SBC vows faster service/ Baby Bell plans to spend $6 billion on state-

0 Comments | Gazette, The (Colorado Springs), Oct 19, 1999 | by Chicago Tribune

CHICAGO - SBC Communications Inc. vowed Monday to spend $6 billion to upgrade its local phone networks, so it can deliver ultra-high- speed Internet access and dramatically cut costs of carrying voice calls.

While most telecom executives agree that traditional local networks must be rebuilt to provide lightning-fast digital data services, SBC's announcement is the most ambitious yet from a Baby Bell.

"All the local phone companies will have to do this, but SBC is showing leadership by being the first to outline its plans," said Blaik Kirby, a vice president for the Boston-based Renaissance Worldwide consulting firms.

Kirby said that moves by AT&T Corp. to build a cable TV system that will provide voice and high-speed data connections give local phone companies no choice but to upgrade their own systems rapidly.

"This is driven by customer demand," said Kirby. "SBC would lose customers to cable companies if it did nothing, and the customers it would lose are the ones who spend the most on telecommunications."

Edward Whitacre Jr., SBC chief executive, said the upgrade aims to convert the traditional voice-oriented network that also carries data into a digital data network that will carry voice as packets of data, instead of traditional dedicated circuits. Packetized voice service - not yet a readily available service option - is potentially far more efficient and cheaper than circuit-switched service.

Whitacre said Monday that he expects to reduce operating costs by rebuilding SBC's local networks. Another goal of the upgrade, which Whitacre called Project Pronto, will be to provide more reliable Internet connections than customers have been able to get in the past.

"With Project Pronto, SBC will lead the nation in speeding the widespread availability and meeting the demand for broadband services," Whitacre said.

Reworking traditional phone networks makes financial sense because while voice traffic has been growing at a slow and steady rate, data transmission growth is exploding, said Jeffrey Kagan, an Atlanta- based telecom consultant.

"The future is data, not voice, and SBC obviously intends to be a leader as a data service provider," said Kagan.

SBC's plans call for having high-speed data connections available to about 80 percent of its customers within three years. This will be done using a technology called digital subscriber line - or DSL - to boost the amount of data copper wires can carry radically. SBC also plans to install another 12,000 miles of fiber optics in its local phone systems to boost capacity.

The radical remaking of its existing phone networks along with its already announced intentions to enter 30 new markets - including Denver - during the next three years give SBC an enormously challenging task.

But it is no more daunting than AT&T's efforts to remake much of the nation's cable TV hook-ups or the plans to integrate MCI/ WorldCom with Sprint Corp. to form a new company.

While Ameritech executives have promised to offer DSL service to Chicago area customers for about three years, the firm has done little so far to deliver, and most DSL high-speed data connections in the Chicago region are provided by Ameritech competitors.

- Headline by Jim Wilson