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Stars of Telecom

The transcript of a Morino Institute Netpreneur Program event, held October 22, 1997, featuring business leaders from growing firms in Greater Washington’s next-generation telecommunications industry, including Morgan O’Brien, Executive VP of Nextel Communications; John Puente, Chairman & CEO of Orion Network Systems; Brian Thompson, Chairman & CEO of LCI International; David Thompson, President & CEO of Orbital Sciences; and Mark Warner, Managing Director of Columbia Capital Corporation. The event was moderated by New Economy analyst Gary Arlen and included closing remarks by Mario Morino, Chairman of the Morino Institute and himself a software industry pioneer.

Statements made at Netpreneur events and recorded here reflect solely the views of the speakers and have not been reviewed or researched for accuracy or truthfulness. These statements in no way reflect the opinions or beliefs of the Morino Institute, or any of their affiliates, agents, officers or directors. The transcript is provided "as is" and your use is at your own risk.  
Copyright 1997 Morino Institute. All rights reserved. Edited for length and clarity.

table of contents
Esther Smith: celebrating internet entrepreneurship
Mario Morino: the book ends of a new digital economy
Morgan O'Brien: never give up
John Puente: there is no barrier too high for a great idea
Brian Thompson: the courageto be an entrepreneur
David Thompson: rebels & pirates
Mark Warner: to succeed, you must be willing to fail
The Audience: questions & answers
Mario Morino:
a unique opportunity. a unique time. a unique place

Part 1: Introductions

ESTHER SMITH: Celebrating Internet Entrepreneurship

Welcome to this Netpreneur Program CEO Forum, An Evening With The Stars Of Telecom. Is this a great night or what?

Tonight we celebrate Internet entrepreneurship. How many of you are netpreneurs? And how many of you are planning to be netpreneurs? We have a lot of people here tonight. Did you have any idea there were so many of us?

The Netpreneur Program , and this evening’s event, is produced by the Morino Institute as one of the four strategic initiatives of the Potomac KnowledgeWay Project . PKW’s goal is to help make Greater Washington the global leader in the creation, production and delivery of digital information products and services. The Morino Institute and MCI Telecommunications Corp. are the two charter sponsors of the Netpreneur Program. I’d like to recognize a few friends of the Netpreneur program as well. The sponsors who are making tonight’s fabulous event possible are EXODUS Communications; Ernst & Young LLP; Friedman, Billings, Ramsey; & Co., Orion Network Systems; Ryan McGinn and Morino Institute. Please join in thanking each one of these with a big round of applause.

Think of us at the Netpreneur Program as network central. Many of you have participated in one or more of our informal monthly Coffee & DoughNets networking sessions. Last June, 750 of you showed up to meet the Barons of the Beltway and you outstripped all of our expectations. Tonight, you have really ramped up the attendance and now we have quit worrying about scaling. We are just deep into crowd control.

If you wanted to plot the growth curve of this program, it would look like an Orbital Sciences launch trajectory. And I think it’s fair to say, Netpreneurs are having a galactic impact on our economy, our business culture and our society. And of course, on our hopes and dreams. I predict that one day netpreneurs here in this room will be the center of Washington’s economic universe.

To those of you who were at the Barons event and asked, "Can you top this?" Well, I want to know—do you have the answer? Yes?

Tonight we have five fabulous guests who have been there and done that in the revolutionary industry that enables global scale communications. The Stars of Telecom demonstrate that you can make your dreams happen. They include Morgan O’Brien, founder and Vice Chairman of Nextel Communications, Inc., who, believe it or not, started out as an attorney. Morgan turned his experience with the FCC, and later as head of the telecom practice at Jones, Day, Reavis & Pogue, into an idea, a company and a global network, with no roaming charges. Right?

MR. O’BRIEN: You’ve seen our ads.

MS. SMITH: Right. John Puente is currently Chairman of Telogy, an Inc. 500 privately-held company, which recently raised $13 million in a private round of funding. You should know that a $13 million bet on John is about as solid as it gets. Former Chairman and CEO of Orion Network Systems, John was also a founder of DCC and shepherded it through a brief iteration as a Maycom subsidiary before it was acquired by Hughes to become Hughes Network Systems. John is also, I’m proud to say, a Greater Washington High-Tech Awards Gala entrepreneur of the year.

