Since the Washington area's telephones often run the nation, Washington has long been regarded as a major market for the communications industry. But gradually, over the past few years, the metropolitan area has emerged as more than just a significant marketing site and may be on the verge of becoming the captial of the telecommunications industry.
"Just as Pittsburgh is steel and Detroit is cars, Washington is probably going to become known as the telecommunications town," says Tony Brodman, manager of sales development for Southern Pacific Communications experts -- engineers, scientists lawyers and policy makers, for example. Washington is the seat of government and more than ever the fate of the industry -- deregulation notwithstanding -- is in the hands of the Federal Communications Commission, the Commerce Department's National Telecommunications and Information Administration, the courts and Congress. t
Furthermore, the presence of the diplomatic community here makes the area a natural launching ground for international business in fields like satellite communications, where the nation's technological expertise generally is held to be first-rate.
But unlike other industries, which have simply opened or expanded Washington offices, telecommunictions firms have set up shop in such numbers here that the Washington area eventually may claim it is the industry hub.
Besides Southern Pacific, the area already has major corporate offices for a vairety of telecommunications concerns. Communications Satellite Corp. has long been based in L'Enfant Plaza and recently expanded a satellite command center there. The primary operations of Fairchild Industries' American Satellite Corp., a growing force in the satellite communications industry, are based at the company's Germantown location.
Of course, MCI Communication Corp., the increasingly well-known supplier of business and residential long-distance telephone services, has its headquarters in downtown Washington and is building a new facility on 19th Street NW.
Further Satellite Business Systems -- the fledging partnership involving International Business Machines Corp., Aetna Life & Casualty and Comsat General Corp. -- is now based in Tysons Corner and will soon move into a spanking new McLean headquarters facility.
Throw in a new multi-million-dollar, eight-floor headquarters building in Tysons Corner for GTE Telenet Communications Corp., the Virginia operations base for TDX Systems Inc., a new massive long-distance center for American Telephone & Telegraph Co. in Oakton, headquarters for equipment firms like Rockville's Penril Corp., major facilities for leading computer and technical companies like Xerox Corp. Then it is easy to see why the claim about the industry's burgeoning growth is not without a fair amount of substance.
GTE Telenet is, in itself, quite a growth story. The company was founded here in 1974 and has new grown to a firm with sales of more than $2 million a month and about 700 employes. In fact, since the company was purchased by GTE about 14 months ago, it has grown from a staff of 200 employes.
"We've done that with one recruiter, which says that this area has a large pool of communications people," said Stuart Mathison, the company's vice president for business planning.
Mathison said that Washington is one of but three major areas from which to recruit large numbers of communications systems experts. The other two are the Boston and Southern California environs. "You don't get outstanding computer systems people in New York or the Midswest, for the most part," Mathison said.
In fact, the demand for expertise in the field in the Virginia suburbs alone is so great that several communications firms in that area are working actively with George Washington University to try to bring a telecommunications graduate program to the Tysons area. That move is still under consideration by university offcials.
GWU offers a masters program in telecommunications policy, the only program of its kind on the East Coast and one of but a handful of similar programs in the country, said Leroy Paul, associate director of the GWU's College of General Studies. The program has about 100 degree candidates, and Paul said the school cannot meet the student demand.
William McGowan, the chairman of MCI, says that when he first came here with Mci11 in the late 1960s, he viewed Washington through the eyes of a "snobbish New Yorker." He kept his apartment in New York, where most of the company's financial business was centered.
MCI was forced to have a major Washington presence during those years, because the company's fate rested in the hands of the FCC, McGowan recalls. "You needed, in effect, the FCC's vote of confidence to get started in this business," McGowan said.
But in 1974, all of the MCI's corporate operations moved here, and soon the company will be spread through seven buildings in the metropolitan area. "Clearly, it was because of government," McGowan said. "But it's also a good place to run a business."
"It is very critical to educate everybody to the environment of Washington," McGowan said. "People without exposure here to government suffer a disadvantage. You're more professional if you know how to deal with government." Dealing with government, McGowan said, is something a corporate official "has to do as a business discipline."
Southern Pacific's Brodman points out that the move is a very logical one for his company in part because 70 percent of the company's plant investment and customers are east of the Mississippi River. "That's where the business is, and there's a large pool of engineering talent in the Washington area," Brodman said.
Despite recent congressional and FCC efforts to lift much of the regulatory apparatus from the telecommunications industry, the bulk of those battles remain in the years ahead, particularly as both legislative and regulatory initiatives wind up in federal appeals courts. This fall, the government is expected to begin its landmark antitrust suit against AT&T, the giant of the industry.
"I see there being several more years of controversial issues involved with telecommunications," Brodman said. "We want to make sure we're on top of it."
Southern Pacific will break ground next year for a major, 180,000-square-foot headquarters facility just off I-270 in Bethesda. That office soon will employ about 600 and ultimately could provide work for up to 2,000 people.