'Baltimore is Convergence City'

March 26, 1995|By Michael Dresser | Michael Dresser,Sun Staff Writer

Here will be fought the first all-out battle of the American

telecommunications revolution.

When Comcast Cablevision disclosed last week that it would spend more than $100 million to upgrade its three suburban Baltimore networks, the announcement was about more than infrastructure. It removed all doubts about where the strongest players in the nation's cable and telephone industries will first collide in a struggle that will define how Americans communicate in the 21st Century.

The results are expected to be thousands of jobs, new services and perhaps even lower prices to consumers. And while some of the reasons the battle will be joined here are happy accidents, a key factor is that a Maryland government agency made what appears to have been a smart policy move.

Unless the key players change their plans, the battle should reach its peak in 1996 and 1997 as construction and regulatory skirmishing give way to actual competition.

It won't be a simple, two-sided fight. A half-dozen companies have been closing in on this area from different directions, each seeking a share of what could soon be the most competitive telecommunications market in the country.

As David Nevins, a spokesman for Comcast, put it: "Baltimore is Convergence City."

Clearly, nobody is converging more relentlessly than Bell Atlantic Corp., the company that provides local phone service to virtually everyone in Maryland.

Bell Atlantic holds a strongly entrenched position in the local market, but it won't be content to remain on the defensive. Widely regarded as the most aggressive and technologically sophisticated of the regional Bells, the Philadelphia-based company hopes to seize a sizable chunk of the cable television business. Its long-term ambition is to penetrate long-distance service.

Arrayed against it will be the most formidable joint venture in the telecommunications industry -- the telephone expertise of Sprint Corp. and Teleport Communications Group linked with the cable television experience of Comcast, Tele-Communications Inc. and Cox Cable Communications. Baltimore is where it will roll out its concept of a single provider for cable, local telephone, long-distance, wireless phone and even on-line services.

MCI Communications Corp. will be trying to carve out its niche as well. The nation's second-largest long-distance company is laying cable all over Maryland as it gears up to compete for local phone business through its MCI Metro unit.

AT&T recently emerged as the high bidder for the Baltimore-Washington license in the recent auction of radio spectrum for wireless "personal communications services" (PCS), a kind of New Age cellular. It is also pushing for a bigger share of the in-state toll call business.

MFS Communications Co., the company that made the critical breakthrough by winning permission to compete against Bell Atlantic for local business customers, now says it is interested in the residential arena as a wholesaler to the multitude of smaller carriers it expects to operate here.

SBC Communications, the former Southwestern Bell, has put its plans to compete for local telephone business in Montgomery County on hold, but it remains a wireless player through its Cellular One subsidiary. It would surprise nobody in the industry if SBC were to sell its Washington-area cable properties. Comcast, among others, is interested.

Other players include Nextel Corp., which is building its own wireless telephone network, GE Rescom, a General Electric subsidiary that is undercutting Bell Atlantic rates at large apartment projects; and UltraVision LLC, a tiny upstart company that is seeking a second Baltimore cable franchise to compete with TCI's United Artists Cable.

Last week, when Comcast held a press conference to announce its up grade project, Gov. Parris N. Glendening got the chance to bask in the political glow as he praised the cable company's decision to invest $100 million to $130 million and create 200 jobs in Maryland.

Ironically, the state official most responsible for Comcast's decision wasn't invited and wasn't mentioned by name. But without Chairman Frank Heintz and the other members of the state's Public Service Commission, Comcast might have been holding its press conference in another state.

Last year, in the MFS case, the PSC became one of the first state regulatory agencies to open the door to rivals to the local telephone monopoly and grant them equal status with the incumbent. With that move, Maryland attracted the eye of the entire telecommunications industry.

"Maryland's ahead, and that's why you see spending coming here first," Comcast chief executive Brian Roberts said.

By itself, a favorable regulatory climate would not be enough to push Maryland ahead of New York, Illinois and other states that are quickly opening their markets. One of the reasons is the mix of players here -- not just the companies but the personalities behind them.

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