(A version of this memoir appeared in The San Diego Reader in 2019. The names of most players have been changed, partly for convenience, but also because of my bias: that is, I liked most of these people and want to protect them.)
Titanic Telecoms: The Early Years
There came a time in the early 1990s when I realized I needed to find a serious job. Or, failing that, a couple of really bad jobs.
I had part-time employment at UCSD but that was ending. And so I went off on a random walk that took me into an obscure, bizarre area of technology that no longer exists and is scarcely remembered: telecoms switching and reselling. Briefly I was an international telecommunications executive, with offices in London and Paris. Then everything crashed and burned, and in the final act I was sorting invoices for a quite different, but bankrupt, telecoms company in Seattle.
But to begin at the beginning: at UCSD I helped manage something called the “job listserv.” This was a mailing list showing employment opportunities at and around the university. You’d dial us up on your 9600bps modem—a modem was still something of a novelty in those days—and down would come a sheaf of job descriptions, beep-boop-boop.
Most of the positions were clerical and part-time, rather like mine (“Must have familiarity with e-mail”); laughable and contemptible in the best of times, though maybe not at this particular moment. A few were “real” quasi-professional jobs, either at the university or in a neighboring firm in Golden Triangle or the mesas. Any job that paid more than about $25,000 a year got hundreds of responses, with obsequious cover-letters and gilt-edged CVs.
It was so sad. I felt so sorry for these people I sometimes forgot I was about to be unemployed myself.
I spent my my last couple of weeks at the listserv applying to every remote possibility that showed up on our job list. I didn’t keep track of my applications, any more than I crossed my fingers over the want ads I kept answering in the Union-Tribune. Marketing Assistant, Operations Trainee, Whatever Technologist. Or: Night-Shift Graphic Designer at Kinko’s: now that I do remember, because it was up around Solana Beach, paid a princely $14.00 per hour, and 70 people had already applied, or so they told me.
When it seemed nobody wanted me, I looked at the calendar and saw it was October, about time to start applying to the “seasonal help” jobs at the local mall. I didn’t want to drive anywhere, so I was pretty much limited to University Towne Center, a sprawling shopping complex at La Jolla Village Drive and Genesee Avenue, and thus only a ten- or twelve-minutes’ walk from my apartment.
UTC was thought to be fairly upscale in those days because A) it pretended to be in La Jolla, B) it was anchored by a big Nordstrom’s, and C) it featured such choice eateries as Carlos Murphy’s and Tony Roma’s (“The Place for Ribs”). Needless to say, the bar for “upscale mall” has been raised a bit since those days.
Along with these big-footprint establishments were dozens of costume-jewelry shops, Thomas Kincade wall-hanging galleries, golf-souvenir emporia, a Warner Bros. Studio Store that sold cartoon memorabilia and animation cels; and so forth. Surely one of these places could take me on? They paid barely over minimum wage, but if I worked fifty, sixty hours a week I could get by for a few months, and I wouldn’t have to move back to my aunt’s in Newport Beach.
Besides which (I told myself optimistically) somebody was bound to see how smart I was, and they’d make me assistant manager . . . maybe by Thanksgiving!
So I put on an act of being a halfwitted and overeager job applicant. Clearly I overdid it, because only one shop took the bait. That was Williams-Sonoma, a tiny storefront hidden downstairs in one of the less desirable canyons of the mall. Near the dumpsters, in fact, down past Tony Roma’s. Today everyone knows Williams-Sonoma as a posh cookery chain where you can pay $300 for a coffee-maker, but back then it was just breaking out of the catalog business, a junior partner to Pottery Barn. It didn’t rate a location on the main level of University Towne Center.
I did not become assistant manager. No, my work mainly consisted of unpacking stock as it arrived—glassware, pasta bowls, spatulas, Kitchen Aid mixers;canisters of Golden Malted waffle mix, bearing a strange little bow-tied boy on the label; five times more dishcloths and aprons than we could possibly sell, and which we stuffed into every available crevice of the stockroom shelves.
I worked a plastic gun that affixed adhesive “SKU labels” to every double-old-fashioned glass and ironstone chili bowl. I restocked the shelves out front and put the trash out. And when the weekends got really busy, I’d be a greeter (“Welcome to Williams-Sonoma!”) and do salesgirl work on the floor. I didn’t want to do cashiering, which was fine because that job was much sought-after by all the chirrupy teenage girls. For some reason they thought working the cash register was high-status.
