Turning a New Page At Homeland Security

Gary Arlen , president of Arlen Communications Inc ., a Bethesda telecom research firm, said the idea of adopting pagers as a component of an emergency communication system is "intriguing," but may be a hard sell because the technology is perceived as outdated.

The technology is "reliable enough," he said, as long as the network of transmitters and antennae have been well maintained.

USA Mobility was formed a year ago after Alexandria-based Metrocall Holdings Inc . merged with rival paging firm Arch Wireless Inc . of Westborough, Mass. Both companies had recently been through bankruptcy proceedings because the individual consumers who comprised most of the industry's 45 million subscribers in 1999 quickly abandoned the technology for cell phones.

Today the company continues to lose customers as consumer holdouts finally switch to cell phones or BlackBerrys. The vast majority of the firm's 5.1 million subscribers now come from companies that don't want the expense of giving each employee a cell phone, but still need to keep in contact. Third-quarter profit fell to $355,000 (1 cent) from $6.7 million the previous year. While the firm's revenue rose to $151.9 million from $109.4 million, growth was fueled in part by sales of the very cell phones and BlackBerrys that have hurt the pager business: The company acts as a reseller for Sprint Nextel, Palm and other telecom companies.

But USA Mobility is also looking at other uses for the pager network, trying to sustain value out of its main asset. The firm recently signed a deal with two companies to provide meter-reading technology for electric and gas utilities. The idea is that readings could be sent digitally every hour, helping power companies charge different prices, depending on how much energy is used at peak and off-peak times. As for emergency responders, Kelly says the company still has a base of a million subscribers in state and local government who still rely on pagers. Convincing the Homeland Security Department to sign on, he admits, is going to take a bit more work.

Overheard

---

"No, the Ballmer children don't have their Xbox 360 yet . . . unfortunately, thanks to the wonders of Sarbanes-Oxley, management does not get a free Xbox 360 anymore," Steve Ballmer , chief executive of Microsoft Corp., told a crowd of 500 local technology executives who gathered at the Capital Hilton yesterday to hear him speak.

Sarbanes-Oxley has been blamed for a lot of things, but the deprivation of Steve Ballmer's kids is certainly a new one.

"If I get an XBox 360 from the company, that's income to me, and it's got to be disclosed," he said. "And our audit committee decided it wasn't worth it."

Thankfully, Santa doesn't answer to the same regulators.

Ellen McCarthy writes about the local tech scene. Her e-mail ismccarthye@washpost.com.