go?

Secondly, there’s the whole client side perspective. If we pretend, for a moment, that ubiquitous Internet access is available for free for the entire population of Houston, you’ve still got the issue of tapping into the resource. The number of users who currently have Internet access built into their cars is minuscule. There’s no trend suggesting that will explode, either. For one, automakers aren’t going to start including built-in WiMAX antennae into their cars until the technology has invaded society. You’ve always got the option of buying a third party service, but going by the above numbers for satellite radio, one can make assumptions about how many people would invest in that technology.

The short of it is that radio isn’t just going to wither away and die overnight. There’s still a market for conventional radio until citywide Internet technology catches up. It will inevitably happen, but it hasn’t happened yet. The selling of this asset is premature at best, and the justification of it by pointing to Internet popularity is invalid. The number of Internet users is always growing. The slow growth of technologies that allow Internet radio from being accessible is what’s keeping radio still alive today, and it’s well and truly alive.

Second, I do want to address the issue of confidentiality and the lack of discussion or consultation regarding this sale.  This is indeed a serious objection.  We have tried since my arrival to have open discussion of both fundamental issues regarding the future of Rice and all important issues that affect students.  These have included every aspect of the Call to Conversation, and especially the expansion of the student body.  This openness was the policy we followed in our discussions about a possible merger with Baylor College of Medicine.  Input from students was critical in determining the size, location and design of our two new colleges and the renovation project in the south colleges.  This is certainly our preferred mode of making decisions, and the standard against which we should be judged.

Well since it is his preferred mode of making decisions, Leebron can hardly complain that we are judging the administration against the standard in this discussion. The only options they have is (a) admitting they were wrong in their process or (b) going back on their decision (which is just an extension of a). They can obviously choose neither of these options, which is most likely, in which case they’ll have to deal with the consequences of destroying the trust.

The special circumstances of conducting a bidding process for a broadcast license and negotiating the terms of the transaction required confidentiality. We sought advice about the best ways to conduct this process from those with deep experience in the sale of university-owned broadcast licenses.  They advised that we needed to have a confidential process. This troubled many of us, and we asked ourselves throughout the process whether we could bring students and others into it, but concluded that this would not be compatible with the negotiations we were undertaking and our ability to bring them to a timely conclusion.

This paragraph is long without saying anything at all. What are these “special circumstances” that are alluded to? Who did you consult that had such a deep experience that apparently didn’t do their research on Rice University and it’s ideals? Basically what Leebron’s saying is, “We had to be confidential because the process required confidentiality.” Why did it need to be confidential? What would happen if it weren’t confidential? Is it possible that people would have opposed the sale and hence broken it down? I would suspect that that’s the major reason, which basically means that they had the process be confidential so that none of the stakeholders could comment on the process and potentially derail the process. It seems the administration lied to the University of Houston Regents, as well: “We knew that some Rice students might be upset, but the way it was portrayed [by Rice] was that it was a small and insignificant number and that they would manage it. We never got the impression that it would cause an uproar.”

To me, this paragraph basically admits that the administration was aware that what they were doing was wrong (“this troubled many of us”) but decided to go ahead anyway because they’d rather get the cash than follow the precedent that they had set with involving the student community in discussions. It is an exaggeration, but this is akin to a democratic government suddenly acting in a tyrannical manner, something that should only happen in the deepest of crises.

Going forward, students and others are entitled to hold us to our word that this is not a precedent.  We believe that the confidential process we undertook was a necessity in these very specific and unusual circumstances.  We believe equally that this must be a very rare exception to our commitment to involving students in the decisions which affect student life.  Indeed, we have certainly taken note of the very strong feelings expressed on this issue, and thus might in the future strike a different balance between confidentiality and consultation even when the needs for confidentiality are high.

Like I said before, it doesn’t help restore any confidence if you say, “we heard you and we’ll remember it for next time.” This issue needs to be dealt with. Guarantees need to be made that the administration will not act in this manner in the future. It probably needs to go into the bylaws of the way the board of trustees acts because, frankly speaking, the trust that would allow the university community to believe these words has been shattered.

The bottom of the matter is the fact that the administration should have consulted the KTRU management prior to making a sale. It is entirely possible that the two parties could have sat down at a table and looked at ways to cut costs/increase revenues such that the asset wasn’t being “under-utilized”. Many have come out with suggestions–ranging from daytime programming by KUHC and nighttime programming by KTRU to adding shows that appeal to the masses more, such as to reach a compromise between the service KTRU provides and what Houston at-large wants. If KTRU hadn’t been a willing party in these negotiations, then the administration would have the ammo they required to go through with the sale, regardless, having made a legitimate attempt to engage the management with needs to change the way the station was being run. Instead, the administration chose to consult nobody and conduct all negotiations in secret, hence they are in the middle of this PR mess.