The pay was scandalously low, but you weren’t supposed to care, because you got a 20% discount on everything in the store, oh wow. And it was, like, just a seasonal job, you know. Years later I heard that San Diego traditionally had a reputation for underpaying everyone because they were being paid in “sunshine dollars,” a nice way of saying it’s a buyer’s market for overqualified employees.
My luck took a turn: a temp agency got me a job pasting up Yellow Pages ads for $10 an hour. I could quit the Williams-Sonoma gig, but decided to stick with it on nights and weekends. I ended up working 60-70 hours a week and breaking my health. On Christmas Eve I developed a fever of 104 and was completely laid up for days with flu and sinusitis.
More pathetic good luck: our UTC Williams-Sonoma won a sales prize! Yes sir, our shop had beaten out every other Williams-Sonoma in Southern California, in terms of revenue-per-square-foot for the Holiday Season. And every employee in our shop was to receive . . . a bread mixer! Oh boy. The number one culinary fad of the early 90s!
The reason we came in first was simple. We were the smallest Williams-Sonoma in SoCal. We had a sixth of the floor space they had up at South Coast Plaza. Why we had such a tiny space is a puzzlement. My guess is, at the Williams-Sonoma HQ they imagined that their “La Jolla” door was in a quaint seaside village, surrounded by postcard shops and crafts-jewelry booths. Up in San Francisco they don’t think there are any large conurbations south of Los Angeles. Many years later they got clued in, and W-S now has a much grander space, one that isn’t near the dumpsters.
Little Chuck Williams himself came by after Christmas to check us out and congratulate us. Because a lot of us hard-working employees already had bread machines, it was decided that we could alternatively take out our gift in other W-S merchandise. I chose a set of All-Clad cookware and some garlic roasters. Somebody told me that eating a lot of roast elephant garlic would be good for my sinusitis.
And then, suddenly and unexpectedly, I got a real job nearby, one with a decent paycheck. I kept working for Williams-Sonoma anyway on nights and weekends. Because I’d made friends there, and they were doing inventory in January and they needed me. But mainly, the work was so mindless, I found very therapeutic, like playing golf. You could think deep thoughts about the French Revolution and Napoleon while you broke down shipping boxes, or stuck SKU labels on hand-painted French wine carafes that looked like chickens.
The new job, across the footbridge over La Jolla Village Drive, was located in a building that said Smith Barney. I assume Smith Barney was a major tenant. I however was not going to work for Smith Barney. I was going to work for a strange outfit on the ground floor named Titanic Telecoms. That wasn’t its actual name, although that was what some of my coworkers in London called it when I was working over there a couple of years later. Actually we went through a succession of five or six names as we changed our branding and got swallowed up in mergers.
In theory, Titanic was a low-cost alternative long-distance company (like MCI and Sprint in those days) although it fancied itself a high-tech firm doing important R&D. There were a number of small telecoms companies like this in the San Diego area. Most went under or merged with a major player by decade’s end, or else they moved into the mobile or internet business. Titanic got gobbled up by a company that merged with MCI WorldCom, which subsequently crashed in the biggest bankruptcy in American history. Low-cost long-distance was an industry with a very short half-life: the companies all tried to undersell each other, couldn’t make a profit, and then everyone had a mobile phone and then mobile service got cheaper and cheaper.
The reason I ended up at Titanic is that I had responded to a Union-Tribune ad (or maybe a listserv posting) seeking a “marketing assistant.” But Titanic Telecoms really wanted me as an operations manager. The two people I interviewed with told me I had “a solid technical background,” because I’d had “that computer job” at UCSD.
I had a queasy feeling that I was getting into the most colossal screw-up of my life—I was in over my head. Only I couldn’t back out because the pay was so good!
When I first went over there for the interviews, I was still dizzy from my fever. Floating in and out of my daze, I thought, “I’m not making sense, this is the job interview from hell.” I was sure I was babbling. I kept forgetting what I was saying. And then, coup de grace, I did some gallows humor about how I was working for minimum wage over at Williams-Sonoma, where we had just won a sales competition . . . and everyone got a bread machine . . . but I needed to get a real job soon, or I was going to have to go back to Newport Beach and sleep on my aunt’s folding couch. (Not true, by the way: five-bedroom house on Balboa, with no one but my aunt and her cats.)
My interviewer’s face lit up when I said “Newport Beach” It was like the Groucho Marx duck coming down. I’d said the magic woid.