Brian Thompson left the executive vice president’s job at MCI Communications for the high-risk opportunity to lead the turnaround of LCI International. During his six years as chairman and CEO, LCI has become one of the fastest-growing long distance and data carriers in the world. Early in Brian’s career, he was a McKinsey consultant and I guess he practiced on the firm’s telecom clients before turning into an entrepreneur. He is a former keynote speaker at the annual Greater Washington High-Tech Awards Gala, as was David Thompson, and Brian is a man who truly put competition into deregulation.

David Thompson is a winner of the National Medal of Technology and also a Greater Washington High-tech Awards Gala entrepreneur of the year. He created Orbital Sciences Corporation, around the commercial possibilities of a new space industry paradigm. Its Pegasus launch system ushered in a new era of realistically-priced space transportation which the company’s Orbcom subsidiary now successfully exploits in two-way communications.

I’ve got to tell you, it wasn’t too many years ago that I heard David present the Orbital Sciences business plan at an MIT enterprise forum session here in Washington. A few days before his IPO, the Wall Street Journal implied on a front-page story that David was a space nut. Now that’s true, but the Wall Street Journal didn’t mean it as a compliment. Well, we knew better. And now David has made it all happen, and hey, Netpreneurs, it can happen to you.

Mark Warner, a cofounder of Nextel, earlier created the secondary market for investment partnerships in the cellular telephone industry. Cofounder of Columbia Capital Corporation, Mark is a pioneer financier of wireless communications. He is a devoted alumnus of George Washington University and, you’ll be pleased to know—although Mark did not authorize me to say this and I actually got it on the street—he still has so much money left after his campaign for the US Senate, that he looks at deals on a daily basis and remains a proactive investor in new age communications.

Now, here’s the plan. Each Star will give a seven-minute presentation and then we’ll move into a town hall format with questions and answers. We want an open and informal session, an interactive dialogue among netpreneurs and these mentors on stage. If you want to ask a question, please go to one of the mikes in the aisles, state your name and company and speak clearly into the microphone. The event is being taped and transcribed. The press is here. We’d like to capture your comments.

Now, let me introduce the godfather of the Netpreneur Program, the man who built an international software company and then began a second career as a social and civic entrepreneur. The grassroots leader of our netpreneur culture, Mario Morino.

MARIO MORINO: The Book Ends of a New Digital Economy

Good evening and thanks for being here with us tonight. I know it’s going to be a very exciting evening, one that I intend to listen to and learn from.

Greater Washington is emerging—I think to the surprise of many—as one of the few regions capable of assuming the mantle of economic leadership for the 21st century. Supremacy of the past two decades has been centered around computing technologies, but we are now beginning to usher in a new era of convergence— the convergence of communications, computing and content. While we are strong in all three sectors, in reality the opportunities and potential will be played out in this region to their fullest, largely because we may well own the "book end" sectors of the convergence—communications and information content. Arguably we already dominate the former and we will absolutely dominate the latter over a 10-15 year period. You could argue that that Greater Washington is itself the center of this convergence, and may be one of the best, if not the best, positioned area in the world to capitalize on the economic opportunity of the 21st century.

Let’s talk about these book ends for a moment. At one end—and representing the core focus of PKW—is that this region will become a dominant producer of digital information products and services—the content. Why? Because we are home to some of the richest bases of information and cultural objects in the world. Just think what can happen with the mining of the vast information banks of the Federal government, the tremendous information concentrations in health from the NIH and Johns Hopkins University, space information from NASA, tourism with the National Trust, the media around the Freedom Forum, the Newseum, and the many different publication sources based here. We are the very center of the newsletter industry. Then, there’s rich base of cultural content in the arts, history and the humanities from places ranging from the Smithsonian Institution to Howard University. The list just goes on and on.

So, we have a tremendous base of the raw information based in intellectual capital. And we already enjoy the intellectual advantage in programming and production of such information at companies like America Online, Discovery, Digital Inc., BET and a host of start-up and emerging new media firms.