Third, I want to reiterate and perhaps amplify what we have said about the use of the proceeds.  A portion will be used to help fund the construction of the new servery for Will Rice, Lovett and eventually Sid Rich.  This has been a high priority for our students, communicated with passion and frequency over the years. (This is not, as some have assumed, part of the expansion of the student body, but rather part of our plan to improve the quality of our older colleges.)  It will enable us to markedly improve food quality and variety.  The majority of the resources will be applied in ways strongly informed by student input.  We expect this will include first and foremost support for KTRU as Web-based radio so that our students can operate a station on the cutting edge of technology.   We also expect that some of the resources will be used to expand media opportunities for our students more broadly, bringing to more students a more diverse array of choices in this arena.  Other uses, such as lighting an additional playing field, have also been mentioned repeatedly by the students as one of their top priorities, but no decisions have been made, nor will they be made without substantial student input.  It is not irrelevant in this context that the students have voted down KTRU blanket tax increases.  These votes have indeed indicated the need to expand our resources for student opportunities in other areas.

These are all viable uses of of the proceeds, although I would argue that the servery construction is related to the expansion plan. If I am not mistaken, Lovett was expanded to absorb parts of Baker’s New Wing and Will Rice had expansions made as well. These expansions may be marked down as “improvements to older colleges” but they are expansions nonetheless. It makes sense, then, that they will need a larger kitchen to serve the needs of the new residents. However, the question is raised as to why this servery must be built at this very moment in time, with the economy being in the state that it is. Surely, this is a time to be a little more conservative with new construction?

Also, as Danny Mee pointed out in his open letter, in 2004 the Rice Athletics program was losing $10m a year. That number may have grown due to economic conditions, but let’s assume that it has stayed the same. Wouldn’t a better fix be to cut down some of the spending on the athletics program, towards which most of the student population is apathetic anyway, and move that into a budget to improve student life? I can see where the building of an East Servery could theoretically be a pressing matter but other things such as adding lighting to another playing field is something that should probably be attempted when we are working at a budget surplus rather than a deficit.

Last, I want to address those of you who said you would likely withhold future contributions.  We regard each and every contribution as a wonderful act of generosity, and those from alumni as expressions of their love and gratitude for their Rice experience.  You are of course entitled to decide not to provide that support to Rice, and I cannot object to the choice you make.  But frankly, if all our graduates took the view that if the university makes a decision with which they strongly disagree they will not contribute, we would not receive any donations at all, and we would be a much weaker university and able to offer much less to our students. Some of our most generous donors have been people who over time have very strongly disagreed with decisions the university has taken.  But they have understood both that their desire to make our university ever stronger, and stronger forever, as well as their desire to return some of the benefits they feel they have received, argue persuasively for their continued support.  We cannot eschew all change, and all hard decisions, simply because some of our graduates feel so strongly that they threaten to, and perhaps ultimately do, withhold support. It will be a loss, and not only to our current and future students, but in fact to our alumni as well.  We urge you to continue to make your views known to us.  The passion of Rice students and graduates is one of our great strengths.  But so too is the fact that the vast majority of our graduates choose to support the university even when they take issue with particular decisions or directions.

In my humble opinion, the university is much weaker now because the views of the community–both current students and alumni–cannot be taken respectfully when making a large decision that affects a substantial amount of people. Leebron suggests that some of their most generous donors have strongly disagreed with the decisions the university has taken. I’d like to ask how many of these people continued to donate when those decisions were taken without any input whatsoever? The issue here is not as much the decision that has been made but the manner in which it was made. If the administration had attempted to engage alumni prior to making negotiations or even during the process, the final decision would have been an informed one. Even if the university decided at the end that the sale of the KTRU transmission equipment and license was the correct decision, alumni wouldn’t have been as miffed because they did get a chance to voice their concerns and know that the administration heard them.

What we have here is the administration acting unilaterally and then assuming that the community, despite disagreeing with the decision, will continue to donate regardless of the fact that they had no opinion in the matter. I would seriously question the motives behind making large donations to the university fund if the administration continually makes decisions on how to spend that money without making anyone aware of the decision process.

I think Leebron and the administration still have a lot of explaining to do and have to at least make an apology and admit that the process they followed was not in the best taste.

9 Replies to “Response to Leebron’s Latest”

  1. What you need to consider is the potential of the radio station. I think the last estimate made (about 30 years ago) was about 20,000 out of a potential 3 million odd potential listeners in their radius.

    What kind of conversion percentage is that?

    Forget about KTRU, forget about Rice. Think about the city of Houston. I think this new move will benefit the city in many ways. The 20,000 odd listeners will have to adapt, no doubt, but for people like me, a 24 hour NPR station is too much to pass up

  2. I’m assuming that you mistyped “3” years as “30” years ago because it seems highly unlikely that they would have those sorts of numbers available 30 years ago.