This made no sense to me, but very little did right then. I will explain all later.
I settled in quickly at Titanic Telecoms, or whatever they called themselves. And I didn’t screw up, or at least nobody noticed if I did, because everyone else was equally at sea. It turned out almost everybody got hired in the crazy-ass way I did. Lulu Kelly, our HR director, had her secretary open the mail as it came in, and toss the resumes into a big slush pile. Then she just ignored them until the day came when she had to hire someone. Then she’d riffle through the pile and pick out a likely prospect.
And so, a guy who applied for a job as an administrative assistant got hired instead as head of marketing. And the middle-aged CPA who applied for the position as accounts-receivable bookkeeper, well they made him director of the call center instead.
For a long time I put this all down to the inept, improvisatory way everything seemed to happen at Titanic Telecoms. It was only after I’d been there a year that I realized what was going on. As per instructions from the company head, Lulu only advertised for low-level and clerical positions. That way she didn’t have people coming in, waving their lunker-school MBAs and demanding $100,000 to be a middle-management drone. Lulu would place ads for cruddy jobs that looked as if they paid $20-25k, then she’d cherry-pick you for a more substantive role and offer you $40k. You’d think you’d really lucked out, and oh boy you’d be a hard-working, loyal employee for months on end! It was a brilliant hiring strategy.
The downside was, some people got their noses out of joint when new hires immediately got moved up the totem pole. In some places this might be a morale problem, but we got around it by just letting the old-timers stew and sulk for a couple weeks . . . then we fired ’em.
Yes, we hired at whim, and fired just as quickly. Molly, the VP of Operations and thus technically my boss (although in reality most people directly reported to Molly’s brother J.J. Hughes) sometimes stopped by in the morning and dropped off beepers and parking-garage passes on my desk. Sometimes she gave a brief explanation, very la-di-da: So-and-so was fired because he gave himself admin rights on the database. Or: Thus-and-such was canned because she moved her PC and monitor without permission. Or: J.J. told me to fire all the AS/400 programmers, so I did.
This was the way Molly’s brother J.J. liked to do business, and nobody dared countermand him. J.J. Hughes was an intense fellow who lived mostly on Diet Pepsi. What he liked to do best of all was to fire a few PC and telecom-switch techs every week, and then maybe hire them back the following day. What he liked to do second best was sit in his glass-fronted office in that Smith Barney building, and interview young engineers (some of them filched from UCSD) and talk for hours about the arcana of telephony: DS3s, and T1s, and Signaling System Seven.
Because of J.J.’s flashes of brilliance, scattered enthusiasms, and Diet Pepsi addiction, I privately diagnosed a fierce attention-deficit disorder. But that might be just me projecting.
Anyway, J.J. dreamt of making Titanic into an R&D leader, a great Skunkworks of the comms industry. He wanted to invent his own digital telephone switch, instead of leasing those million-dollar Siemens DCO switches that were always the biggest expense on the company financials. This dream would eventually lead the company down a dark and winding path of ill-conceived innovation.
One day J.J. decided there were too many techs for him handle directly, and the company really needed a Chief Information Officer. So he told the Executive Vice President, and the EVP told me, and I called my friends at Robert Half, who came up with a cheerful, garrulous East Indian then working in Omaha. Supposedly “Dr. Sooch,” as he liked to be called, had a PhD in something software-related. He also claimed to have an MBA from the world-famous Harvard Business School (in a field that the B-School does not grant MBAs in, as it turned out: this was one of those loosely affiliated “executive program” MBAs).
Sooch and I became fast friends. We’d go out to Mongolian grill in the evening, and he’d tell me about how he grew up in London and went to Harrow, where he was in the same form as Rod Stewart. He hadn’t a trace of a British accent, but no doubt he shed that like a bad tooth. I mean, he was a subcontinental; they can do that.
And then he was “at Harvard,” where he was a grand friend of Bill Gates, during Bill’s only year at Harvard College. Sooch had a nice little story about how he and Bill would stay in their dorms during Thanksgiving holiday time, and live on cheap ramen noodles.
The ramen story is a good one; a similar tale appears in the brilliant TV series Breaking Bad. Obviously it reflects a certain university reality of the 1970s and 80s. Problem here is, Bill Gates dropped out of Harvard College fifteen years before Sooch took his spurious MBA degree.
