Telecommunications companies and their customers are on the
verge of the most sweeping revision of the nation's
communications landscape since the breakup of the Bell System in
In a frenzy of deal-making capped by Sprint Corp.'s
announcement Tuesday of an alliance with three of the country's
biggest cable television companies, the industry's biggest
companies are forming partnerships that are likely to give
consumers and businesses alike a broad new range of
communications options during the next decade.
The trend is also playing out in Hollywood, where three of the
regional Bell telephone companies are said to be near
announcement of a video programming venture with Michael Ovitz,
the most powerful talent agent in the entertainment industry.
Near term, the Sprint alliance and others like it are being
driven by a deadline this week at the Federal Communications
Commission. On Friday, companies intending to bid on licenses for
a new generation of wireless "personal communications services"
must disclose their partnerships.
These new wireless services are expected within a few years to
link cellular telephones, portable computers and pagers and at
prices far lower than those available today.
But ultimately, the new partnerships will affect much more
than wireless communications. Each alliance, in its own way, is
intended to further the goal of one-stop-shopping for many
services _ local and long-distance phone calls, cable television
and high-speed data communications _ that are not currently
available from any single company.
"The timing for all this is wireless services," said Dennis H.
Leibowitz, telecommunications analyst at Donaldson Lufkin
Jenrette in New York. "The broader goal is forming alliances for
national brandname services in telephony and entertainment."
For consumers and business customers, the coming changes could
mean lower prices and a broader variety of services, as companies
compete to attract subscribers.
But for the communications companies, the future is full of
risk. They are about to place billion-dollar bets in a highly
competitive game, in many cases through hastily arranged
As this process unfolds nationwide, the once-sacred
distinction between local and long-distance telephone service is
being obliterated. Local phone companies mean to branch out into
cable television and long distance services, cable companies plan
to offer phone service and long-distance carriers intend to
invade the local markets now under the control of telephone and
In all cases, wireless technology is seen as only one of
several key elements in a package of communications services.
Nowhere is that more evident than in Tuesday's announcement by
the nation's third-largest long-distance carrier, Sprint, based
in Westwood, Kan., which teamed up with Tele-Communications Inc.
of Denver, Comcast Corp. of Philadelphia and Cox Enterprises of
The three cable companies plan to upgrade their existing
networks, which serve neighborhoods with a total of 30 million
homes, in order to offer both wired and wireless telephone
The cable companies already control the Teleport
Communications Group, an operator of fiber optic networks in 19
cities that compete against local telephone companies for
specialized business services.
Sprint and its partners intend to compete in the FCC's coming
auction for wireless licenses and to use the cable television
systems to tie together both wireless and wired telephone
The new venture marks the most ambitious effort yet to act on
the promised convergence between telephone and cable television
Analysts said that Sprint and its cable partners could end up
spending $2 billion or more to modernize their networks and buy
the wireless licenses. …