Tilting Toward Telephony: How Electric and Gas Companies Can Leverage Their Systems for a Changing Market
and telecommunications-related holdings. This bifurcation would allow investors to target their investments to a particular aspect of the utility's operations, without necessarily creating the need for a separate subsidiary.
Finally, as utilities face increased pressure from both individual and institutional investors to continue and increase dividends, they will need management teams with a visionary approach to marketing and quality customer service to succeed in any endeavor outside their core business. This could mean bringing in an outsider who possesses the skills developed in a competitive environment.
In an effort to generate additional revenues, utilities are exploring opportunities in the telecommunications sector. While utilities explore this additional revenue potential, it is important for them to recognize that their core competencies remain the generation and distribution of power and gas. With regulation moving toward an increasingly competitive model, utility managers seeking to enter the highly competitive telecommunications industry should consider a broad range of options to minimize risks for ratepayers and increase investment and growth opportunities for investors. t
Andrew C. Barrett has served as a commissioner on the Federal Communications Commission (FCC) since September 1989. His current term will expire at the end of June. Before coming to the FCC, Barrett served as a commissioner at the Illinois Commerce Commission. He is currently a member of the executive committee of the National Association of Regulatory Utility Commissioners as well as of NARUC's Committee on Communications.
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