Danger everywhere

Challenging the incumbents. This week's Special Report ranks major metropolitan markets by how attractive they are to new service providers (see story on page 112). If you work for an incumbent service provider, you'll want your major markets to be grouped at the bottom of the list. If you're a new competitor, you'll want to target the top of the list.

Needless to say, large markets tend to be competitively attractive, so incumbents would do well to be particularly vigilant defending their large city bases. Some incumbents are more vulnerable than others.

Take a quick look at the top nine markets (the 10th is Cincinnati).

Chicago, Ameritech's crown jewel, is one of the top nine (No. 4 in the competitive rank). Atlanta, the big belle of BellSouth's rich territory, is also in the top nine (No. 2 in the competitive rank).

Bell Atlantic/Nynex has three markets in the top nine. New York is No. 1 in the competitive rank, the D.C. area is No. 3 and Boston is No. 9. Interestingly enough, Philadelphia - Bell Atlantic's third mega-metro area - is No. 31. Also, Nynex bashers should note that D.C. was never served by Nynex.

Judging by a quick look at the top nine, the most vulnerable regional holding company is U S West. It has four metro areas in the top nine. Denver, Seattle, Portland and Phoenix are No. 5 through No. 8, respectively. Minneapolis, the fourth major city in U S West's service territory, ranks No. 64. For years, analysts have said that U S West's major strategic challenge was its territory because it was so large and rural. Now it looks like U S West's real challenge will be holding onto customers in its urban areas.

Again using this snapshot comparative method, SBC seems to be in a strong position. None of its major metro areas are in the top nine, though both the San Francisco Bay and L.A. basin areas are in the top 15 (ranking No. 13 and No. 14, respectively). Best of all, its two Texas metro goliaths - Houston and Dallas - rank No. 51 and No. 52, respectively.

Push into the future. Close your eyes. You're on the clock at Supercomm, the 1998 edition. You have a single assignment: Report on big things, things your company hasn't had time to jump on yet, things your new competition may be beating you to today, things they may start beating you with tomorrow. Keep the report short. Don't clutter it up with the obvious or the minute.

Easy assignment? Not really.

Someone has been given this exact same assignment every year since 1994. It doesn't pay to be wrong. In 1995, an ex-colleague came back with a single, clear piece of strategic advice: Video-on-demand was coming like a tidal wave, so the company should immediately focus on video server technology. His report was short, uncluttered with the obvious or the minute, but useless. VOD stagnated, and video servers fell way down the competitive agenda. That's why he's an ex-colleague - with a better job at a new PCS provider than he had with us. Mistakes are painful but far from permanent these days.

In 1997, the Supercomm report said focus on all things Internet and keep a sharp eye on WDM technology. The woman who filed that report is still with us. In fact, she's the executive who sent me here.

My turn. It's late Wednesday afternoon. Supercomm is winding down fast. I'm ready to e-mail my report: "Anything IP-related is still hot, but the hottest is push technology. In 1996, push was a topic for the rabid enthusiast. In 1997, it was strictly boutique. In 1998, it's rapidly moving mainstream. By the turn of the century, push is going to be the service providers' Holy Grail. Don't be late.

There. Done. Wonder where I'll be working next year?

Underrepresented. Wireless local loop technology will revolutionize basic access in the near future. Incumbent service providers understandably find WLL threatening. But all incumbent service providers are potentially competitive service providers outside the territory, which gives WLL a dual character.

So WLL is intensely interesting to all wireline service providers.

There isn't much WLL at Supercomm this year. Thanks to companies like Tellabs, Hughes Network Systems and OptaPhone, there is some WLL on display. But by rights, there ought to be more, particularly in New Orleans.

After all, New Orleans may be the most dangerous city in North America. WLL is the most dangerous technology in North America.