Craig McCaw Biography

Craig O. McCaw was born in Centralia, Washington, the second of four sons of Marion and John Elroy McCaw. Over the course of his career, Craig's father would buy and sell dozens of radio and television stations. He often incurred large debts in the process, but the family lived well.

As teenagers, all four boys worked for one of their father's small cable television services: climbing poles, stringing cable, and selling subscriptions door-to-door. Their father sold the boys one tiny, 2,000-subscriber system in exchange for shares of preferred stock in the company. Craig soon took the lead in managing the company. Although Craig was dyslexic, he made an extra effort in school both at his prep school in Seattle and at Stanford University, where he studied history. While at Stanford, he continued to run the cable company from his dormitory room.

When Craig was still a sophomore in college, his father died, leaving a heavy burden of debt and taxes. Over the next few years, Craig's accountant mother was forced to liquidate all of Mr. McCaw's holdings except for the one cable service in Centralia, Washington which had been left to the boys in trust. After graduating from Stanford, Craig borrowed money against the Centralia system to buy other small cable operations in remote areas. He improved programming, raised rates, and cut costs. In the next few years, Craig's strategy for the cable TV operation paid off: while revenues quadrupled, the cash flow from operations grew eight-fold.

In 1981, McCaw began to research the cellular telephone market. Even according to AT&T's modest projections, the local permits sold by the FCC were greatly undervalued. Craig started bidding on cellular phone licenses. He planned a major expansion, but to do this, he needed more capital than McCaw Communications could ever earn from its modest cable television business.

Throughout the 1980s, McCaw sold shares in his company to larger enterprises: Affiliated Publications, E.W. Scripps Co., and finally British Telecom. In each case, the McCaw brothers kept control of the company in their own hands and in some instances bought back the shares, as their own operation grew to dwarf some of its former partners. At the same time, the backing of these established firms enabled McCaw to acquire a credit line of over a billion dollars.

The local phone companies, or "Baby Bells," created when a federal court order broke up AT&T's monopoly on phone service, had expected to dominate the infant cell phone industry. They were shocked to find that an unknown cable television operator from the Northwest had already acquired the licenses they needed in strategically chosen markets. McCaw borrowed massively to buy more and more licenses. He sold at a profit the licenses he couldn't use, and rolled the money back into purchasing more, gradually putting together the pieces of a national network.

In 1986, MCI Communications sold its cellular and paging operations to McCaw for $122 million and McCaw Cellular emerged as the industry leader. The McCaw brothers sold their cable television business outright for $755 million, to concentrate solely on building a national cellular phone network. They took the company public, putting 11 percent of the company in public hands while the brothers retained roughly 40 percent.

In 1989, McCaw outbid Bell South for control of LIN Broadcasting. It cost $3.5 billion, but McCaw had acquired licenses in the very markets he needed to consolidate his system. It would now be impossible for a serious competitor to enter the field.

Wall Street looked with horror at the company's gargantuan debt, but McCaw knew he could resell individual cellular licenses at a profit to any of the regional Baby Bells. Meanwhile, revenues doubled, operating cash flow rose, and the number of subscribers exploded. McCaw himself earned $54 million in 1990, making him America's highest-paid chief executive. Less than one percent of this was paid in salary, the rest was due to increase in the value of his shares in his own company.

In 1994, the McCaw brothers sold their company to AT&T for $11.5 billion. In the process, Craig McCaw himself became one of AT&T's largest shareholders, but he refused to sit on the Board of Directors because he can't stand long meetings. Before selling his company, McCaw personally took over one of its subsidiaries, Teledesic, with the intention of building a global network of 840 low-altitude satellites to provide Internet-like transmission of digital data to the most remote places of the Earth.

Away from the office, Craig McCaw is an avid aviator who routinely pilots his own jet. He is active in environmental and civic affairs in his home state of Washington and has invested millions in a campaign to convert a run-down industrial district of Seattle into a vast urban park. In 2003, McCaw founded Clearwire, a wireless broadband Internet service provider. A fast, portable alternative to the cable modem and DSL services provided by cable television and telephone companies, Clearwire uses WiMAX wireless technology to transmit from a network of mobile phone towers. Users can access the Internet wherever they are, without connecting to a land-based cable or telephone system. McCaw, who serves as Chairman of Clearwire, took the company public in March, 2007. As of this writing, Clearwire is active in dozens of U.S. markets, as well as Mexico, Belgium, Denmark and Ireland.

Craig McCaw and his wife, Susan Rasinski McCaw, make their home in Seattle, Washington. They have three children. Mrs. McCaw, an investment banker, was a major fundraiser for the presidential campaigns of George W. Bush. From 2005 through 2007, the McCaws lived in Vienna, Austria, where Mrs. McCaw served as the United States Ambassador.