Electric avenues: telecommunications reform breaks down old barriers and creates new opportunities - Telecommunications Act of 1996

Entrepreneur, June, 1996 by Cynthia E. Griffin

* 21ST-CENTURY IDEAS

With funding in the works, the next thought for most entrepreneurs is, What kind of business can I create? Andrew D. Ory, owner of Priority Call Management Inc., is excited about the opportunities he sees.

"By opening up competition and no longer legislating market share for service providers, the telecommunications bill enables companies such as ours to look at a rosier future," says Ory, whose $6.4 million Wilmington, Massachusetts, company has created a software-hardware product that enables calls to be easily transferred from cellular. phones to pay phones to conference calls.

The best opportunities exist in the cellular arena, says Ory. His company will begin working with wire-based and wireless telephone service providers who will now want to link networks of cellular and wire-based telephone services. "Previously the government said you could only have two cellular providers in every market, which created a duopoly," he says. "Those two companies handled an enormously profitable market and did not have a lot of incentive to offer services."

Deregulation will stimulate competition for consumers and more business for firms like Ory's that can provide the infrastructure needed.

Housel is particularly interested in the idea of creating small phone companies. "For example, you could go to an apartment owner and set up a phone company for that apartment. We do the billing, and it would be cheaper because we don't have the large overhead the [big] phone company does," explains Housel, who thinks such a small system could be maintained with one technician. Deregulation will also make it easier for individuals to buy or lease trunk lines (digital lines that handle multiple phone calls), he says. Trunk lines are needed to operate a phone network.

Housel also believes entrepreneurs can successfully persuade big phone companies to lease or sell them their low- or no-profit services in rural communities, as long as the small businesses can guarantee a return and the same quality.

William Ray, superintendent at the Glasgow Electric Plant Board in Kentucky, foresees a day when every home will have a PC and be hooked up to the Internet, offering unlimited opportunities for entrepreneurs--like the grocery store concept, for example. "There's really no need for a 50,000-square-foot store," he says. "I know what [groceries] I need every week. If an entrepreneur could create a virtual store, I could click off what I want and tell them when I want it delivered."

* TARGET MARKETS

Another provision in the telecommunications reform act spells opportunity for savvy entrepreneurs. The Snow-Rockefeller amendment, cosponsored by Sens. Olympia Snow (R-ME) and Jay Rockefeller (D-WV), is designed to ensure that schools, libraries and public health facilities are not passed over by the information superhighway. The provision mandates that the cost for these entities to hook up to the Internet be affordable.

What does this mean for entrepreneurs? Since schools, libraries and health facilities will be charged lower rates to be connected, their incentive to get on the Internet may be greater than for private businesses paying higher rates. This could be a huge market, and small businesses can get in on the ground floor. And since entrepreneurial companies with low overhead can more easily offer lower prices for their services, they're ideally suited to serve budget-conscious schools, libraries and public health entities.