Date: Sun, 13 Sep 92  21:02:03 EDT
From: Paul Robinson, Contractor <FZC@CU.NIH.GOV>
Newsgroups: comp.dcom.telecom
Subject: Alternate NON-TELCO Local Phone System Tested
Reply-To: TDARCOS@MCIMAIL.COM
Organization: TELECOM Digest
X-Submissions-To: telecom@eecs.nwu.edu
X-Administrivia-To: telecom-request@eecs.nwu.edu
X-Telecom-Digest: Volume 12, Issue 711, Message 1 of 8

Alternative Local Phone System Tested
{Such Networks Could Eventually Compete Directly With Baby Bells}
[Washington Post, September 11, 1992, Page F1]
By Paul Farhi and Cathy Skrzycki
Washington Post Staff Writers

   Brian Roberts made a phone call to London yesterday.  In the
process, he made a little bit of history - and may have opened a
window on the future.

   Roberts' call, initiated from his office at Comcast Corp in
Philadelphia, was transmitted to London via an unusual network, a
patchwork consisting of fiber-optic phone wires, wireless cellular
connections, a satelite relay and even Comcast's cable TV lines.  But
what was most significant about the call what was {not} used to
complete it: the conventional phone network owned by the local phone
company, Bell Atlantic Corp.

   The call was set up by Comcast, the fourth-largest U.S. cable firm,
to demonstrate what could be an important telecommunications
development of the 1990s.  Through a combination of technologies,
companies like Comcast and others are moving closer to establishing
duplicate local phone systems to compete directly with the regional
Baby Bell telephone companies that hold monopolies over local service.

   This competition, not possible a decade ago before the breakup of
the old Bell System, has already begun in fits and starts for business
customers.  Industry analysts say it could start to become available
for residential customers in a few years.  If so, it would spur price
competition among local phone service providers, much as the advent of
MCI Corp., Sprint Corp. and other alternatives to AT&T set off price
wars in the long-distance market.

   To foster this kind of development, the Federal Communications
Commission is expected next week to rule that conventional phone
companies must make their sophisticated equipment and lines available
to outside competitors, thereby enabling these upstarts to expand
their networks.

   These companies, known as alternative access carriers, now are in
the business of ferrying calls among offices and businesses along a
limited network of private lines.  If the FCC rules in their favor
next week, they will be able to lease Bell companies' phone lines and
use their switching systems.

   Royce Holland, president and chief executive of Metropolitan Fiber
Systems, Inc., which has an extensive fiber-optic network in the
Washington area, said that if the commission lets companies like his
tap into the local phone companies' systems, "It's D-Day.  It's the
Normandy invasion.  We've established a beachhead."

   Comcast's demonstration yesterday showed that access to these
switches may not even be necessary; Comcast bypassed the local phone
system by jury-rigging a network in conjunction with a satelite
company, and its own cellular, cable and alternate access businesses
to route a call to four locations, ending up in Britain.

   Comcast is one of many companies that are experimenting with
adapting cable television lines to carry telephone conversations via
an emerging wireless technology called personal communications
services.  (The Washington Post Co. is conducting a PCS trial in the
Washington area.)

   The seven regional phone companies publicly say they welcome
competition.  But in return for opening themselves up to this rivalry,
they want major concessions, such as more flexibility on rate
increases and permission to own and program cable TV systems.  They
also want their phone competitors to bear the same burden for
providing universal service to customers, the least profitable part of
the phone business, instead of being allowed to serve high-paying
business customers.

   Referring to the cable industry's interest in providing phone
service, Stuart Johnson, president of regional services for Bell
Atlantic, said, "One company or one industry should not continue with
monopoly status while we are regulated," Bell Atlantic owns the
Chesapeake & Potomac Telephone Cos., which serve the Washington area.

   But while the battle is being fought over who should be allowed to
be a phone company, a larger war looms over how far federal and state
regulation will allow real competition to go.

   "There is no question that all of this stuff can be reconfigured
any way people want to do it," said Norman Black, a spokesman for the
Cellular Telecommunications Industry Association.  "The challenge is
whether regulators can deal with the reality of competition and
technology.  There is no doubt we're in for a collision" between
governmental bodies and nontraditional phone companies.