INTERVIEW: Jack Conroy, WinStar's MAA wizard

CONROY: This reminds me of an actor who struggles for 20 years to become an overnight success. I tell people we are another competitive local exchange carrier, except we can bypass the regional Bell operating companies. We operate primarily in the 38- to 40-GHz wireless radio band for the last mile.WinStar Communications Inc. was formed in 1994 by a bunch of MCI Communications Corp. alumni. In 1995 we began doing point-to-point links on a wholesale basis to get our feet wet, until we had enough capital to go into the local phone system.We had a five-year plan. When the Telecommunications Act of 1996 was enacted, our five-year plan became a five-month plan.I came on in 1996 as the 50th employee.CONROY: In early 1997, a friend of mine at GSA said, 'We're running this program called the Metropolitan Area Acquisition, you ought to look at it.' We said, 'We can't do this; we aren't built out enough.'But the MAA program took GSA a little longer than expected to get going.We built out Chicago in March, April and May of 1997, and by September we had built out San Francisco. The MAA solicitations still hadn't come out.In late 1997, GSA put out a request for qualification. I was the vice president of operations. In January 1998, I submitted it and told the company, 'You've got to get somebody on this full-time, this is not a part-time job.'Then, I went back to being an engineer.In March 1998, the first request for proposals for the first three cities came out. In May, my boss told me my future lay in running the federal group full-time. So on June 2, I came over. The reason I remember it so well is that they called up and said, 'You're running the federal group now'and by the way, we're suing the federal government.'The premise was that the statements leading up to the MAA solicitations recommended multiple awards, but when these things came out, they called for single awards.Our counsel said, 'I think we ought to make a point of this and protest it.' We won the lawsuit, so GSA changed the wording to allow multiple awards.CONROY: If you can make it in the federal government, you're a credible company. The analogy is that Sprint Corp. was not really a name until it won FTS 2000.I can make margin at a good price to the government. I can underprice the existing tariffs because I'm high-tech and low-labor.CONROY: Blood, sweat, tears and toil, and the fact that we were able to get good prices on the technology. My whole premise was assuming multiple awards.We bid on the first three MAAs and lost to AT&T Corp. They were not multiple awards because the difference in price was so great that the government did not see how a second contractor could be competitive if the first one's prices held. So we licked our wounds.The next round included five cities: Baltimore, Buffalo, N.Y., Cincinnati, Cleveland and Los Angeles. We won the three that we bid on. It proves our premise that we can do things quick and cheap.We didn't bid on Buffalo because when the bid came out, I knew we wouldn't be ready for Buffalo until the second half of this year, and I didn't want to make promises I couldn't keep. Cleveland was a similar situation. We were maxing out the switch there, so I said I didn't want to go there and not be able to give premier service right away.Writing the proposal was the easy part, and that ain't easy at all. Now I have to put my money where my mouth is and prove that I can deliver.CONROY: We are going to continue to be a participant in the rest of the MAAs. A number of agencies don't use GSA; they do their own communications. We want to address them. We also want to penetrate the Defense Department. We're a subcontractor on Vivid [the Navy's Voice, Video and Data contract]. The Navy-Marine Corps Intranet contract is forming the strategy for what the Navy is going to do next. I want to talk to the Air Force and the Army as well. Each service is different.I want to serve the entire government where I can, primarily that is in the central business districts. But because I'm radio, I'm a natural for DOD campus environments that are not near a city. I don't want to claim that I can serve the border between Minnesota and Canada or a forest station 20 miles out of Butte, Mont. But most of the government happens to be in central business districts, where we are.CONROY: The federal market is much more stringent in contractual requirements, much more regimented in how you conduct a proposal.I have to compliment GSA for getting very flexible in its contracts. Everything we're doing today is already obsolete. Somewhere in the lab is something that is going to replace what we're doing. Industry can react quickly, so trying to work with the government to let it have flexibility is a challenge.When I was with IBM Corp., I won the first build-out of LANs for the Administrative Office of the U.S. Courts. We bid the IBM PC AT. It was obsolete between the time we put in the bid and the award. IBM and everybody else announced they were getting rid of the AT and going to the 386. So we put in a contract modification: At no expense to the government, IBM would substitute 386s for ATs. And the court said, 'You bid ATs; you're going to give us ATs.' So we had to go out and buy our own computers because we didn't make them any more.One of the neat technologies the government can look forward to getting from WinStar is the right bill. I have had more complaints from federal agencies about inability to get a flexible bill. One guy told me he'd had a contract for eight years and had never gotten the right bill.The government wants us to bill by the call, by the minute, by the location, to different charge numbers. What we've done is separate the collector from the biller. We can program in to bill a different charge number for every phone call.We are watching all the new technologies. On the MAAs we want to offer frame relay, asynchronous transfer mode and Internet access, which are not on the current MAAs. We offer that in the commercial world.CONROY: We do that today for our commercial customers. We are connecting 60 major markets with long-distance fiber. In five years, we recreated what took the Bell system 100 years. We can offer voice, video, frame relay, ATM, Internet, local, long distance'all on one bill.As GSA opens things up, we'll apply to offer those services. We will see if we can effectively compete in FTS 2001.The Treasury Department is probably not ever going to use me as its main long-distance provider. But regional offices can bundle everything and get one bill, and the effective overall price is about the same.Don't look to see me scaring WorldCom Inc. or Sprint Corp. out of their boots.