Crossing traditional lines for comprehensive service

Flux: The Internet and regulatory changes bring rapid advances in all forms of communication.


January 23, 2000|By Mark Ribbing | Mark Ribbing,Sun Staff

Baltimore is a city of constants: Cal Ripken is in the lineup, Democrats have a lock on local government, and TCI is your cable company.

The former two showed staying power in 1999, but Tele-Communications Inc. is being replaced by Comcast Corp., the longtime suburban cable king and recent acquirer of properties throughout the mid-Atlantic region.

Such is the nature of the telecommunications industry in 2000. The big will get bigger, and the changes will keep coming.

Who provides your local phone service? Bell Atlantic, right? Well, yes -- for now. Bell Atlantic wants to be your long-distance phone company as well, and may get permission this year to break into that side of the market.

At the same time, the company stands to lose more local-service customers to other phone companies, such as Comcast. That's right, the cable company is dabbling in the phone business, selling both local and long-distance connections on a trial basis in apartment complexes throughout the area.

This whirl of flux and expansion shows no sign of letting up, either in Maryland or nationwide. The enormous telecommunications sector brings together phones, television and the Internet. Asked if anything was likely to slow the industry this year, Towson University economic analyst Anirban Basu answered promptly. "I don't really see any obstacles. Why should there be any? People will continue to invest in this technology, and they have to."

The more complicated question is the degree to which Maryland will share in telecom's riches.

"It seems like the state is being driven by national and international trends, by companies like AT&T and WorldCom that aren't necessarily based in Maryland," Basu said.

However, Maryland has long been recognized as having a promising high-tech profile and a tech-savvy populace. Basu said Maryland has the third-highest Internet usage rate in the country, behind Alaska and Colorado.

"What we're likely to see is that Maryland will be fertile ground for people looking to sell over the Internet," he said. "The question is, will those types of companies look to locate here?"

Expanding companies

The state does have a growing contingent of Internet-related companies. One is Corporate Technology Group Inc. of Hunt Valley, which helps companies with Web-site development, Internet voice transmission and other online services linked to electronic commerce, known as e-commerce.

"We've seen really big growth in the last four to six months, and that's continuing into the new year," said Ann E. Quinn, the company's vice president for business development. "More and more companies are looking to accomplish their goals via the Internet."

Among Maryland's new Internet-driven companies, perhaps the most avidly watched will be Corvis Corp. of Columbia, which seeks to use optical technology to allow networks to handle increasing Internet transmissions.

The company is the creation of David J. Huber, whose last start-up, Linthicum-based Ciena Corp., had a record-setting initial public offering and became the state's most prominent telecommunications equipment maker.

Last year, Corvis built itself up in relative secrecy. This year, it plans to begin taking in revenue and deploying its gear.

"The business outlook looks pretty robust for us," said Glenn Falcao, Corvis' executive vice president. "Data traffic and Internet usage for e-commerce are showing exponential growth."

It isn't just the newcomers trying to make a buck or two in the telecommunications field. Lockheed Martin Corp., the classic big-ticket weapons maker, is looking to jump into the satellite communications services industry by taking over Bethesda neighbor Comsat Corp.

The complex takeover has faced numerous hurdles, not least Lockheed's own wobbly fiscal health. Still, the companies hope to get the required congressional approval of the deal this spring and tie the knot by mid-year.

Of his company's multibillion-dollar foray into telecommunications, Lockheed spokesman Charles P. Manor III said, "Clearly it's an area the company cannot afford not to look into."

One of the hottest areas in telecommunications is wireless telephone service. So far, the promise of universal, untethered phone access has been marred somewhat by patchy connections and confusing price schemes. Herschel Shosteck, a Wheaton-based wireless industry analyst, said the situation will show gradual improvement this year.

"We're going to see more low-cost family plans and lower-cost phones, as usual," Shosteck said. "We're going to see slow improvements in network quality."

Bell Atlantic's bid

Among more traditional communications sectors, the big story in Maryland this year could be Bell Atlantic's attempt to offer long-distance service. That bid is expected to come before the Public Service Commission now that New York regulators have allowed Bell Atlantic to branch into long-distance service in that state.

"Hopefully [the New York decision] will give us a blueprint for entering long-distance in Maryland," said Sherry F. Bellamy, president of Bell Atlantic-Maryland Inc. "We hope we're there by the end of 2000. We've been saying this for two years now, and it's overdue. It's been a more difficult process than people thought it would be."

PSC Chairman Glenn F. Ivey said, "We want to try and move the process along so that we can facilitate local competition."

Ivey said there will be other telecommunications matters on his agency's plate, perhaps including a review of long-distance companies' advertising claims.

"There's a lot of confusion out there as far as whether 5 cents a minute is really 5 cents a minute, and that may be something we need to deal with," Ivey said.

Pub Date: 01/23/00

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