Giving due credit

A giant. Paul Henson died last week. A lot of readers probably are familiar with Henson's name, but don't know much about his career (see story on page 17). Telecommunications has such a strong sense of the present and changes so fast that it is easy to forget even the recent past. But plenty happened not too long ago, and Henson was in the middle of most of it.

In fact, Henson, long the executive power at United Telecommunications, made a lot of it happen personally.

United used to be a fairly large but ordinary telephone company. Now it is Sprint, an international technology leader, the fiber pioneer and perhaps the most strategically imaginative large service provider.

Without Henson, United would not have become Sprint.

Henson put everything United had behind the national, all-fiber bet. Many analysts thought it was a bad bet. Fiber was fine, but all fiber? Who would ever need all that capacity?

But Henson was right. The fiber made a world of difference in Sprint's position in the marketplace. When the data wave hit, Sprint was precisely where it needed to be.

Unlike many able business executives, Henson's contributions were not confined to his own company. He was among the telecom executives whose own formative period was entirely before the introduction of competition in the industry but who had assumed corporate leadership at precisely the moment competition replaced monopoly.

His own company prospered, of course. And he played a formative role in the deliberations of the U.S. Independent Telephone Association, now the USTA. The association for too long clung to an increasingly irrelevant position as the isolated voice of opposition to competition.

The association was dug in deep, on the verge of becoming a dinosaur, rigidly consistent in its opposition to policies long after those policies had been adopted and the world had moved on. Thanks to some of its more far-sighted members, Henson among them, it moved from opposition to participation. As the USTA, the association played a positive role in the struggle for new national telecom legislation that passed in 1996.

Four leaders stood out in the 1980s. Charles Brown, the chairman of AT&T who decided to break the company up rather than fight the antitrust suit to the bitter end, was a critical figure early in the decade. William McGowan, the renegade chairman of MCI and dogged apostle of competition, was a seminal figure throughout the decade. Judge Harold Greene, who oversaw the implementation of the consent decree breaking AT&T up, was the third. Henson was the fourth.

Henson's achievements were the least noted among the four.

But none of them did his work better than Henson.

Earnings report. First quarter earnings are rolling out. Guess which sector is off to a strong start? Chemicals? Natural resources? Tobacco? Did you guess "telephone companies"? You win. Again.

Of course, the term telephone companies is misleading. All the big carriers are diversified. But there's more to profits than diversification, judging by the early 1997 returns.

Ameritech, GTE and Sprint all posted strong first quarter earnings. Analysts credited strength in their core (telco) businesses along with good progress in selling enhanced services.

Financial markets find this encouraging on at least two counts.

First, the markets like big, profitable, well-run companies. Large amounts of cash don't hurt, either. The markets need look no further for companies that meet that profile.

Second, marketing enhanced services has not always gone too well. In fact, it's frequently gone poorly. A major strategic concern about all the carriers is their long-term ability to market new or enhanced services. Competition requires marketing. Signs that the established carriers are learning to market are eagerly looked for and well received.

The public network business is a great business. The companies in it should do well. But the companies that really separate themselves from the competition will be the companies that can learn to market new services.

They will de more than well. They will excel-and then outmarket their competitors.