New horizons in communications - telecommunications technologies; includes related article on new telecommunications options likely to result from passage of the Telecommunications Act of 1996 - Small Business Technology: Enterprise 2000

Nation's Business, August, 1996 by Tim McCollum

Small firms stand to reap the benefits of competition among the providers of emerging information technologies.

To get to Lou Ann Hammond's automobile-finding service, you can take the superhighway--the information superhighway.

Hammond's four-person company, Car-List Inc., in San Francisco, uses computers and high-speed telecommunications links to serve car buyers who want to find the vehicles they seek at prices they're willing to pay without the hassle of shopping in person.

Under the system of links, compurer terminals in 15 credit unions throughout California give customers access to Car-List's database of new and used cars, providing an important convenience to shoppers. The database contains current information about prices, features, and the availability of vehicles at selected dealerships and among individual sellers statewide.

Hammond views Car-List's three-year-old arrangement with the credit unions as a natural progression. Her company began 11 years ago with a used-car listing service that could be tapped into with a phone call. This latest service simply brings car shopping and financing together in a convenient setting.

The Car-List database computer and the computers at the credit unions are linked with the latest in telecommunications networking technology,, ISDN, which stands for integrated services digital network.

ISDN gives people the equivalent of two phone lines by allowing them to access data and voice calls simultaneously. With phone equipment designed for the task--yet with conventional telephone lines--the user can connect to digital networks at four to five times the speed of the fastest current analog computer modems.

This technology, which is just beginning to be widely deployed, may eventually replace analog modems.

Hammond hopes that telecommunications technology ultimately will help her expand her business nationwide. Toward that end, she established a home page on the Internet's World Wide Web component last year. Each day the page hosts more than 15,000 visitors and receives about 50 requests for informational brochures.

The Web site's success, however, will depend not on the number of prospective buyers it attracts, Hammond says, but on the number of car sellers from outside California that she can add to her database.

Over the past several years, providers of telecommunications and information technology have promised to deliver to business people revolutionary ways to communicate with the buying public--ways that seamlessly blend telecommunications, computing, entertainment, and information services.

Now that Congress has passed the Telecommunications Act of 1996--the first major overhaul of the laws governing telecommunications in more than 60 years--new telecommunications technologies may become available faster, more universally, and at a lower cost to customers.

Signed into law by President Clinton in February, the act tears down many barriers between different telecommunications providers, and it promotes competition in everything from local and long-distance telephone service to cable television.

Telecommunications analysts forecast that the biggest benefit of the new telecommunications law for small-business owners will be a new ability to buy packages of telecommunications services--local, long-distance, and wireless calling as well as paging, voice mail, and Internet access, for example--from one company at one discounted price on one invoice.

Even though the Federal Communications Commission has not yet established the rules governing telecommunications competition, AT&T, MCI, Sprint, and several of the regional phone companies have begun to package services, many of them aimed at small businesses.

"The opportunity for one-stop shopping will be very appealing for small businesses," says Richard E. Wiley, a partner with the Washington, D.C., law firm of Wiley, Rein & Fielding and a former FCC chairman. "Some small businesses would just like one company to come in and do it all [for] one price."

But pervasive competition won't happen overnight. Industry analysts such as David Goodtree, of Forrester Research, in Cambridge, Mass., say the full effects of telecommunications reform probably won't be felt until 1997 at the earliest.

Nonetheless, small-business owners should start learning about, and malting plans for, the coming changes. Indeed, some of those promised changes are beginning to arrive. They include ISDN, wireless communications services, and wider use of the Internet. And, like Car-List, many small companies have been among the first to employ new technologies to enhance their businesses.

ISDN, for example, facilitates voice, data, and video transmissions over a single copper line, thus giving Car-List and other small firms communication capabilities rivaling those of large corporations.

Another new development that could have a major impact on small businesses, personal communications services (PCS) technology, is beginning to compete successfully with cellular telephone services in the Baltimore-Washington corridor, the first area where PCS has been offered. PCS networks in other areas are expected to begin operating this fall.