[Future - ADSL Price Wars]
Good article...expect the same battle as the Telephone companies
"premium price" ADSL to protect their other $$ data services...
<<NEW YORK -(Dow Jones)- A lobbying war has emerged in California between Baby Bell Pacific Telesis Group and semiconductor giant Intel Corp. over legislation proposed by Intel to establish a five-year cap on the fees that telephone companies can charge for high-speed data-transmission lines.
The proposal enraged PacTel and threatened to splinter the business community. Now, though, the California Legislature's Sen. Steve Peace has refused to introduce the fee-cap bill. Instead, the Chula Vista Democrat has agreed to preside Thursday over peace talks among the warring factions.
Any subsequent legislation might include some sort of rate cap; then again, it might not, says Peace. Among lobbyists and lawmakers alike, Peace's reputation for integrity and independence is well known.
PacTel's Pacific Bell unit has an estimated 115,000 ISDN, or high-speed Integrated Services Digital Network, lines throughout the state, and orders for the service are growing by about 5,000 lines a month. The lines allow computer users to move data at 128,000 bits per second, compared with a regular analog voice line that typically can move data no faster than 28,800 bits per second.
But there is a price. An ISDN line carries a monthly rate of $24.50, more than twice the monthly cost of an $11 to $12 regular voice line. And just last week, a state administrative law judge recommended that Pacific Bell be allowed to raise the ISDN rate to $29.50. A California Public Utilities Commission decision is expected later this week.
PacTel says it is vital to the success of ISDN and what comes after it that telephone companies be free to raise those rates to whatever the PUC and the market will bear.
But Intel's concern - and the concern of the influential California Manufacturers Association - is that no one is going to buy high-speed chips, modems and computers if the escalating price of phone lines keeps the service out of reach. A rate cap "is one very good vehicle through which you can protect the customer" as the regulated telecommunications industry makes its transition to an unregulated one, says the association.
Then there are companies like Mountain View-based Netscape Communications Corp., which can't take sides on the fee-cap question because it has so many customers across the telecommunications spectrum. "We've got to be like Switzerland, trying to remain neutral," says a Netscape official.
Another challenge is that many high-tech companies dabbling in the Internet have an ambivalence, if not downright revulsion, toward any government involvement in their affairs.
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Transmitted: 3/5/97 9:42 AM (L100SHdX) >> |