Dr. Sooch was our first CIO, and he took his job very seriously, calling meetings every day, issuing direction to all the ops and tech people, including Molly and me, and the programmers, and the fat, grouchy wirepullers who serviced the LANs and PCs. These PC techs were tough guys, however—repurposed construction workers—and they were used to reporting to J.J., the Big Boss, directly. They weren’t taking any guff from this dizzy little Hindustani. So the bruisers got together at Molly’s house in Del Mar one weekend and wrote up a manifesto, demanding that Dr. Sooch be sacked.
Come Monday, Sooch saw the memo and went to J.J. “Can I fire them?” he asked.
And J.J. said, “Sure, it’s your call.”
So Dr. Sooch fired the wirepullers, and next day J.J. fired Dr. Sooch.
It was a really convenient way to clean house. J.J. never hired another CIO, or another Indian.
Later on, during my my London phase, when I was working for J.J.’s father, I happened to mention Sooch. The old guy knew all about the Sooch episode in San Diego. He shook his head in disgust. “I warned him, I warned him,” meaning J.J, “you have to steer clear of these Indian engineers with their fancy degrees who talk a good game but can’t do a damn thing.”
In the event, however, Dr. Sooch took his revenge by walking off with a $10,000 IBM ThinkPad laptop that was pimped out to the max. I was tasked with phoning him up and making him give the laptop back. Sooch smoothly assured me he didn’t have it. Really I couldn’t blame him.
Sooch and I stayed in touch for years after this, in London (which he always seemed to be passing through) and Seattle (where he kept promising to get me an interview with Bill Gates) and Los Angeles (where we roomed in a bad airport hotel and he wanted me to share his bed). Once, during a London sejour, he promised to take me and my friend out to a fine gourmet dinner. When the day arrived, our white-tablecloth evening somehow turned into a quickie lunch at a Burger King in Oxford Street, with Sooch dressed in his tracksuit as usual. He was a scoundrel and an operator, but I liked him.
* * *
One of the many slowly-dawning realizations about Titanic Telecoms was that nearly every significant managerial post was held by a member of J.J.’s family. His sister Molly was supposedly VP of operations, while Molly’s husband headed sales in something called “operator services.” J.J.’s father ran the Miami office, until the company went international and the old man moved to London.
And then there’s J.J.’s mother, a wraithlike, dithering soul. She was given a sinecure that involved walking through our offices and ensuring that no one had pinned or taped cartoons or clippings to their cubicle walls. During one of our office moves I was temporarily using a vacant, unused cubicle around the corner from my office. The old lady came through and wagged her finger at a Dilbert cartoon some previous tenant had taped up many months before. “You’ll have to take that down,” she said. “J.J. doesn’t like that.” Did she mean that particular Dilbert episode, or the joke therein, or the fact that someone had used Scotch tape? Along with his ADD, J.J. had must have had some type of obsessive-compulsive affliction about clippings on cubicle walls.
My favorites in the extended J.J. clan were the Scottish in-laws. J.J. was married to Fiona Robertson, daughter of two hard-bitten Scots from the Firth of Forth. Fiona, mother of two, was a blonde hottie who had a fitness show on cable TV. You could tell her parents had been pretty hot numbers themselves, some thirty years back. Fiona’s mother Rita always dressed to the nines. It was a tech company, so most people dressed for shit, but here was Rita in an Hermes scarf and Chanel suit. She officially held the post of assistant HR director. As you might gather, it was a busy job, though not necessarily a demanding one. Rita was the one who gave you paperwork when you were hired and then photocopied your credentials and made you a company ID badge. If you were a person of some import, she’d pass you over to me to get a garage pass and a beeper.
One day J.J. became obsessed with making every employee wear an employee ID. He ordered his mother-in-law to enforce this, threatening automatic termination. This had less to do with J.J.’s obsessive-compulsion than with the fact that we were hiring and firing so many indistinguishable Mexican and Vietnamese call-center people, we no longer knew most of our employees. So everybody had to wear a badge. Rita would creep up and bawl you out if you didn’t have your badge on.
I rebelled, said it was nonsense. Rita would cut me me slack because I’d stand out on the terrace and smoke with her, and we’d trade company gossip. And she told me about Edinburgh in the 1950s. She’d known Sean Connery. Everybody knew Sean Connery, or Tom Connery as he was then. “He was a show-off,” she said. “That doesn’t mean the same thing it means here.” I nodded in incomprehension.