At the other book end, and more immediately apparent today, the region possesses a remarkable concentration in the communications sector. It is arguably the hub of the telecommunications industry, a distinction that will only grow as deregulation and innovation in areas like satellite and wireless continue to redefine opportunities in this sector.

The Stars of Telecom and their firms are living proof of both the region’s success and its potential. Each has played a pioneering role in communications, not only in this region but in the world. The region’s prowess in communications should be no secret. This is the place where Bill McGowan pioneered MCI from a concept that challenged a world power, into a world power itself. More recently we have seen events like an IPO by Ciena make Wall Street stand up, watch and wonder what’s going on in this region.

UUNET and AOL demonstrated a collective muscle with the acquisition of CompuServe. The action of around MCI right now couldn’t be hotter—triggered by the bold action of WorldCom, countered by GTE and . . . what tomorrow?

The activity goes on. Whether it’s a series of transactions by Orbital Sciences or Loral’s purchase of Orion Networks, the convergence is at play. It is operating in this region and the intensity of activity is enormous.

How vibrant is this telecom energy centered here? One noted observer is quoted as saying, "Washington is the Silicon Valley of communications and the Federal government has the technology customers leading the way."

Who said that? Was it a regional business person? One of the institutional people? No. It was from Mark Andreessen, founder of Netscape, being interviewed by Shannon Henry in Washington Technology . The headline was "Andreessen Watches Washington."

I love to watch headlines. Sometimes it’s good just to scan them to get a sense of climate. Let me read you just a handful of some recent ones. Absorb them and the whirlwind of activity they represent, because they barely scratch the surface of what’s taking place here.

CAIS Internet Is First ISP To Offer Web-Enabled Phone Service
Access Beyond Secures $40 million in Private Funding.

I want to pause here. These were not in my original notes. They were both announced today. I had to change the speech as news feeds were coming in to our group. Here are some more:

Mandl Takes Teligent Public
L-SAT International Proceeds with Network Expansion Plan to Purchase New Fiber Route
GTE Joins Bidding War for MCI
WorldCom Bids to Acquire MCI
Wireless Company WinStar Bases Operations Here
Nextel Locates in the Greater Washington Region
Orbital Sciences Announces OrbCom and OrbImage
Yuri Systems is Business Week’s Hottest Growth Company
Orion Brings Satellite Service to Europe and Latin America
Telogy Attracts $13 Million in Funding
Coherent Communications Opens New World Headquarters
LCI to Acquire USLD
Iridium Launches Seven New Satellites
University On Line and Global One Launch Virtual Campus
WorldCom to Acquire CompuServe and AOL’s ANS Communications
Orbital Completes Purchase of CTA Space Systems
Ciena Corp. Goes Public, Sets Record on Wall Street
Orion acquires Gateway for Asia Pacific Operation
Nextel Successfully Completes $500 Million Private Placement
GTE Spacenet Concludes the Acquisition of Tridom
L-SAT International Prices at $350 Million Debt Offering
Worldcom Announces $300 Million Expansion to the UUNET Architecture
Intermedia Buys Digex

Is something going on here? You bet, and it’s hot. However you choose to view our future, it is already clear that our region is an important center for innovation and policy development for the digital age. Communications is a major asset of the region and a vital part of its promising economic future.

We are fortunate tonight. Our five Stars cover nearly every facet of the communications industry. As founders of their companies, they represent the fierce drive and creativity of the entrepreneur. They’re here tonight to share their stories with over 1,000 of you who, in your own right, represent the spirit and future of this region.

I’d like to say a special thanks to Mark Warner who helped us put the program together; to Morgan; to John; to Brian and Dave, for being here tonight; to April Young of the Potomac KnowledgeWay Project to all of the sponsors that make the Project possible; and to the Netpreneur Program team. Thanks for all of your efforts to make this program click.

Most of all, thanks to all of you. You are the enthusiasm, the drive, and the future of this Program and this region. The Netpreneur Program is about building community and weaving a social fabric. It’s about coming together and working together to change your individual destiny and, of course, the future of this region. We wish you the best of success and welcome you to an Evening with the Stars of Telecom.

And now, it is my distinct pleasure to introduce our first Star, Morgan O’Brien.

Part 2: The Stars of Telecom


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