SHARE:
Telecommunications
Florida utilities had a good year as well. After years of downsizing, the largest of the old-line telephone and electric monopolies stopped hemorrhaging jobs in Florida in 1996. Florida Power Corporation, Florida Power & Light, GTE and BellSouth - which have shed thousands of jobs in the 1990s - all reported that the overall number of employees at their companies had stabilized. For the first time in several years, GTE and BellSouth may finish 1997 with more employees than they had at the beginning of the year, as the companies staff up to offer a host of new services.
Telephone and cable service became truly competitive in several key Florida markets in 1996. The pace will accelerate dramatically this year, despite a federal court stay to a rule governing interconnection agreements between local phone companies and their would-be competitors. Businesses in Florida's larger metropolitan areas will be inundated with offers bundling local, long-distance, wireless and data-transfer services. Consumers in those areas will be offered various combinations of cable, local phone service and Internet access. Most service providers will promise to be "one-stop-shops" for all their customers' telecommunications needs, and in a few cases that will actually be true.
In the Orlando area, where BellSouth and Sprint service areas collide, large business users have been treated to a preview of what the rest of the state can expect as some 40 companies vie for the $5.7 billion in annual revenues now divided among Florida's 13 phone companies. Business customers in the Orlando area say they are being offered discounts as high as 40% on their local phone service.
Serious competition
The mid-November launch of MCI local service for mid- to large-size businesses in greater Orlando should ratchet competition another notch. MCI's entry into Florida's local market closely followed its announcement of plans to merge with British Telecommunications plc, which will create a company with vast financial resources.
Others muscling into Orlando include Tampa-based data network integrator Intermedia Communications, which has rapidly transformed itself into a full-service telecommunications company and now offers local and long-distance service to its corporate clients in Jacksonville, Fort Lauderdale, Miami, Orlando, Tampa-St. Petersburg and West Palm Beach. Intermedia's work force has ballooned to almost 800 from less than 300 a year ago. "That's not going to stop," says Intermedia founder and vice president Barbara Samson of the rapid buildup. "Our customers want a total package, and bundling more services on our network gives us tremendous economies of scale."
Meanwhile, the cable industry is aiming its first efforts in Florida at residential consumers. Continental Cablevision began offering ultra-high-speed Internet access in Jacksonville last fall and will offer access in Pompano Beach this month. The company also is preparing to roll out residential phone service in those areas early this year and in southwest Florida by late 1997.
"We're still doing marketing studies on how to bundle" phone, cable and Internet access, says Continental's regional telecommunications manager A.R. Schleiden. If Continental's Internet pricing is any indication, consumers can expect a discount for taking the whole enchilada: Continental's Internet access costs $45 a month for non-subscribers, but $35 a month for subscribers.
Comcast will roll out its version of Internet access, called @Home, in Sarasota early in 1997, also for about $40 a month.
In the Tampa Bay area, GTE began offering long-distance service in April, cable service in Clearwater in June and Internet access shortly after that. The company also is one of the first to offer billing that allows a customer to include everything except cable service - paging, cellular, local, long distance and even in-flight phone calls - on a single bill. "We're essentially through with our downsizing," says Peter Daks, president of GTE Florida.
BellSouth and Sprint have launched Internet access services, and BellSouth is negotiating franchise agreements to provide cable service in several central Florida counties as well as in Dade County. The company hopes to be one of the first of the regional Bells to obtain permission to enter the long-distance business. "We've been very aggressive about fulfilling the FCC prerequisites," says BellSouth spokesman Spero Canton. "We've opened our market to competition. We have interconnection agreements with everyone except AT&T."
For the time being, Time Warner has called a time-out on its plan to offer local phone service to its 1.6 million subscribers in the Tampa and Orlando areas. Time Warner is more than halfway done installing the equipment necessary to offer phone service, but is holding back in the wake of the court stay of the FCC interconnection rule, says Leslie Carter, general manager of telecommunications for the Tampa Bay area. But the pullback may have as much to do with Time Warner's big shareholders as with the court decision. Some have pressed the company to get out of the capital-intensive cable business in the wake of Time Warner's $7.6 billion acquisition of Turner Broadcasting, and Time Inc. President Richard Parsons told Wall Street analysts in October that divesting the cable operations was his top priority. Still, Time Warner is proceeding with plans to offer high-speed Internet access, which will be available to Tampa subscribers for about $40 a month in the first half of this year, according to Mark Bailey, online services manager for the Tampa area.
Personal communication
In the wireless world, which continued to add subscribers at the rate of 40% in 1995, power users craving the latest technology, called PCS (Personal Communications Services), that would allow them to transmit voice, data and even video with their cellular phone, were put on hold for most of 1996. In November, PrimeCo Personal Communications, a limited partnership between AirTouch Communications, US West Inc., Bell Atlantic Corp. and NYNEX launched services in Fort Lauderdale, Jacksonville, Miami, Orlando and Tampa. "The technology used by PrimeCo has proved a bit difficult to deploy," says Richard Prentiss, telecommunications services analyst with Raymond James & Associates.
Powertel, which employs a different digital wireless technology, had better luck. It launched its version of PCS - featuring wireless telephone, numeric paging, voice mail with notification, caller ID and call waiting - in the Jacksonville area in October, at prices competitive with cellular service without any bells and whistles. Cellular companies are responding by beefing up the digital capabilities of their systems, blurring the distinction between cellular and PCS. By mid 1997, phones capable of transmitting both PCS and cellular will hit the market. "That's when PCS service in Florida should really begin to take off," Prentiss says.
