Hostetter , Media One part ways

NEW YORK — Continental Cablevision founder and CEO Amos Hostetter on Wednesday quit the cable operator, now known as MediaOne, after a disagreement with the cabler’s new owner US West Media Group concerning the location of the company’s headquarters.

US West, which acquired control of Continental for $10.5 billion in late 1996, decided to shift the head office from Boston to Denver, where the telco is based. In a statement, Hostetter said he quit because of “irreconcilable differences” with US West management about the implications of the move.

Hostetter declined to comment further and US West execs declined comment, although US West Media Group CEO Chuck Lillis told analysts on a conference call that he wanted MediaOne management “just down the hall” from him. US West stock fell $1.56 Wednesday to close at $22.25.

But the argument about the headquarters may also reflect US West’s desire to transform MediaOne into a more customer-focused business, which some believe is not a strength of Hostetter or any other cabler exec.

Merrill Lynch analyst Jessica Reif said Wednesday that Hostetter was “highly regarded in the industry,” having built Continental into one of the biggest and best-run cablers in the country before selling it to US West in a deal that made him personally a billionaire.

“I don’t think there is anyone better at assembling and clustering terrific cable footprint but the question is, now that you have the footprint, where do you take the business?” said Steve Lang, a spokesman for US West Media Group.

MediaOne “needs to become more customer focused and very efficient at marketing the heck out of new markets and services,” Lang said.

“Cable guys are not very good at rolling out new products,” said one Wall Streeter, who added that Lillis needs to “shake up” Continental and change its mentality from that of the traditional cabler.

Lillis is considering hiring a marketing exec from a consumer products company such as Nike to improve MediaOne’s marketing, sources say. Lang declined comment.

US West named its London-based wireless operations president Jan Peters to succeed Hostetter. Lillis also reshuffled the responsibilities of a couple of other MediaOne execs and appointed a marketing officer from cellular phone company AirTouch.

Reif said Hostetter’s departure was a “modest negative,” but she added that the cabler could benefit from having a “fresh pair of eyes” overseeing it and she noted that Peters had “been in a competitive business like cellular.”

All of the 150 people in the MediaOne head office in Boston will be offered jobs in Denver, US West said, although it’s unclear how many will decide to make the move. Hostetter is believed to have argued that too many of these people would quit MediaOne rather than leave, so the move would cost the cabler a lot of talent.

But one person close to US West downplayed that assessment, noting that MediaOne employs 10,000 people total.

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