CRISIS IN THE KREMLIN : Southland Firm Gets Link With Soviet Satellite : * Technology: IDB Communications will begin offering public access telephone service to the Soviet Union via Intersputnik.
IDB Communications of Culver City was just one of thousands of small telecommunications companies dotting the United States at the beginning of the week. But that has all changed.
IDB stepped into a tiny slice of the spotlight thrown off by the Soviet Union’s turmoil this week when it won the much coveted right to begin offering public access telephone service to the Soviet Union via Intersputnik, a Russian satellite.
The award Wednesday from the Federal Communications Commission, which surprised the company as well as its competitors, may be enough someday to propel the virtually unknown firm out of its anonymity and into the big leagues of the emerging market for private line and satellite communications services throughout the world.
These markets, which permit businesses to bypass existing global communications networks operated by such traditional behemoths as American Telephone & Telegraph, represent some of the fastest-growing segments of the $100-billion-a-year worldwide telecommunications industry. But the segments are often considered too small by huge telecommunications giants, and these “crumbs” are left for small operators such as IDB to gobble.
IDB and other small communications firms are also feasting on the ongoing efforts of governments throughout the world to deregulate their telecommunications operations. As competition is introduced into the telephone, data transmission and other telecommunication services, small operators are seizing business opportunities that simply haven’t existed before.
IDB got started in 1983 by providing satellite radio transmission of the U.S. Festival, a Woodstock-style rock extravaganza in the San Bernardino Mountains sponsored by Apple Computer co-founder Steve Wozniak. Over the years, it has expanded its operations into television sports broadcasts via satellite, which now account for about two-thirds of its $100-million annual revenue, as well as data and voice communications.
The company began offering private line service to Moscow in 1988. Its customers include the Associated Press, the CBS, CNN and NBC television networks, as well as the Los Angeles Times, Wall Street Journal and Washington Post newspapers.
Along with AT&T;, MCI and U.S. Sprint, IDB applied for permission to use the Intersputnik satellite to begin offering public-access phone service to the Soviet Union earlier this year. On Wednesday, the FCC awarded AT&T; and IDB 24 circuits each on the satellite on a temporary basis. The satellite access represents one of the few times a small satellite services operator has been given the right to offer public phone service between the United States and a foreign country. Service is expected to begin within six weeks.
Analysts say this could be the big break for IDB, similar to the deregulation moves that propelled MCI Communications and U.S. Sprint into billion-dollar operations.
IDB stock jumped $2 on the news Wednesday, to $11.75, before easing back to $11.25 Thursday.
“We like to think of ourselves as a small MCI Communications,” said Edward Cheramy, IDB’s president. “We both started as small companies finding small applications for satellite telecommunications technology.”
Though the analogy to a billion-dollar company may be premature, analysts agree that there is big money to be made--by someone--by providing computer data transmission over private lines, direct-line phone service among a company’s far-flung operations, ship-to-shore phone services and in-flight phones via satellite transmissions.
“Telecommunications is becoming such a huge expense for corporations that they are looking for new and less expensive ways of providing it. Small alternative providers are often the answer,” said Doug Conn, an analyst at the Center for Telecommunications and Information Studies at Columbia University.
