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Competition - On Hold
"Proximity is the name of the game," says David Ruberg, president and chief executive officer of Intermedia Communications, which at year's end was the only company offering local, long-distance and data-transmission services in all of the state's most populous metropolitan areas. "If you're not sitting near one of our fiber networks, the computer infrastructure is just not in place to make our system interconnect seamlessly" with the local phone network. "It will take us the majority of 1997 to get to where we run smoothly enough to move customers to our local phone service in bulk."
However slowly, competition is spreading. By this time next year, businesses in most Florida cities should have two or three choices for integrated telecommunications services. Based on the experience of the Orlando market, high-volume users could see savings on their overall telecommunications bills of between 10% and 40%.
Orlando aside, however, the biggest competitive battles are being waged before state and federal regulatory panels and in court:
Long-distance titans AT&T, MCI and Sprint want into Florida's $6-billion local phone-service market, but they are preoccupied with getting the Federal Communications Commission to mandate a reduction in the access charges they must pay local telephone monopolies on long-distance calls - charges that constitute as much as 45% of the cost of a long-distance call.
In the federal courts, 30 state utility commissions, including the Florida Public Service Commission, and the National Association of Regulatory Utility Commissioners recently joined in an unusual alliance with the regional Bell companies. They want states, not the FCC, to set the prices that the Bells charge for allowing competitors to hook up to the Bells' local networks. That case is pending in the courts.
In Florida, long-distance companies and some aspiring local phone service providers are chafing over a Florida PSC ruling that sets "loop access" charges for tapping into the BellSouth and GTE networks. They find the charges excessive. "The Florida pricing doesn't make any sense to us," says Tim Devine, a former assistant vice president for regulatory affairs for MFS Communications, a high-end data-transmission and Internet-access provider that recently merged with WorldCom. The price is lower in states like Minnesota and Illinois, he says, and MFS is likely to invest more heavily "where the price of access is more reasonable."
Kathy Pounds, director of Southeastern regulatory affairs at MCI, echoes Devine's comments, saying that the cost of loop access in Florida could force MCI to reconsider its investment in Florida.
Stan Greer, supervisor of carrier services for the PSC, says the PSC based the access rates on its best estimate of what it actually costs the old monopoly companies to maintain the local networks. And despite their complaints, companies including MCI and WorldCom continue to set up facilities in major Florida markets. Here's a breakdown of what integrated phone services are available now or will be available in the next few months in Florida's major metro areas.
Southeast: Intermedia Communications and MCI offer local and long-distance phone service, data-transmission, and Internet access. WorldCom plans to market a similar package of services by June. MCI also offers wireless. BellSouth offers local phone service, data-transmission, wireless and Internet access, but currently cannot sell long-distance under the terms of the 1996 federal Telecommunications Act, which deregulated the telecommunications industry.
Tampa Bay: GTE has local phone service, long-distance, data-transmission, Internet access and wireless. MCI will market a similar package early this year. Intermedia Communications offers local phone service, long-distance, data-transmission and Internet access. WorldCom has plans for a similar package by June. BellSouth plans to offer local and long-distance service in 1997.
Orlando: Former phone monopolies Sprint and BellSouth now compete for each other's customers throughout the metro area. Both have complete suites of services, except that BellSouth cannot currently provide long-distance under terms of the Telecommunications Act. MCI has local, long-distance, data-transmission, Internet access and wireless. Intermedia Communications has local, long-distance, data-transmission and Internet access. WorldCom plans to offer a similar package by June.
Jacksonville: Intermedia Communications offers local and long-distance phone service, data-transmission and Internet access. BellSouth markets local phone service, data- transmission and Internet access but currently cannot offer long-distance under terms of the Telecommunications Act. MCI offers long-distance service, data-transmission and Internet access.
What To Ask Before Switching Phone Providers
If competition does for local business phone service what it has done for long-distance and toll-free service, you can expect lower prices, more and better features, and better customer service. But it won't make the job of deciding which company to use any easier. Here's a list of questions that should help you make the right decision.
1. Can you integrate my local service with other services I need, such as long-distance, international, data, Internet, paging and cellular?
Itemize your favorites. The more integration, the simpler your life will be.
2. Can you give me one consolidated bill?
Not as important as integrating the services themselves, but nice to have.
3. Does your service include 911, 411, call waiting and call forwarding? What else?
You probably want 911 and 411, so be sure to ask specifically if they're included.
4. Will I have one point-of-contact for all questions regarding products and services?
Usually makes for better service.
5. Do you have customer service representatives available 24 hours a day?
Your single point-of-contact can't be available 24 hours a day, but somebody should be.
6. Do you have your own network or are you reselling my current phone company's service?
This will become less of an issue as the interconnections between alternative phone companies and the old monopolies become more modular and seamless. In the meantime, the more services the company can provide directly, the more responsive it can be to your needs.
7. Do you use SONET technology?
SONET technology provides an alternate route for your messages and data in the event of a cable break on the network. That makes SONET networks more reliable than older networks.
8. Can you save me money on my overall telecommunications charges?
This might be the first question that pops into your mind, but it won't mean a thing unless you're satisfied with the answers to the other seven questions.
