How business, doctors and journalists prey on your food anxieties I

Let others rush to lay optic fiber <strong>and</strong> splurge on cel'ular
licenses . Cinclnnati Bell Is playingthe game its own way .
Playing without
paying
By Gary Samuels
:1'`v scccssstr_ EXECt Tn°- will tell
vou that some oEhis bestitnwstments
were the ones lie didn't make-Cincitr
nati Bell Inc . President <strong>and</strong> Chief
Ececutive john LaMacchia Ccels that
Ica% about tiber-optic <strong>and</strong> coaxial cable
T st'stems .
The smallest of tlte former Bell S%steni
units-sTCT osvned onlc 33% of
the shares-Cincinnati Bell has nearlc 1
million lines In the greater Cincinnati
area . Liice other phone companies, it
will soon face competition in its basic
Cinclnnati Bell's 'ohn LaMacchia
"Direcrv looks to me like twoaway
video on dem<strong>and</strong> on the cheap ."
phone <strong>business</strong> trom cable-n' operators
<strong>and</strong> others . Urilike most phone
companies, it has no plans tn spend a lot
oEmonev on a high-tech cable system .
Ditto for cellular . Cincinnati Bell uaded
its ft'ce eellular license For a minorininterest in a partnership controlled b\
Ameritech . which no«it would gladhswap for cash
.
But doii t think Larllaahia is out of
it . Before Cincinnati Bell he u .ts a strategnc
planner at .kTe- ; beture that, a rcsearch
phcsicist at Bell Labs . He kno«s
,chat s Ishat in telecommunicatlons,
He also kno«s that his smallish Bell
can't raise billions of dollars . Widt
S12 billion in reNenues last cear <strong>and</strong>
$90 million /S1?1 a slrarcl in carnings,
Cincinnati Bell is a midget contpared
scith S 14 billion Bell Atlantic or
S17 billion BellSouth .
But that, he reasons, isn't all bad . It
means he must measure his risks more
caretldh• . He is N~ 'elI aware diat during
periods of rapid scientif'ic progress
<strong>and</strong> regulatonchange, companies
that inrest emiv in «hat appcar to be
promising technologies o$en wish
thet•'d «aited for the next technology
. That's the «ac he teels about the
FancN, two-\% a}' vicieo nenaorks being
proposed bN some Bells . "wouldn't
INc be better off «aiting to see ho%N
this all pans out?" he savs mildly .
While «alting, LaA4acchia is not
sitting idly by . He notes that Hughes
Electronics' Direc ;~', the satellite
broadatsting sen,ice that beams ap to
175 channels direcdy to homes
equipped widi 3700 dishes, is alreade
a good, relati%°ehy inexpensive alternati%e
to cable T~' . So Cincinnati Bell has
taken an indirect stake in Direc~''s
suceess through its telemzrketing
subsidiarv Matrixx A(arketing . Started
in 1989, Matrixs began taking calls
to Direeiv's toll-free hotline for General
Motors' Hughes unit a vear jgo
<strong>and</strong> now has nearh, 1,000 dedicated
phone reps taking orders <strong>and</strong> ansvering
yuestions about dte senice .
"What am I n;issing?" LaMacchia
dem<strong>and</strong>s . "This [DirecTt' ; looks to
me like rn'ossat' aidco on dem<strong>and</strong> on
the clxao . It's the market others are
pursuing for $500 to S1,000 per
home, onh• it's fulreadv] there, <strong>and</strong>
the senice is spectacuFar ."
The numhers support his N'ie%a . Matrisx's
sales hace climbed front 388
million in 1992 to S226 million last
cear . Capital'uncestmeiu : negligible .
La~~tacchia ]ra.s ulso found a«as to
participate in cellular telephonr witlr
out spending billions . Ocer the past
decade Lalvlaechia has built a dicision
ralled Cincinnati Beil Information
SIstems that produces customer bills
For cellular phone operators using internally
designed software . So Ear this
k6 Forbcs . Aueust 14, 1995
2046673303
http://legacy.library.ucsf.edu/tid/agf97d00/pdf