Pacific Bell to expand high-speed Net access
BY JON HEALEY
Mercury News Staff Writer
mercurycenter.com
Pacific Bell plans a major expansion for high-speed Internet access
service this summer, cutting the price and making it available to 5
million customers across the state, company officials said Wednesday.
The move came in response to pressure from a key state senator and
high-tech industry officials, who argued that the demand for
high-speed service was burgeoning and competition was growing.
Pac Bell had already fallen behind at least one start-up company in
the race to bring businesses low-cost Internet connections, and other
competitors are quickly expanding.
What's unique about Pac Bell's new plan is how broadly and rapidly it
hopes to spread the service, which uses digital technology to soup up
ordinary copper phone lines. By mid-September, company officials
said, it will make high-speed Internet access available to homes and
businesses in about 200 communities.
Many of those homes and businesses are in areas already served by
competitors, but there are some notable exceptions. These include
Oakland, East Palo Alto and Compton -- three areas whose low
incomes have discouraged investments in technology.
Pac Bell's prices, however, are not likely to attract low-income
families or casual Internet users. The prices run from $89 a month for
homes to $339 a month for businesses, not including installation or
equipment costs.
''$90 a month, that's the threshold of pain,'' said analyst Will Strauss
of Forward Concepts in Phoenix. ''All the people who read Wired
magazine are going to buy. But they're going to have to get it to $60 if
they want the people who read PC Magazine.''
Michael Powell, a product manager for the high-speed service, said
the company was focusing first on telecommuters and small
businesses, not the mass market of average consumers. ''What we're
bringing out today is what we believe is right for us at this time,'' he
said, adding that he expected prices to drop over time.
The new service is based on a less expensive technology --
asymmetric digital subscriber line, or ADSL -- than some other
approaches to high-speed, high-capacity networks. This approach
moves data on copper lines at seven to 30 times the speed of the
fastest conventional computer modem.
Pac Bell had been cautiously exploring the new technology,
conducting a year-long test followed by a lengthy market trial in much
of Silicon Valley. Jim Callaway, president of Pac Bell public affairs,
said company officials agreed to step up the pace after state Sen.
Steve Peace, D-El Cajon, brought them together with officials from
Intel Corp. and other members of the California Manufacturers
Association. Peace is chairman of the Senate Committee on Energy,
Utilities and Communications, the panel with jurisdiction over phone
companies.
Richard Hall, manager of public affairs for Intel, said the
manufacturers convinced Pac Bell that the public was more interested
in high-speed Internet access than Pac Bell had believed. Pac Bell
officials, in turn, urged the manufacturers to support the company's
efforts to end state regulation on its profits.
''We applauded what they did today, but we still believe they need to
push the price points down'' for home users, Hall said. Noting that
SBC Communications, the Texas-based parent of Pac Bell, is new to
California, he added, ''This is an opportunity for them to demonstrate
their commitment to California and their technological commitment to
this state.''
The expansion should start in June, company officials said, and should
be finished by late August or September.
To be eligible for the service, users must be within about three miles
of one of 87 Pac Bell offices in 63 cities. Pac Bell officials estimated
that 60 percent of the 4.4 million homes and 650,000 businesses
served by those offices would be able to obtain the new service.
The Bay Area communities to be served include parts of San Jose,
Fremont, Hayward, Los Altos, Milpitas, Mountain View, Oakland,
Palo Alto, Pleasanton, Redwood City, San Francisco, San Mateo,
Santa Clara and Sunnyvale.
Pac Bell already offers ADSL service in much of that area on a trial
basis, but at higher prices. Residential service costs about $160 per
month and business service costs up to $400.
Also providing digital subscriber line service in Silicon Valley are
start-ups Covad Communications Co., NorthPoint Communications
and Rhythms NetConnections Inc., as well as UUNet, a venerable
Internet service provider.
Jim Southworth, director of advanced network services and
technologies for Concentric Network, a Cupertino-based Internet
service provider, said Pac Bell's effort would not expand greatly the
availability of high-speed services in most parts of California. ''You've
got probably that same level of deployment coming from most
everybody else that's in the game,'' he said.
On the other hand, Pac Bell is venturing into several communities that
its business-oriented competitors have avoided. That strategy drew
praise from advocates for several public-interest and non-profit
groups.
Barbara O'Connor, founder of the Alliance for Public Technology,
said the high-speed service was expanding just as subsidies were
starting to flow to schools, libraries and non-profit groups for Internet
connections. The combination should help groups at the grass roots
develop technologies aimed at local needs, O'Connor said.
Still, Pac Bell's prices are far higher than those charged for the
high-speed Internet service on some cable TV systems, which costs
less than $50 a month. The problem there is that few cable systems
are able to offer the service.
Andrew Johnson, a spokesman for Tele-Communications Inc., said
Pac Bell probably will beat TCI's cable-modem service into
numerous Bay Area communities. But he predicted that TCI's service
will prevail in head-to-head competition because it is cheaper and
faster. |
