Chesapeake & Potomac Telephone Cos., this region's largest private employer and a key subsidiary of American Telephone & Telegraph Co., is planning a gradual staff reduction and consolidation of regional offices at a new, $59 million suburban complex--apparently in Montgomery County.
The local telephone companies also are planning to spend more than $1 billion next year for modernization and expansion of facilities--the first time that such outlays by the firm will pass the billion-dollar level and up from $950.9 million of capital spending this year.
Partly to finance this growth, the C&P companies have filed or will seek major rate increases from local regulatory agencies soon. Moreover, as regulatory authorites permit, residential and business customers throughout the region will be given an option of paying for telephone service on the basis of timed message units instead of flat rates that allow unlimited calls.
These are four elements in a basic reorganization and upgrading of all C&P operations in response to new and growing competition in the communications business, C&P President Robert E. Allen said yesterday.
Bell System competitors are chipping away at the telephone business in a big way, Allen revealed:
* 17 percent of long-distance revenues that previously went to AT&T and its subsidiaries now go to other firms, such as MCI Communications and Southern Pacific Communications; the local equipment market for residential telephones is estimated to be evenly divided between C&P and about 60 competitiors.
* 42 percent of the business-customer market for large-exchange devicesis going to Bell System competitiors.
These developments have added up to a new "spirit and attitude of competition" in a company that used to have a monopoly, said Allen.
C&P operates four separate companies in D.C., Maryland, Virginia and West Virginia with combined assets of $6.5 billion and 45,000 employes, serving nearly 9 million telephones.
In addition, C&P is an important showcase for the Bell System because Washington has been the focus of efforts to establish new federal policies governing the communications industry in an era of technological explosion. Although C&P previously had centralized some operations in downtown D.C. for all four companies--the company's president and staff, as well as accounting, for example--basic telephone operations, management and marketing in the separate jurisdictions have been carried out by virtually autonomous C&P firms that have their own boards of directors.
Now the telephone company is on the verge of implementing a new strategy to prevent further erosion of its business in this region and is planning for still more dramatic changes, if C&P's parent company moves ahead with plans to set up separate corporations for competitive services and basic telephone operations.
In an interview yesterday, C&P chief executive Allen said that "mostly for efficiency," the four companies under his direction will be combining substantial operations to deal with all jurisdictions from central offices. Allen said each company would retain a separate board and continue to be subject to its jurisdiction's regulatory agency.
By eliminating geographic boundaries, Allen said, some current workers at state C&P headquarters in Baltimore, Richmond and Charleston will be moved to the D.C. area. As some duplicative executive positions are eliminated and C&P takes advantage of technological changes that permit a reduced work force, the four C&P companies expect to trim 1,000 positions from the payroll by the end of 1982, he added.
Allen said these cutbacks represent a "major savings" because many of the persons affected by the changes hold middle-management and upper-management jobs today.
The new C&P president said construction is expected to begin early next year on a suburban Maryland office complex that will consolidate telephone company workers now working at various locations in the metropolitan area or at the separate state headquarters. Allen declined to identify C&P's building site further, but other sources said it would be in Montgomery County.
If a federal appeals court upholds a controversial Federal Communications Commission plan to split Bell System operations, "Baby Bell" will be born and that company will operate without regulation in full competition for business communications services. Washington would become the headquarters for a Middle Atlantic region that includes the four area jurisdictions as well as New Jersey, Delaware and Pennsylvania.