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news-reg: the future doesn't look as good as it used to
From: David Farber <farber () central cis upenn edu>
Date: Sun, 8 May 1994 20:16:08 -0500
Dept. of Utter Confusion: from telecomreg
TELCOS ON NOT-SO-FAST TRACK NEW ORLEANS -- Plagued by strategic and technical chaos, the telephone industry faces significant delays in its rollout of new markets, throwing its pursuit of cable markets into uncertainty. The new state of affairs was abundantly apparent at last week's Supercomm convention here, where frank discussion of the issues on the exhibit floor belied much of the packaged hype emanating from panel sessions and press conferences. "This [move to video] isn't going to go as fast as many companies want you to believe," said Jack Reily, vice president and general manager for access platforms at ADC Telecommunications, Inc. "By going to cable technology, the telcos got the fiber monkey off their backs," another vendor executive commented, asking not to be named. "But they're only now learning what they're up against with the fiber/coax approach."
and
TIME WARNER CABLE SLAMS ON BRAKES In what may become a familiar move among MSOs fearing a further crunch from rate rollbacks, Time Warner Cable imposed a cost-cutting campaign by freezing hiring, trimming capital spending by $100 million and launching a broader effort to reduce operating costs. The MSO said the cuts would not affect its plans to launch a switched video network in Orlando later this year. But it slow spending on other full-service networks and delay other upgrades and line extensions. Employees leaving will not be replaced, but "customer contact" posts -- about half Time Warner Cable's 15,000-strong workforce -- are exempt. Wall Street analysts estimated that Time Warner Cable's 1994 capital budget had been around $700 million, around double last year's spending of around $350 million. Meanwhile, at least one other large MSO is studying layoffs, and other operators reported that capital spending would slow down. However, cable operators' past warnings of capital cutbacks after the Cable Act first passed and again after the first round of Federal Communications Commission's rate rules still have yet to prove out. Officially, TCI has still "suspended" half of its $1 billion 1994 capital budget, but Lela Cocorus, the MSO's director of corporate communications, said, "We recognize we have to move forward as best we can and build our networks." Cable operators have few options, said Wendell Bailey, vice president of science and technology for the National Cable Television Association. "There's a finite number of dollars in the industry for a finite number of projects. Cut those dollars, and you have to redecide, reshuffle or cut back on those projects," Bailey said.
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