Sprint CEO supports ruling to promote competition

Chris Jones

Thursday, May 16, 2002 | 10:59 a.m.

The top executive of Sprint Corp. said he supports Monday's U.S. Supreme Court ruling promoting competition for local phone services, despite its potentially negative effect on his company's dominance in areas such as Las Vegas.

William Esrey, chairman and chief executive officer of Kansas City, Mo-based Sprint, was in Las Vegas Wednesday to speak at the i2 Planet trade show, which focuses on inventory management through technology.

Following his prepared remarks, Esrey said he favored the Supreme Court affirmation of the plan Congress approved in 1996 to open the $110 billion local telephone industry to competition by limiting the amount former Bell Telephone operators can charge competitors to use their existing networks. Congress also ordered that more network connections be made available.

Many large local carriers contested the plan in court, which delayed real competition for local telephone service in many markets.

"We're in support of that decision," Esrey said. "It's been hard for competitors to move into established areas effectively. This doesn't change anything, but it prevents us from going backwards.

"There's still a lot of work to do going forward to make it even easier to move into other areas and get competition into local markets, but we'll be a better company with competition in our local markets."

The court's ruling affects Sprint in two ways. In areas such as Las Vegas, where it's the dominant provider of local telephone service, the company must make more room for competitors, which could hurt its market share.

In areas where Sprint isn't the dominant provider or doesn't currently provide local services at all, Esrey said the court's ruling could help his company to compete with more-established providers.

"It hits us as a mixed bag, but you've got to get competition into the local markets, wherever they may be," Esrey said. "We welcome competition in (Southern Nevada) and other local markets that we have."

Earlier Wednesday, Sun Microsystems Inc. CEO Scott McNealy told those at the trade show his company is working with researchers from two of the world's leading universities to develop a system that could make store checkout lines obsolete.

McNealy introduced a product called Auto ID, which he believes could replace the Universal Product Code, or bar code system, as the world's most commonly used inventory tracking method.

Using Auto ID, individual items such as soup cans, articles of clothing or boxes of soap would be tagged with a microchip equipped with a unique identification number. When scanned by a radio receiver, the chips would emit a signal that provides an immediate count of how many items are stored in a given area.

Unlike bar codes -- which must be scanned individually using a light-based reading device -- McNealy said Auto ID would allow its users to inventory the contents of an entire store, warehouse or other confined area in one motion.

"With this technology, you could have a supermarket cart filled with 80 or 90 items and walk straight out of the store without waiting at a checkout line and everything would be properly billed," said Tony Hillman, Sun's engineering manager who helped McNealy demonstrate Auto ID.

McNealy said researchers from the Massachusetts Institute of Technology and England's University of Cambridge are currently working with Sun to prepare Auto ID for commercial sale. At about $1 per unit, the microchips are still too expensive for widespread use, but Hillman expects production improvements will reduce the chips' cost to as little as 5 to 10 cents per unit within the next two years.

McNealy said Sun's recent efforts to assist traditional businesses like small retail stores is a mild departure from the company's late 1990s business model.

As recently as two years ago, McNealy said nearly 60 percent of Sun's business came from telecommunications and high-tech companies. Following the demise of many high-tech enterprises, he said his Palo Alto, Calif.-based company has expanded its services to meet a wider array of business needs.

"We've gotten into a lot of the traditional economies such as health care or auto manufacturing," McNealy said. "Today automobiles are nothing more than Java browsers with tires."