Communications meeting is outlet for skeptics

April 20, 1994|By Michael Dresser | Michael Dresser,Sun Staff Correspondent

NEW YORK -- The national information infrastructure, last year's "Highway to Heaven," is looking more and more like "The Long and Winding Road."

With the collapse of the Bell Atlantic-Telecommunications Inc. merger and other deals, investors and executives at this year's Alex. Brown & Sons Media/Communications Seminar have shed the optimism of 1993 and are looking skeptically on grandiose visions of the nation's telecommunications future.

From the traditional newspaper industry to the technological trend-setters of the Digital Revolution, companies at the Baltimore-based investment banker's three-day conference were openly groping for a new sense of direction.

"The pendulum has swung," said Salim A. L. Bahtia, president and chief executive of BroadBand Technologies Inc., a North Carolina-based company that designs advanced fiber-optic networks to carry interactive digital multimedia services to the home.

He was speaking very specifically about a shift in telephone company sentiment toward a less expensive but perhaps less versatile network architecture, but the statement summed up the prevailing sentiment with uncanny accuracy.

Dave Olson of Potere Management, a family investment company based in Houston, said yesterday that the mood at this year's conference was decidedly more downbeat than last year's, which he called a "buying frenzy."

"Last year we had a dedicated direction and this year I'm very confused," Mr. Olson said.

With stock prices down and interest rates up, investors were in a fractious mood. Ambitious technologies, such as the electronic "newspaper of the future" being developed by Knight-Ridder Inc., were met with skeptical questioning.

Investors and executives alike complained that government regulation was helping to stifle the development of a national information infrastructure.

John R. Alchin, senior vice president of Comcast Corp., denounced the Federal Communications Commission's recently announced rules for rolling back cable television rates as "draconian" and "confiscatory" and predicted "a long and ugly battle in court." Other speakers criticized the FCC, now led by Clinton appointee Reed Hundt, for delays in issuing rules for auctioning off parts of the radio spectrum for wireless phone services and in ruling on telephone company requests for permission to offer video services.

Thus, when Secretary of Commerce Ronald H. Brown delivered the luncheon speech yesterday, he was working a tough house.

Mr. Brown denounced as "utter nonsense" the idea that the national information infrastructure would not be built because some deals have fallen through -- an apparent reference to the aborted Bell Atlantic-TCI merger and Southwestern Bell's canceled plan to invest $4.9 billion in Cox Cable Communications.

"This administration is going to help -- and not hinder -- the construction of sophisticated information networks and the broad use of information technology in this country," he said.

But the audience, which offered only tepid applause, was not moved.

"I don't think he convinced anyone," said Judy Reed Smith, managing partner of Atlantic*ACM, a money management firm in Boston.

Mark Roberts, a telecommunications analysts at Alex. Brown, said his firm is just as enthusiastic about the prospects for communications and media companies as it was last year even though some institutional investors are more cautious.

"The smart operators have not changed their deployment strategies at all," he said. "if anything, they're accelerating their plans."

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