news-reg: the future doesn't look as good as it used to

[David Farber <farber () central cis upenn edu>]

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.