NEW YORK-Significant progress has been made toward the still unrealized goal of full minority
participation in the telecommunications industry, according to speakers at the Rainbow/PUSH Coalition’s recent
conference, “Building Trading Partnerships to Expand the Marketplace.”
The meeting, convened Jan.
14-15, was the second such event for the year-old Wall Street Project. Rainbow/PUSH, founded by Rev. Jesse L.
Jackson, established the project to promote inclusion of competent minority members and businesses at all levels in a
variety of industry sectors, including financial services and telecommunications.
Telecommunications accounts for
one-sixth of the domestic economy, according to Jack M. Fields, former chairman of the House of Representatives
Telecommunications Subcommittee and an architect of the Telecommunications Act of 1996. This industry accounted
for more than $110 billion in revenues in 1998, and projections for its growth surpass those of every other sector, said
Thomas Hart, a partner in the communications practice of Shook, Hardy & Bacon L.L.P. The Washington, D.C., law
firm works with the Rainbow/PUSH Coalition.
“The gentlemen at this table have negotiated, for the most
part, in good faith,” Jackson said, referring to panelists Leo Bindery, chairman and president of Tele-
Communications Inc.; James G. Cullen, president and chief operating officer of Bell Atlantic Corp.; Royce S. Caldwell,
president of operations for SBC Communications Inc.; Robert Annunziata, president of business services for AT&T
Corp.; and Fields, now chief executive officer of the Twenty-First Century Group, a lobbying organization whose
clients include the Personal Communications Industry Association.
Through a related entity, Rainbow/PUSH has
purchased stock in a variety of telecommunications carriers, including those represented on the panel, Jackson
said.
“It will be mutually beneficial as we end the century to see ourselves as partners in progress, not as
antagonists wallowing in pain,” he said.
“There is nothing more inspiring than enlightened self-interest.
We don’t want the standards lowered. We want one set of rules.”
One of the significant achievements cited at
the conference is a fund, now totaling about $50 million, comprising of interest earned on payments from participants
in wireless spectrum auctions. It will be used to fund small business development for minority business participation in
telecommunications.
“Different applications are being reviewed from people who see the opportunities in
telecommunications,” Hart said.
To answer Jackson’s call “to build a capital bridge” for minority-
owned businesses in all sectors, Citigroup and Bell Atlantic each contributed $10 million as charter members of the
new Black Enterprise/Greenwich Street Capital Growth Forum, Bell Atlantic’s Cullen said. The fund has about $90
million to invest.
One of the opportunities thus far closed to minorities has been as financial advisers to
telecommunications mergers and acquisitions, which totaled $500 billion worldwide in 1998, Hart said. Neither the
target nor the acquirer in the 21 largest such transactions last year used a minority-run adviser for the deal, Hart
said.
“Each of these mergers creates opportunities for minority professionals and organizations. For example,
there will be spin-offs, which minority entrepreneurs can acquire,” he said.
“Wall Street professionals
will be needed for underwriting, and the merging companies have over $200 billion in pension funds to be managed. In
addition, telecommunications companies will have new opportunities for financial services providers and others
involved in advertising, construction, electronic commerce and technology training. There also will be opportunities for
inclusion on corporate boards, management positions and legal staff.”
At least one large carrier plans to
intensify its efforts to use qualified minority investment banking firms to participate in underwriting publicly sold
securities this year, AT&T’s Annunziata said.
“We have not been active in the public capital markets since
1995, but we anticipate going to the market in 1999 for significant amounts of capital,” he said. “This
reflects both our commitment to minority participation and to the increasing availability of such institutions (that are)
managing significant amounts of money.”
In the arena of pension-fund management, Caldwell said SBC
“has an agreement in process being worked out by Rev. Jackson for $100 million of our pension fund to be
managed by minority-owned banks and fund managers.”
Similarly, Cullen also announced Bell Atlantic is
involved in what he called “a trailblazing first.” The carrier plans soon “to transfer $50 million to the
‘Discovery Fund’, which will be managed by five minority-owned financial advisers and geared toward investments in
minority-owned businesses.”
GTE Corp., which Bell Atlantic is buying, will contribute the same amount from
its pension fund for a similar purpose, Cullen said.
Besides managing carriers’ money, Jackson said qualified
minorities deserve a fair chance at managing the carriers themselves. He contended not a single domestic
telecommunications carrier has an African or Latino American member on its board of directors.
However, Cullen
said Bell Atlantic has one Asian American, three African Americans and four women on its board. Minority members
hold 13 of its 100 senior-most management positions. Furthermore, 1998 bonuses for all top 250 managers are being
determined on the basis of financial results, customer service and the success of ethnic, racial and gender staff diversity
efforts.
Because of its success in achieving employee diversity in the United States, SBC was chosen by the
government of South Africa to reform the hiring and promotion practices of that country’s telecommunications
company, Caldwell said.
At AT&T, “minorities hold 29 percent of all jobs, and there are aggressive moves
now to get them into key positions,” Annunziata said.