Rita was a really furious cigarette smoker, like someone circa 1958: articulated forearm jerking cig-to-mouth like a windup toy. Puff-puff-puff. I wasn’t much of a smoker, but I saw the advantage of smoking breaks and company scuttlebutt. I’d bring Rita a carton of full-strength Silk Cuts from the Duty Free when I was flying back and forth from Heathrow.
Then there’s J.J.’s father-in-law, Rita’s husband Bob Robertson. He ran the “zero-plus” division of the company, which installed pay-phones in motel lobbies and bars. In physical aspect Bob was something like the film actor Pete Postlethwaite, but he wasn’t as smashed-up. Bob’s payphones were just like normal payphones, only they were on our network, and they charged you a heavy premium if you tried to make a long-distance call without using a calling card or special access number.
Nowadays you might say Hahaha, serves you right for using a payphone. And you’d be right. But in 1992 people still thought you shouldn’t be ripping people off with pay-phones, which most Americans had grown up to trust as a reliable sideline of Ma Bell.
The other part of Bob’s business was signing up small-time motels to use our service. As with the pay-phones, you always paid through the nose if you dared make a long-distance call. This was a sweet deal for the motel owners since they got half the money.
A business model like this wouldn’t work at a serious hotel chain like Hilton or Radisson, but people staying at little ma-and-pa hostelries in the desert weren’t business travelers auditing their hotel folios. They’d seldom complain about a $25 phone call to Palm Springs, and they probably weren’t going to come back to this dump anyway.
I thought of the Hughes-Robertson clan as land pirates, a throwback to ages ago, a family at odds with the world. “Arrgh, belay ye, varmint. Take yer last fifty hires and keelhaul ’em overr La Jolla Village Drive!”
Is this is a viable model for running a company or even a family? President Kennedy’s family was a bit like this. His parents and grandparents had a sense of this: an awareness that you had enemies everywhere, and they were going to knock you down, and so the family had to stay together and join battle against the world. In much the same way we here have the Hugheses and the Robertsons, families who are mainly Irish, and Edinburgh Scots, and they know the outside world is filled with monsters and enemies, and hesitate to give them any quarter.
* * *
Outside J.J.’s extended family, there was an outer circle of loyal associates, people who had been working for him for years, since back in the days when the company was a rare-coins telemarketer, before it turned into a long-distance carrier. And then there were people like Lulu, who’d known the family since the olden days when they all lived in Newport Beach. So there’s the Newport Beach connection. As I suggest, I had a certain level of presumed authority and job security because people in the company had the vague impression that I was an old associate of the J.J. Hughes clan.
I recall an old Jewish office-furniture dealer up in Newport Beach named Bernie, who was dunning us for some painting work and old chairs when I first started. I took the calls.
“Tell him to go to hell,” said J.J. “We’re not going to do any more business with Bernie Cantor!”
Five months later we expanded into our new space and needed about a hundred desks and cubicles. And our vendor was the very same Bernie, and he was giving us a sweet deal to make up for the fact that he’d given us a hard time. Fair enough; J. J. said okay.
Bernie came with his son that big construction weekend when we set up the new call center, and they even helped unload their furniture vans.
Good old Bernie, an old business associate from up Newport-way!
But there was a little problem with Bernie and Son’s sweet deal: they brought us a lot more grey-melamine desks than we needed or could store. They didn’t want to take them back. This overload was part of the Sweet Deal.
So I had the moving men stick the extras in any available nearby office. Come Monday morning, I had a very incensed new hire in the form of Mr. Bob Zrkynia, a senior manager who’d just moved from Tampa Bay. Bob was expecting a brand new office in our brand new building, but instead was presented with a rat-maze with his desk at the back.
“WTF is this? What am I here, a quartermaster?” he said when I dropped by.
I couldn’t control my laughing; he did look pretty ridiculous, stuck back there.
Bob’s self-importance was high comedy by itself. His attempts at comedy were always misfires. After working hours I was coming back across the LJVD footbridge in my running gear (I was preparing for a 10k; it was late; I wasn’t going to get back into my dress and heels) and who’s here but Bob Z? He’s giving me the once-over and making smartalecky remarks like, “What, is this the new office wear?”
“It’s six p.m., Bob.”
You wouldn’t get this kind of dumb crack from the Hughes-Robertson combine; they were pirates but they were cool.
