Bell Atlantic leads a local
revolution
By John Borland
Staff Writer, CNET News.com
October 7, 1999, 12:10 p.m. PT
Q&A NEW YORK--When the head of one of the nation's
largest phone firms dismisses ordinary telephone service
as becoming "incidental," one can be sure a
telecommunications revolution is underway.
Chief executive Ivan Seidenberg is reconfiguring his company
to such an extent that Bell Atlantic's new national wireless
and data focus may overshadow its primary local phone
business in a few years, he said in an interview with CNET
News.com today.
This vision is not unusual, as telecommunications companies
move toward offering advanced services and dabbling in fields
outside their traditional expertise. The long distance and local
phone companies--AT&T, MCI WorldCom, SBC
Communications, and others--are striking deals left and right
while planning integrated packages of voice, video, and
Internet services to better compete in the market.
Unlike AT&T, which seeks to establish a national local phone
network, Bell Atlantic aims to push its wireless and data
interests, but not necessarily its local phone business,
outside its regional boundaries. Yet federal regulators could
keep the Bell's nose to its local grindstone, as they have
already required SBC in its merger with Ameritech to expand
its local service in 30 markets outside its region.
Under Seidenberg, Bell Atlantic has been a deal-making
powerhouse, sealing a merger with GTE, which owns local
phone properties in 40 states and has a thriving national data
business. The Baby Bell also agreed to create a joint
coast-to-coast wireless phone venture with recently merged
Vodafone AirTouch.
Today Bell Atlantic took a near 20 percent stake in
Metromedia Fiber Network, a fiber-optic firm that will give it
access to high-speed data networks in metropolitan areas.
This follows its application to the Federal Communications
Commission last week to offer long distance service in New
York--and analysts believe it will be the first successful bid by
a Baby Bell.
At the Internet World '99 industry trade show, CNET
News.com asked Seidenberg about his company's expansion
plans and about the consolidation wave that is sweeping
across the telecommunications industry.
NEWS.COM: Will you use today's Metromedia investment
to expand outside of your home territory?
Seidenberg: There are a few things that Metromedia helps us
do, such as follow our multinational customers to other cities.
To the extent our customers are out of region, we will serve
them. Remember, GTE already offers service in 40 states
around the country.
Will the company offer customers voice service in new
regions in the United States, the way SBC
Communications has promised to do?
I think voice becomes incidental to data. We're really focused
on building a national wireless presence, a national data
presence. I think in three to four years, voice becomes
incidental to that.
Will the merger between Sprint and MCI WorldCom
affect Bell Atlantic's business at all? Will you have to
grow your business to compete?
[Sprint and MCI WorldCom] is an expected move, a response
to the industry in general. But in this particular case, I think a
few things need to be looked at very carefully. One of those
things is the timing of this--the assumption that this could
happen and be approved before Bell Atlantic is able to offer
long distance is disturbing. And the consolidation of Internet
assets before we can offer long distance is unthinkable.
Are there other acquisitions you need to make?
I think there are places in the business where we
continue to build scale. We need to build by getting
into the long distance markets.
On wireless, look where we were with respect to
wireless assets. Now we've done that deal [with
Vodafone AirTouch]. But wireless data is now a brand
new market. This is a never-ending mosaic.
Do you need to acquire wireless data companies,
then?
I'm not sure there are any wireless data companies out
there that are ready. But wireless data is going to be
fun. It's going to be the same things that we saw driving
the voice wireless market over again.
Bell Atlantic has previously been very interested
in convergence of voice, data, and video, with an
early focus on interactive TV. Do you still see the
company interested in that space?
Our focus is really more on the network side. Our
strength is to bring the technology out, add network
services, and all of the things that go along with that.
The difference today is that back then it looked like the
telephone industry was moving toward the cable model.
Now we're applying the Internet model. We've really
skipped going through the cable model. You see those
companies offering subscribers 100 or 500 channels or
so. Bell Atlantic's role will be more on the Internet side,
offering access to the Internet.
Is the government, and particularly the FCC,
helping or hindering the introduction of
broadband services?
It's not helping. But that's inadvertent, I think. If you go
to Wall Street, you find that companies that have light
regulation or no regulation are valued higher. Those of
us that carry lots of old regulation have constraints.
You can see what MCI WorldCom, with its high-flying
stock, is able to do.
Some Bell companies, like US West, have
complained that Wall Street hasn't valued them as
highly as start-ups, even though they have similar
high-speed Internet technology. Do you feel the
same way?
What we've learned is that if the Street perceives things
one way, all the whining in the world isn't going to
make it any different.
The Street said a year ago we needed to fill out our
wireless footprint. We tried, and couldn't do it then. But
now we have. The issue is, you can't complain about
not getting credit for something. You just have to go out
and do it. |
