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ISDN supporters lodge complaints

The joke used to be that ISDN stood for "It Still Does Nothing." Now some consumer advocates say it may be that the telephone companies aren't acting as if they really want to sell it to you.

The joke used to be that ISDN stood for "It Still Does Nothing." Now the joke may be that ISDN can do a lot to access Web sites with audio, video, and high-resolution graphics, but the telephone companies aren't acting as if they really want to sell it to you.

For many residential and small-business users tired of surfing the Web in slow motion on regular phone lines, ISDN (Integrated Services Digital Network) is the next step up. Around for more than a decade, it is the souped-up digital version of the lowly telephone line that runs at a transfer rate of 128 kbps--more than four times the speed of the 28.8-kbps modem now commonly used. Proponents say ISDN is overdue to become the next standard for digital transmission.

But both consumers and computer vendors claim that the Baby Bells, from whom most home and small-business users get their ISDN services, are charging far above cost and dragging their feet in expanding the market. And further, with new higher-speed technologies like cable modems and ADSL (asymmetric digital subscriber line) in serious technology trials around the country, the window of opportunity for widespread ISDN acceptance may have already closed.

The Bells counter that it's a chicken-and-egg problem: there's not enough demand yet to justify volume pricing or a wider infrastructure. After all, the telecommuting boom that is fueling a lot of the interest in ISDN installation just took off in the last year, said Tom Bayless, director of switched data services for Pacific Bell.

That answer is unsatisfactory to many who say that, unlike other high-bandwidth technologies such as cable transmissions, ISDN could be widely available right now and that complex and inflated price schemes are keeping those benefits from many users.

Each Baby Bell has a different pricing scale, but the complaints that surface regularly include: rates that don't compete with those available in the next state; usage rates that charge consumers for every minute spent online; rates that charge more for off-peak use than for prime-time use; rates that charge more for data traffic than voice traffic; and higher rates for customers farther away from the big exchange centers.

"They see it as an annoyance when a rural customer asks for ISDN," Gabriel Garcia says referring to Southwestern Bell (SBC). Garcia, assistant public counsel with the Texas Office of Public Utility Counsel, recently negotiated a new ISDN price structure with SBC.

The new prices are closer to what many consumer advocates want--a flat monthly fee instead of usage charges by the minute--but Garcia is still unsatisfied. His complaint is that SBC is still charging $86 a month to customers in "foreign exchange" areas---areas a proscribed distance from an established exchange center--in addition to the $46 flat fee. These foreign exchange areas are both suburban and rural, and Garcia says the added cost basically prohibits the acceptance of ISDN in these areas.

"The companies will argue that there's not a lot of rural demand. But is there [less] demand because prices are so high? From an economic development standpoint, rural communities have a lot to gain from this technology," he said.

Consumers aren't the only ones raising a ruckus. High-tech giants like Intel and Microsoft are also leaning on the local telephone companies to lower their prices.

Intel senior attorney Dhruv Khanna served a formal complaint to the California PUC in January when Pacific Bell proposed to double prime-time usage fees. Pacific Bell recently changed its proposal--instead suggesting a $8-a-month flat-rate increase--but Khanna isn't mollified, even though Pacific Bell's rates compare favorably to those of many other service providers.

"Pac Bell is heading down the wrong path. It's not in the interest of our customers, the PC users. The appropriate response is to increase supply, not rates. That would be the correct response of the competitive marketplace."

Like Intel, Microsoft has decided to help consumers pull the baby Bells forward. It recently set up the Get ISDN Web page, a one-stop ISDN shop where surfers can order both hardware and software designed to ease the pain of ISDN implementation.

Charles Fitzgerald, who oversees the Get ISDN program for Microsoft's Internet Platform and Tools Division, said customer response has been brisk but conceded that dealing with the local telephone company to set up ISDN service can be off-putting to many users. "We want to get the PC well-connected," Fitzgerald says, "but the local loop is an enormous bottleneck."

Even when they lower ISDN prices, some Baby Bells can't seem to make everyone happy. Bell Atlantic says it is preparing to cut residential rates substantially in an attempt to deliver ISDN to more than 90 percent of its telephone customers in Virginia, West Virginia, Delaware, Maryland, Pennsylvania, New Jersey, and Washington, D.C. But Bell Atlantic does not intend to eliminate the per-minute usage fees that critics claim are the greatest barrier to widespread ISDN access.

It's not just the fault of the telephone companies; some say the state utility agencies are responsible as well.

The state utility commission must approve the rates that the Baby Bells propose, and in some cases the high rates are to largely a reflection of commission policy. "Some think rich ISDN users should get hosed," said James Love, director of the Consumer Project for Technology (CPT), a consumer advocacy group that promotes the use of ISDN.

The result is wildly fluctuating rates from region to region. Illinois residents, for example, lease ISDN lines from Ameritech for $39.50 a month. Neighbors in Indiana also get service from Ameritech but pay a whopping $314.83, according to Love.

Still, Love and others think that if the Baby Bells were committed to ISDN, they would be able to get prices down to a much more affordable $20 a month. Some even suggest that the real reason that ISDN rates aren't lower after a decade of promotion is that the Baby Bells are afraid of success.

"There's a potential that ISDN will upset the apple cart," says analyst John Robb at Forrester Research in Cambridge, Massachusetts, referring to the Baby Bell's status as regulated monopolies. "Once you [move into ISDN], you're competing against other industries. The pressure starts to mount to deregulate you. They're in a nice, cozy situation right now."

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Bell Atlantic to cut ISDN prices
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Pac Bell wants flat-fee hike for ISDN
Vendors introduced kinder, gentler ISDN
MS opens online ISDN boutique
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