Two telcos lure Net users
Pac Bell and Bell Atlantic Plus ramp up efforts to wire Americans to the Net.
Bell Atlantic Plus (BEL) and Pacific Bell (PAC) both unveiled plans to lure more consumers online.
Pac Bell today announced a new addition to its $100 million program for putting computer technologies in California classrooms that would give 50 percent discounts on high-speed Net access to more than 9,000 public schools in California. Bell Atlantic said it will open a $26 million "one-stop shopping" customer service center for of all its telecommunications products, including Net access.
The moves signify two growing trends: More private companies are wiring schools at discounts, and competition is growing between telcos to rope in Net customers, partly a result of last year's telecom deregulation. Pac Bell's Education First program has been working to put computer technology in the state's classrooms since 1994. Its latest effort, however, is likely to put the company in a good light with state and federal officials.
Governor Pete Wilson is trying to push his "Digital High" plan through the state legislature now; it calls for high schools to be hooked up to the Net in order to create more computer-savvy graduates.
At the federal level, universal service is undergoing reform, which could include subsidies for school Net access through fees phone companies pay. Under the final plan, due in May from the Federal Communication Commission, local telcos might have to pay more toward federal subsidies on rural and low-income phone service, among other things.
"Vice President Al Gore has been very vocal that he wants some of that money to go to schools and libraries. Pac Bell is giving the government something it really wants," said Boyd Peterson, a telco analyst for the Yankee Group.
"Pac Bell is preemptively providing the service that the administration wants to see in the hopes that they will be in a favorable position when the government comes around to implementing access reform. It's a very timely political move on their part," he added.
But Pac Bell says its efforts are simply good business. As the largest private employer in California, it needs to help the state's youngsters become familiar with technology or the company will have an unskilled workforce in the future.
"The offer isn't related to the universal service issue at all," said Michael Powell, group director for Education First. ""California is so far behind other states when it comes to technology in the classrooms that businesses must step up and help when they can. If students don't get a 21st century education, they're not going to attract better jobs."
The Bell Atlantic plan to build a Virginia-based customer service will also bring more consumers online, but not with discounted service.
In order to grow in the increasingly competitive Internet market, telcos must improve customer service. The center will open this summer and will employee 700 people by year's end to take orders and offer tech support for Net, cellular, and paging services.
Virginia is a good place for information technology companies to set up shop because it offers lucrative tax incentives. (See related story)
"This is part of a much larger trend in the growing multiservice environment. The way all these services will be differentiated is by how they can best serve the customer at a good price," Peterson said. "If Bell Atlantic is successful in getting a lot of more their customers on the Net, the need for customer care increases dramatically. More of mainstream America will be those customers, and they're not as computer-savvy."