I kept running into Bob out there, on the winding path that connected our Titanic Telecoms buildings to the Rusty Pelican and the footbridges across La Jolla Village Drive and Genesee Avenue, etc. , etc. He would tell me his sorrows, figuring that since I’d stored a dozen desks in his office, I owed him at least a willing ear.
He’d moved to a 5000 square-foot rental house in Rancho Santa Fe where he was paying $1200 per month, but somehow his 9-year-old kid didn’t have any neighbors to play with. Yes, Rancho Santa Fe, where you can’t see the house next door and probably have to drive to get there. It would seem Bob didn’t do much reconnaissance before moving from Tampa Bay.
But Bob wasn’t going to be in Rancho Santa Fe, or with the company, for long. Later in the week I found an internal e-mail printout by the laser printer. It was J.J.’s brother-in-law nastily complaining about Bob Z: “I THINK THIS GUY IS WORTHLESS AND IT’S BECOMING MORE APPARENT EACH DAY…. WHY DON’T YOU JUST PAY ME $70000 A YEAR AS A CHARITY CASE AND I’LL GO AWAY?”
By the time I found this out, Bob was canned. He wasn’t part of the Hughes-Robertson clan, and he wasn’t even from Newport Beach.
* * *
For decades, J.J.’s family had run some kind of manufacturing business in Orange County and L.A., making high-voltage power transformers used by the military. I never knew what that meant, but I figured it was a kind of defense subcontracting.
Nevertheless, like many a likely lad, in his early 20s J.J. struck out on his own as a distributor of illegal substances. He got nabbed for dealing—no more than a few kilos of cocaine—and he went to prison for a little while. J.J. knew perfectly well that he had blotted his copybook for life, and he was going to have to stay in the background of any company he built. This made him secretive, and eager to surround himself with unblemished front-men who could take meetings and sign the financials.
J.J.’s conviction was one of those revelations you encountered when you went to work for Titanic Telecoms. Few people outside the family knew the details of the drug bust, and the usual tale was that it was a couple of ounces of cannabis sold to some surfer dudes.
Actually it was quite an elaborate cocaine-distribution scheme, but few of us found out about this until another company was thinking of buying us, and needed to do due diligence, and the criminal case case came out in black-and-white. This was still the pre-World Wide Web days; you couldn’t just do a quick Google search of someone you were curious about.
When I joined the company, Titanic was expanding far and fast, and talk of an initial public offering was in the wind. Company revenues were doubling every six months, but we’d taken on enormous debts, beginning with our leases on three million-dollar Siemens switches set up in North America, and new offices and facilities opening up in Europe and Australia.
I gathered that J.J.’s hope was to go public, quadruple the size of the company, and then sell it before the bottom fell out of the telecoms-reseller market. But an IPO meant SEC filings and top-level auditors (ours were Ernst & Young), and that meant getting a Chief Financial Officer with an impeccable track record to sign the financials.
And so a CFO/EVP arrived, in the form of a suave CPA who had just done the Dell Computer public offering in San Antonio. He looked a lot like the film actor Joel McCrea, circa 1940, if Joel McCrea were ever to portray a bespectacled financial executive.
Our Joel was patient and persevering, perfectly willing to stand in queue for a half-hour outside J.J.’s office when J.J. wanted to talk to some techs for a while. Techs outranked chief financial officers in J.J.’s world.
We came up with code phrase for cooling our heels outside J.J.’s office: “I’m going over to Toon Town.” Toon Town was a newish ride at Disneyland, based on the Who Killed Roger Rabbit? cartoon. Joel and his wife had been there with their two kids, and they were quite familiar with the long waits.
At Titanic, our Joel looked like a complete fish out of water, but he was an ideal front-man. He could fly off to Wall Street or take an early morning meeting in downtown L.A. (in some place like Hamburger Haven on Flower St., that being the only nearby eatery open at 7 in the morning), and do credible negotiations for bridge capital or a potential acquisition partner. People on the outside would meet Joel, and see what a solid, good-looking straight-shooter he was. And they’d never have an clue what a flaky company Titanic Telecoms was.
In the fullness of time, of course, a few outside executives got close and serious. They sniffed out the truth, and quietly backed away.
By the time Joel had been at Titanic for a year-and-a-half, it became apparent than an IPO was not going to happen. So he looked for an acquisition partner. And he found one, or thought he did. The company directors on the other side wanted to know about J.J.’s drug conviction. And so our slimy little in-house lawyer came by and dropped a fat legal brief on Joel McCrea’s office chair.
