Bell offers distance but no Net packages

Regional phone company Bell Atlantic unveils a set of one-stop-shopping communications packages aimed at voice services--but without a Net component.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
4 min read
Regional phone company Bell Atlantic unveiled a set of one-stop-shopping communications packages today, just two weeks after federal regulators gave the Baby Bell permission to enter the long-distance market for the first time.

But despite the company's growing focus on its high-speed Internet business, the new bundles are aimed strictly at its voice services without a Net component.

Nevertheless, the company touted its new ability to link voice, Internet and wireless phone services, much as competitor AT&T began to do with its purchase of cable companies last year.

"We anticipate that as we enter this market we will be able to gain market share very quickly," Bell Atlantic CEO Ivan Seidenberg said in a press conference this morning. "This will strengthen other parts of our business, especially the Internet and data areas, as we're able to bundle services."

Bell Atlantic's new services, available initially only in New York state, give a first glimpse of what will soon trickle across the country as the other local phone companies--or "Baby Bells"--are granted access to the $100 billion long-distance market.

At prices ranging from 5 cents to 10 cents a minute for calls, Bell Atlantic's offer matches or beats recent price cuts from the likes of AT&T and MCI WorldCom.

The big local phone companies have sought permission to enter the long-distance market since 1996, when Congress passed a landmark law deregulating telecommunications businesses. But that law came with a catch: The Bell companies had to prove that they had opened their local phone monopolies to competitors before they could jump into the turf of would-be competitors like AT&T and Sprint.

Last month, Bell Atlantic was the first of the big local phone companies to clear this bar, winning approval from the Federal Communications Commission to offer long-distance service in the state of New York. AT&T is suing to block the service from going into place, but analysts expect little to come of the court action.

That means Bell Atlantic is free to pursue what has become a kind of holy grail in the communications business: bundling local and long-distance service, high-speed Net access and even mobile phone use onto a single bill in an attempt to capture every cent of consumers' communications dollar.

As a start, the company has produced a string of consumer packages that look strikingly similar to other long-distance bargains. Callers who don't use the phone much can get 10 cents-per-minute long-distance calls any time of the day, without extra fees.

If they sign up online, customers can get 9 cents-per-minute calls or 5 cents-per-minute calls on weekends. High-volume callers can pay $5.95 a month and get 5 cents-per-minute calls during off-peak hours and on weekends.

A package of local and long-distance calling, along with a range of services like Caller ID and three-way calling, is available from Bell Atlantic starting at $19.99.

But despite continual promises from the phone companies, and a growing focus on the high-speed Net business, few of them have meshed voice-focused offers with Internet services. Bell Atlantic says this is on the way but not until later this year.

"We'll begin to look at Internet, [high-speed digital subscriber line] and wireless," said Maura Breen, president of the company's long-distance division. "We really expect to be in the market with those packages this year."

Even AT&T, which has committed more than $100 billion to buying cable companies to offer local phone and high-speed cable Internet service, has yet to include Excite@Home cable Net access with its package of local phone services. Its dial-up WorldNet service is included in the AT&T Personal Network package, however.

That's not for lack of interest. Analysts say those packages will be coming, but they note that most consumers are more interested in getting local and long-distance from the same company than in seeing their Internet service rolled into the package. The telephone companies are catering to that market reality, they say.

"We all have to get our expectations in order," said Jeffery Kagen, an independent telecommunications analyst. "This is all going to happen market by market, technology by technology. They have to start offering it before they can integrate it."

Furthermore, Internet services are more difficult to add to the packages than is ordinary voice service, analysts say.

"[The companies] are definitely committed to voice and data integration; there is no question about that," said Carl Garland, an industry analyst with Current Analysis. "But that's more complicated from a provisioning perspective than it sounds."

Despite the recent marketing efforts boosting phone companies' high-speed Net services, they aren't yet as reliable as old-fashioned phone service. That has kept some of the companies reluctant to fold the Internet into their core service offerings, some analysts say.

"It's proving more of a pain to provision than was expected," Garland said. "The public relations effort is still ahead of what's available in the field."

Bell Atlantic's New York services will be available beginning tomorrow.