    Besides, you’re arguing a point that I didn’t opine about. I haven’t argued at all about the cultural significance of KTRU or why that experience should be protected. I am just contending point-for-points the excuses made by Leebron and the administration, one of which is that KTRU should be happy with the web medium as a leftover from a full broadcast station. The entire movement to web isn’t going to happen for a while now. Getting a head start now isn’t going to achieve anything because when everyone moves over, there will probably be newer technology relevant to the time (I’m talking about geographically-based Internet radio, a notion for which doesn’t exist right now).

    Why should I forget about Rice and the KTRU experience, being that I am a Rice alumnus? As others have mentioned, Rice would not have been able to sell KTRU for any amount of money if the whole movement hadn’t been begun by students in the first place. If KTRU hadn’t been as popular as it was back in its formative years, there would not have been any antenna donated that Rice is now selling off. What Rice has basically done is build a brand for free (apart from the cost of equipment) and then sold it.

    The Rice board of trustees is supposed to act in the best interests of Rice, not of Houston, by the way.

    It is your opinion, and possibly the opinion of many others that a 24/7 NPR station would be good. I am not one of them. When I commute, the last thing I want to hear is people blabbing away. Actually, scratch that, the last thing I want to hear is classical music. However, that’s not the point of discussion. Rice did not sell the KTRU equipment because the majority of Houston would like a 24-hour NPR station or because it’s the only large city without something like that in place. Those were the motives of the UH. Rice dumped the KTRU broadcasting abilities and license because it was an “underutilized asset”. That is completely related to the way Rice perceived KTRU internally and not related at all to how they viewed it as part of the Houston media scene. And you’ll notice that the main concerns I have are the manner in which they dumped the asset as well as the justifications they make, which don’t check out if you spend some time analyzing them.

    Antarius is Dhruv, by the way, right? I feel like that was your nickname back in the CollegeConfidential boards.

  3. And on the point of transparency and openness that Leebron hopes to promote going forward, why not then start providing more transparency right now by releasing the studies, financial analyses, Arbitron ratings, and other documents releated to the decision making behind the sale? The price is set, so any worries over changing price and negotiations are not a concern.

    Recent Arbitron panel members have not been aware that KTRU was being tracked, so was there really a recent Arbitron study commissioned by Rice?

    For the donations, it’s not like Rice alumni and students are saying, “Wow, this is really weird. The university has not been acting this greedily recently.” Wrong! In fact, the relentless tuition hikes, the undergrad expansion, the non-stop building, the merger with Baylor all show a beast with an apparent, insatiable appetite in the past 10 years. I have disagreed with many of these decisions but kept my donations flowing. Now, they finally will cease with this latest indignity.

    I feel like Rice ought to get a ticker symbol (is RICE taken?) and start trading on NASDAQ. They’re certainly showing the rent-seeking behavior of the greediest corporations.

  4. Thanks for your comments. I would definitely be interested in seeing the documents that were used behind the decision-making process that spurred the sale of KTRU to begin with, but something tells me this won’t be released to the public unless some entity legally asks them to be revealed (which may be plausible given that the buyer was University of Houston, which is likely to have some government ties).

    The Arbitron ratings in particular are very questionable. Evidently, to get Arbitron ratings you have to pay the company and then broadcast a tracking signal that is then aggregated. Given that KTRU operated under a non-commercial FCC license, I believe they aren’t allowed to endorse products, which meant that collecting Arbitron ratings would be a useless practice except for a case where they had to defend the station against a buyout…

    Rice has been expanding over the last 10 years and I do think some of the expansion is good. Getting better visibility outside the state is definitely a good thing, but at what cost? I am not against most of the expansion, but I think the administration could be a lot more tactful about it.

  5. What I think is really laughable is how the _bidding_ process apparently required confidentiality. That’s why all my actions are listed in the bottom of a locked filing cabinet, in a basement, beware of jaguar, etc- to make sure I get good bids from all potentially interested parties.

  6. Tino, you need to actually read the article before commenting next time. I’ve already addressed that issue: 3G connectivity in the US doesn’t take care of that (not to mention it’s a battery drain). Also, not all cars come with a stereo jack and not everyone has an iPhone or other smartphone. And finally, that still requires some investment of money to get it working which, as demonstrated by satellite numbers, is not something people are inclined to do.

    Also, some back of the paper calculations. If you had an hour’s commute every day and listened to a stream at 128Kbps, 20 days a month, you would be using the following amount of bandwidth:

    128Kbps = 0.015625 MB/s * (60 seconds in a minute) * (60 minutes in an hour) * (20 hours a month) = 1125 MB = 1.09GB.

    So if someone was to actually do this regularly, they would have to be in the top tier plan on AT&T (which is $30/month, if I’m not mistaken) and would only have another 0.91GB to use on other data before they get pushed up to another $30.

  7. Thanks sohum for pointing that out to tino, I was about to make the same point. ATT is changing their data plans to have you pay “a la carte” for the data you use. Streaming audio is heavily data intensive, which means very expensive. If I did not have an iPhone, as I would be willing to bet most people don’t, or was not willing to pay for the additional data, as many people won’t be, I’m SOL.

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