Deregulation: Bonanza Or Bust?

The Telecommunications Act of 1996 vowed to break up communications monopolies and spark competition. Here's how you can take advantage of a multibillion dollar industry.

For the savvy small entrepreneur who can strategically position his or her company to service the changing needs of our technology-driven society, the information superhighway could be a road to riches. just ask James Brady, vice president and chief financial officer of TECH Ltd. Inc., a telecommunications products and service company in San Francisco.

Brady partnered with his wife, Debra, now the company president. The Bradys used a single computer and $350 in start-up costs to get their business off the ground in 1987. Through extensive networking, they bid for and landed contracts to provide training on telephone switching systems for a number of Fortune 500 companies, including Lucent Technologies and AT&T.

Today, the eight-employee firm, which earned $750,000 in revenues last year, has expanded its services to include voice mail service and training, basic wiring and low-voltage infrastructure design (installation of voice data and fiber optics for telecommunications functions such as 911 call centers).

When the Telecommunications Act of 1996 was passed, one of its benefits was to open up opportunities for smaller businesses like Telecon to compete in areas once dominated by large conglomerates. Traditionally, only those with deep pockets and powerful industry contacts could take advantage of the multibillion-dollar telecommunications industry. As a result, many minority-owned firms were left out.

The Telecom Act, however, has opened some doors for African American entrepreneurs to successfully do business. With the industry experiencing tremendous growth and more than $300 billion up for grabs, those small business owners on the alert for creative niches in the areas of telephone service (wired, wireless and cellular), broadcast (cable and satellite) and computers (hardware, software and training), can parlay their experience into business opportunities, particularly in procurement. There are also a number of opportunities to provide access to newer technologies in personal communications services (PCS, or wireless communications) and digital television (combining TV with computer and Internet access).

Catherine Sandoval, director of the Office of Communications Business Opportunities for the FCC, says small telecommunications firms can provide a number of services including the wiring of schools, computer training and consulting, and reselling and distribution of mobile phone and pager services. “And, of course, there’s the Internet, which is still being developed,” she says. “There are a lot of opportunities available, but to take advantage of them, small business owners must narrow down their choice of field, learn as much as they can about the industry they want to get into and know how it is regulated.”

With the Telecom Act set to go into full swing, it may be even more crucial for black-owned firms to thoroughly investigate the industry and its opportunities if they are to survive.

A COMMUNICATIONS FREE-FOR-ALL?
As the first major overhaul of telecommunications law in almost 62 years, the Telecom Act of 1996 affects telephone service (local and long distance), cable programming, broadcast services (including radio) and services provided to schools such as computer equipment or basic wiring. The Act allows any company (major and independent) to enter any communications business and compete in any market

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