ADVERTISEMENT

ADVERTISEMENT

YEAR IN REVIEW PREDICTIONS - EDITOR'S NOTE: For an industry-by-industry look at the year ahead, beat reporters for the Associated Press asked a prominent executive in each sector to provide their view of important trends for 2004.

Following is a sampling of some of their responses.

Telecommunications: Ed Whitacre, chairman and CEO of SBC Communications.

In 2004 the telecommunications industry will be closely watching a court challenge by the local Bells to federal rules on local access rates, Whitacre says.

Determined to fuel competition, the Federal Communications Commission forced the Baby Bells to lease their local phone lines at low rates to rivals such as AT&T; Corp. It also rocked the wireless industry with new rules enabling customers to keep their cell phone numbers when they change service providers.

Whitacre says the access rules discourage regional Bells like his, which operates in the Southwest and Midwest, from building out more bandwidth-rich networks, including stringing fiber optics to the home.

ADVERTISEMENT

The new year also brings speculation that one or more big mergers are needed in an industry stricken by price wars and emerging technologies such as Voice over Internet Protocol (VoIP) phone service.

Whitacre, whose company is a majority owner of Cingular Wireless, the nation's second biggest cell phone carrier, did not wish to speculate on mergers. But he called VoIP, the carrying of voice calls over the Internet, a big question looming over the industry -- "another form of arbitrage on the telephone network."

Regulators will need to decide whether Internet calls, which are more efficient than traditional voice calls, will be taxed like telephone services and whether FCC charges paid by wireline and wireless phone customers will be applied.

--Bruce Meyerson, Associated Press

Energy: Daniel Yergin, chairman of Cambridge Energy Research Associates

The improving U.S. economy, coupled with political instability in some major crude oil-producing regions, is likely to keep upward pressure on oil prices in the near term, Yergin says, and that could mean higher costs for heating oil, gasoline and other refined products.

"The key factors for oil prices in 2004 are Iraq, Russia, world GDP and China," he said.

In Iraq, the question will be how quickly oil production and exports grow amid a post-war reconstruction that has been slowed by sabotage. "The issue is security," he said.

ADVERTISEMENT

In Russia, the person to watch is President Vladimir Putin, whose jailing of the country's wealthiest man, an oil executive, rattled the nerves of Western investors eager to invest in that country's rapidly growing petroleum industry.

As far as worldwide demand for oil, Yergin expects rising car sales in China to compound the effects of an apparent global economic turnaround.

The weather is also an important, if underestimated, factor that influences consumption, determining the level at which thermostats are set this winter and how many road trips are taken next summer.

The U.S. natural gas market will experience turbulence for years to come, Yergin said, with supplies tight and prices high because of declining production. Imports of natural gas in its liquid state will help, but the infrastructure needed to boost this emerging trade will take years to build.

Fixing weaknesses in the U.S. power grid that were exposed by the Aug. 14 blackout will be a top priority and will likely lead "to a change in the organization of markets," Yergin said. First up: mandatory reliability standards.

-- Brad Foss, Associated Press

Semiconductors: Craig Barrett, CEO of Intel Corp.

After suffering the worst downturn in its history, the semiconductor industry began to bounce back to life in 2003 -- and it's expected to continue that growth in 2004 as consumers and businesses buy new equipment to take advantage of the latest innovations, Barrett says.

ADVERTISEMENT

There will be even more increases in the performance of microprocessors, the silicon-based "brains" of computers, he says. But those improvements won't be based solely on jumps in raw speed.

Chipmakers will enhance performance by enabling technologies that squeeze more work out of each microprocessor even at the same "speed," or clock cycle.

Chips with multiple processing engines are in the pipeline, as are chips that can handle multiple operating environments and others that provide hardware-based security.

"There are a lot of auxiliary technologies that are starting to be incorporated in microprocessors, which will come out over the next couple years," Barrett said.

As the market grows, the chip industry also is focusing on specific segments.

In 2003, for instance, Intel pushed mobile computing and wireless networking with its Centrino chip. Wi-Fi wireless networking is not overhyped, Barrett said, because it grew from user demand, "not a statement by a bunch of CEOs that this is what people want."

In corporate computing, Barrett sees both a challenge and an opportunity with concerns over security.

"An upgrade is more secure than last year's technology. ... It may well drive corporate upgrades," he said.

--Matthew Fordahl, Associated Press

What To Read Next
Caitlin and Jason Keck’s two-year term on the American Farm Bureau Federation committee begins next month.
The Minnesota Public Utilities Commission met on Jan. 5, 2023, to consider the application for Summit Carbon Solutions.
Qualified Minnesota farmers will receive dollar-for-dollar matching money to purchase farmland.