Substantial segments of the communications industry are entering 1983 with more certainty about the future than at perhaps any time in the last decade.
That certainty, in large measure, stems from the increasing clarity with which the dominant force in telecommunications, American Telephone & Telegraph Co., is moving forward with its historic reorganization.
But while the telephone equipment, long-distance calling and related telecommunications industries are moving through a relatively predictable immediate future, the broadcasting, programming, cable and satellite businesses--in the midst of a major technological and market place shakeout--face a year of difficult decisions.
The development of major cable and other video distribution systems will continue to erode the audiences for the three major networks, raising questions about the future roles of the ABC, CBS and NBC networks in the video marketplace. There will be more starts and stops in cable programming, although Thomas Wheeler, president of the National Cable Television Association, maintains that most of the turbulence in his industry, too, has passed.
As 1982 closed, most major cities had awarded cable franchises, in either tentative or final form, suggesting that the new challenges facing the industry revolve around the development of top quality management. "This will be the year of the double M's--management and marketing," Wheeler said.
The growth of cable television, as well as the development of other pay programming delivery systems, has left each of the three major commercial networks scrambling for a piece of the new technology.
ABC has its foot in a series of new media programming ventures, ranging from an all-news partnership with Group W Cable to Home View Network, an innovative system that will feed movies and other programs to video recorders overnight while their owners sleep. CBS is trying to get into microwave pay programming distribution and is likely to make a second major cable effort, learning from its critical success but bottom-line failure with CBS Cable.
NBC's parent, RCA Corp., is trying to turn around its video disk business, while working to carve a pay television niche with The Entertainment Channel.
Meanwhile, the networks are seeking a rewrite of some of the regulations that restrict their operations. This year will see a major political push for what television industry officials characterize as deregulation similar to that which has taken place in the telephone industry.
"I think 1983 will be a critical year for the last major service industry still intensively regulated by the federal government," said William Lilley III, CBS Inc. vice president for corporate affairs, referring to the television business.
Atop the broadcasting industry's agenda is an effort to persuade the Federal Communications Commission to lift the financial interest and syndication rules that bar the three major commercial networks from holding substantial syndication rights to network programming. Their foes in that fight are the movie studios and independent program producers, who claim, in essence, that the networks aim to put them out of the network television business.
On a parallel front are attempts to lift rules that limit network ownership of major market television stations and that bar networks from owning cable systems. If the networks do not succeed at those tasks this year, "it will be tough to soon get the momentum up again," Lilley said.
With AT&T's reorganizations set, the comunications industry's new agenda includes watching AT&T's new, unregulated subsidiary, American Bell, very closely.
For 15 years the acrimonious debate over the future of the Bell System dominated public policy attention in communications circles, leaving much of the industry in limbo and introducing considerable uncertainty into national telecommunications development.
But a year ago, on Jan. 8, that debate was radically altered and clarified when AT&T agreed in an antitrust settlement to split off three-quarters of the holdings that had made it the nation's largest private enterprise.
As a result, on Jan. 1, 1984, AT&T will divest itself of 22 local phone companies, which will then be reassembled as seven regional firms. AT&T will retain its new unregulated subsidiary, American Bell Inc., its long-distance network, and its manufacturing and research arms--altogether about 25 percent of the Bell System's assets.
"We certainly have a much better sense than we did a year ago about what the industry's structure will look like," said Edward M. Greenberg, a telecommunications analyst with Sanford C. Bernstein & Co.
The antitrust action bodes well for AT&T's long-distance competitors, like MCI Communications Corp., most experts say. Moreover, the FCC's decision late last month to revamp the formula under which competitors pay for their local links to intercity networks, while somewhat confusing and as yet unsettled in specifics, ultimately will remove another layer of uncertainty in the telephone business.
Not everyone in the industry, however, is overjoyed with the antitrust settlement. Telecommunications and computer equipment manufacturers, for instance, had hoped that AT&T would also be forced to spin off Western Electric Co., its manufacturing arm.
Equipment competitors and their ideological allies in Congress are also concerned about what will happen in 1984 when the newly independent phone companies may once again be in the position of marketing competitive products, such as basic telephones, but using phone subscribers' money to subsidize the process.
Nor are all segments of the industry certain that the establishment last week of AT&T's new affiliate, American Bell, is necessarily the most prudent policy. The separate subsidiary was set up to permit AT&T to get into competitive unregulated markets, such as data processing, but without the benefits of monies collected from monopoly rate payers. Virtually all telephone equipment has been deregulated with the birth of "Baby Bell."
The new subsidiary has begun offering an unregulated data network service and also is moving quickly into new telephone gadgetry for the home. Last week, at the Consumer Electronics Show in Las Vegas, American Bell officials announced the introduction of "Genesis," a product AT&T marketers call "the telephone of the future."
It is, in essence, a computerized telephone that will utilize a built-in 20-character display screen to give basic time, data and calling information, but which will include a variety of other programmable features.
But critics, such as the Tandy Corp., charge that it is improper for American Bell to be using its links with the parent company to market products. Primarily, Tandy is upset about American Bell's use of the phrase "genuine bell."