It detailed the prosecution’s whole case for the 1982 cocaine bust in Newport Beach, and was pretty amazing. J.J.’s sister and brother-in-law owned a women’s jewelry-and-beachwear shop in Newport, a couple of blocks from the pier. Out front there were some earrings and sundresses, and in back, a cocaine dealership that was open for business for an hour or so each evening. There wasn’t much business of any kind in the daytime. The cops—and it’s unclear whether it was DEA or local police—surveilled the shop for about six months before arresting J.J. and the brother-in-law.
J.J. and his sister’s husband were good businessmen, keeping careful books, and hiding their payment ledgers in a vacuum-cleaner filter. Nevertheless they failed to notice they were under surveillance. Kids, you know. So J.J. went to state prison for a few years, while the brother-in-law got off on probation.
As I was saying, Titanic Telecoms was hoping to do a merger. However, when they got to this point in the story, the acquisition partners’ interest evaporated. Not that they didn’t like J.J. or the company. There are some folks you might love to have as party friends, but you just can’t list them as officers or owners of a publicly traded company.
After that penny dropped, our finance star, the simon-pure EVP who looked like Joel McCrea, started to look look for a more credible enterprise where he could hang his hat. He quickly found one in a new mobile-communications firm.
* * *
By this point I’d moved to London (and briefly, to Paris) for fun and advancement, but came back every few months to San Diego. In the back of my mind was the thought I might need to come home and maybe try to get a job with Joel McCrea’s cell-phone network.
But there were curious developments afoot in 1995 and 1996. Somebody had decided that these low-cost long-distance providers such as Titanic Telecoms and its several local rivals, were a menace, and needed to be driven out of Dodge.
It was around early 1996 that I came back for a few days and found the company all a-flutter because a certain personality on local TV had chosen to attack Titanic Telecoms specifically for an imaginary and unlikely crime.
It began with a large-bodied, rather blowsy blonde named Marti Emerald, whom I’d frequently seen at Samson’s Delicatessen. That was an L.A.-style, quasi-Jewish deli I sometimes went to for lunch because they had great sandwiches and matzoh-ball soup. (Gone now, alas.) Marti was not the sharpest tool in the shed. Nevertheless she eventually parlayed her TV presence into a brief political career as San Diego city council member.
Her TV presence was as “Consumer Watchdog” on the evening news. Now, in San Diego there was never much room for Betty Furness-style consumer-advocacy TV journalism. Because, what can you expose? Rat droppings at the supermarket? The pristineness of Lucky and Ralphs was ever a wonder to behold. Much of the SD economy is either straight military or defense-related, so it’s well beyond the peeping eye of TV journalists.
Nevertheless Consumer Watchdog Marti heard a vague rumor about a practice called “slamming,” which small-time long-distance carriers supposedly indulged in. Supposedly these long-distance companies scooped up local customers and switched them to their own crappy long-distance service without their knowledge. And then maybe the customers would find out and demand to be switched back. So they’d get switched back to their old carrier briefly, but then the crooked little company would “slam” ’em back again.
And who do you suppose was the main perpetrator of this fraud, according to Marti Emerald? Of course, our very own Titanic Telecoms.
Without dwelling too much on technical details, I will say this Consumer Watchdog was talking through her hat, just babbling rumors with no basis in fact. Because as a practical matter, such fraud is virtually impossible. When you signed a new customer to your long-distance service, you had to get an LOA: that’s a letter of authorization; either on paper, or via a telephone authorization which we recorded and stored on tape cassettes. Armed with these authorizations, our database managers would then add these local customers’ telephone numbers to the Titanic Telecoms database. (Every once in a long while our database might go down and be restored with data from the night before; and in such an instance it was theoretically possible for a very recent LOA to be missed. But that is a different matter from “slamming.”
Lacking technical knowledge, Marti Emerald fortified her misinformation by focusing on a human-interest angle. Thus, at Titanic Telecoms we were said to be preying upon poor Mexican and Vietnamese immigrants by having them targeted by our Mexican and Vietnamese telemarketers.
All smoke and mirrors, of course. But there was a was a hidden hook in this lurid TV coverage. The scandal-mongers were onto J.J. Hughes’s cocaine conviction, back when he was about 23 years old, and they were going play this non-story for all it was worth. They put out the story that not only had J.J. been a cocaine dealer, he actually had vanity license plates that said CRACK. That much was true, perhaps; but it was completely unrelated to the telecoms business.
