THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, July 16, 1996 TAG: 9607160248
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 77 lines
Cox Communications Inc., Hampton Roads' dominant cable-TV operator, got the green light Monday from the State Corporation Commission to try its hand at a new business: local-exchange phone services.
Meanwhile, another would-be contender in local phone services, AT&T Corp., announced it will ask the public-service commissions in Virginia and several other mid-Atlantic states to arbitrate its dispute with Bell Atlantic Corp. on the terms of coming competitions.
In winning its certificate, Cox will join a parade of telecommunications companies preparing to challenge the local phone monopolies now enjoyed in Virginia by Bell Atlantic and GTE Corp. State regulators had in recent months given go-aheads to a half-dozen other would-be competitors, including AT&T and MCI Communications Inc.
The various moves are part of a nationwide market free-for-all in which phone and cable companies, unleashed in the last year from decades of state and federal restraints, are rushing to become one-stop communications providers.
At the same time that Cox is laying plans for local telephone service, for instance, Bell Atlantic is preparing a ``wireless cable'' offering that, when introduced early next year in Hampton Roads, will challenge Cox head-on in its video turf.
Cox plans, at least initially, to confine its local phone offerings to Hampton Roads and the Roanoke area, where it is also the largest cable provider.
The company plans to use its newfound authority to almost immediately offer some new services to businesses, like wide-area networks that connect local factories and their suppliers.
But Dana Coltrin, who is managing Cox's phone efforts, said it will be a year or more before residential customers can switch to Cox Telephone. Cox has to complete a major upgrade of its cable system to enable two-way voice and data transmissions. That job is made all the more complex by the fact that Cox has acquired - or is in the process of acquiring - four smaller systems in the region that aren't nearly as modern.
Cox got a toehold in the phone business several years ago with the launch of a subsidiary known as Cox Fibernet. That unit offers about 30 commercial and government customers a wide range of services - from an internal phone network connecting all Virginia Beach public schools, to access to long-distance carriers for big phone users like Virginia Beach-based Christian Broadcasting Network.
Coltrin said he expects Cox Fiber-net to have as many as 150 customers by year's end.
As it plans to broaden into residential services, he said the company's business-related phone effort has given it ``a level of confidence'' that it can succeed. In addition, he said Cox has proven in technical trials that it can be a reliable provider of local-exchange services.
But Coltrin conceded that Cox has a lot of work to do to convince customers, who generally regard the service provided by cable outfits as inferior to that of phone companies.
One particularly promising market for Cox, Coltrin said, is access to the global Internet computer network. Cable companies are developing modems that they say will move data hundreds or thousands of times faster than is now possible using conventional phone modems.
Cox, because it has a system in place, also is in position to lease excess capacity to carriers like AT&T that have indicated they will enter the local phone-service arena through ``resale'' arrangements.
Indeed, AT&T officials have said they have already held talks with Cox managers. But Ma Bell's prime focus in Virginia has been on working out resale and interconnection terms with Bell Atlantic.
And to that end, AT&T officials said Monday they've been thwarted. Accusing Bell Atlantic's negotiators of bad faith, AT&T invoked its right to ask state regulators in Virginia, Maryland, Pennsylvania and New Jersey to arbitrate the matter. Under a sweeping telecommunications-reform bill signed into law earlier this year by President Clinton, the state commissions have until Dec. 1 to settle any disputes on opening up local-exchange monopolies. The commissions have the authority to impose their own terms.
Cox's Coltrin said his company, too, is trying to reach an agreement with Bell Atlantic. In Cox's case, one key issue is the fees the two carriers pay each other when exchanging phone traffic. by CNB