There was a delicious irony here. Beyond his half-dozen daily cans of Diet Pepsi and an occasional cigarette in the evening—outside the Smith Barney building on La Jolla Village Drive—J.J. was a most abstemious CEO. If he had a vice, it was in his wild technical imagination, which led us down some strange roads.
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J.J. sent around a e-mail one day, and it was positively mystical. I didn’t save it, but as I recall it went something like: “I had a vision last night, it was so obvious yet so profound. Why are we bothering with these telecom switches when all they are, are computers? Yes! We have the software, let’s just feed it into a rack of PCs!”
And so began the PC switch project. Stacks and stacks and racks and racks of, basically, IBM PC-style computers—probably HP or Compaq—in whatever the microprocessor of the season was (8088, 80386, 80486?). And we hired a string of electrical engineers to convert telephony software into something PC-usable.
At first conception, the idea seemed brilliant. Unfortunately it overshot the capabilities of PC microprocessors and circuitry of the early-mid 1990s. The fundamental problem was scalability. Your homebrew PC-based switch might work with a hundred or even a thousand users, but past that mark it was bound to fall down. In the actual event, it seems they were always falling down, even with a handful of customers.
What sticks in memory is when we were trying to sell our service to high-profile clubs and restaurants in London. The West End in particular made for a very attractive target, since there were so many venues in a concentrated area. And in Great Britain people were familiar with alternative long-distance companies (e.g., Mercury) that charged less than British Telecom and required you to stick a device between your phone set and the wall jack.
Three days after setting up our device at Planet Hollywood, we were getting furious telephone calls: “Take this out! Disconnect this immediately!” They were not at all happy. Not only did their long-distance calls often not complete; our software compressed the sound so much that conversations were scarcely intelligible.
I found myself wondering: “How did we ever get this far? I left the company shortly afterwards and never found what became of the PC telecom switch project.
It may have been steamrollered by bigger crises, mainly public relations problems that were coming at us from all sides. In England and Australia, this took the form of industry rumors that our sales force was made up largely of ex-convicts.
Doesn’t that sound nice? It wasn’t entirely untrue, but there’s a big “but” there. Some of our guys in London and Sydney had been directors of English companies that went belly-up. In America, corporate bankruptcy may be regarded as a misfortune, but in England (to paraphrase Oscar Wilde), it looks like criminal carelessness. Because, you see, there’s an automatic presumption of fraud. So if your limited company goes into receivership, you may well be awarded a six-month holiday as a guest of Her Majesty.
Which is how we got some of our finest salesmen. No one else would take them on.
In America, our PR crises became constant, usually revolving around those nebulous “slamming” accusations I talked about before. It wasn’t just the Consumer Watchdog lady on the local TV news; eventually there were articles in the Union-Tribune and the L.A. Times, rehashing tales of complaints filed with the California Public Utilities Commission.
So far as the commission went, we thought we had a reliable friend in Sacramento in the form of state senator Steve Peace, who was trying to make a name for himself as point-man in utilities regulation. (Peace already had some renown as the youthful producer of the horror-comedy Attack of the Killer Tomatoes; but now he was past 40 and looking to add a bit more gravitas to his résumé.) But then, out of the blue, Peace turned on us. Without bothering to do any investigation — or give us a phone call, or even notice that Titanic Telecoms had donated to his last election campaign — he started issuing rote denunciations of our company and the long-distance industry in general.
So one day, I returned to San Diego from London and found J.J. and company counsel and two or three of the other top executives, huddled together all day in J.J.’s office, trying to hash together a cringing, pleading letter to Steve Peace.
“What’s going on in there?” I asked Lulu Kelly, our HR director.
“Oh, Steve Peace said a lot of stupid things, and now they’re trying to get him to take them back.”
Gradually, painfully, Titanic Telecoms took a lower profile and receded from the news. I ended up moving from London to Seattle, where I worked for another overleveraged telecom outfit, but I still had a storage unit near Old Town, and would check in with J.J. and pals from time to time. They gave up their sumptuous digs along La Jolla Village Drive and moved to a new headquarters way out in Scripps Ranch. And eventually got themselves gobbled up by a series of greater fools, ending with MCI WorldCom, which, as you know, went fabulously bankrupt in 2002.
This was almost exactly as J.J. Hughes had planned. Low-cost long-distance was an industry with a short lifespan, and Titanic Telecoms got out just in time. J.J. saw the future, yes he did; and he ate it.