ISDN’s move into suburbs triggers rate hike request – integrated services digital networks – News of the Week
In California, ISDN is making a quick move from the workplace to the suburbs – and Pacific Bell wants to raise its prices for ISDN because of it.
The number of ISDN lines installed 3 miles or more from central offices has jumped by a factor of six over the past 10 months – from 5% of Pacific Bell’s 60,000 installed ISDN lines to 30%.
With a stated goal of 1 million ISDN lines installed by 2000, Pacific Bell projects that the percentage of home users will increase to 70% by the turn of the century.
On the same day these numbers were released, Pacific Bell filed an application with the California Public Utilities Commission, seeking permission for a rate increase. The telco cited the high installation cost in outlying areas and user demand that exceeded its expectations.
“We’ve had a promotional tariff in place until we could gain enough data about ISDN,” said Tom Bayless, Pacific Bell’s switched digital services director. “At this point, interest in ISDN is really starting to pick up because Internet service providers are just starting to offer ISDN Internet service, and telecommuting is taking off. The usage packages we’ve proposed to the [PUC] won’t hurt ISDN’s growth, and we wanted to make these changes sooner rather than later.”
“It’s a sign that ISDN is no longer a technology Pacific Bell is desperately trying to get people to adopt,” said Eileen Healy, an analyst with Dataquest. “Now, enough customers are finding need for ISDN that Pacific Bell can focus on making it profitable.”
Pacific Bell’s ISDN users had been granted unlimited evening and weekend use, which the company said caused many of those users to never turn off their lines during those times. Pacific Bell sought a series of increases that would add a 1[cents] per minute per channel charge for home users, on top of the current $25.50 per line rate.
While the increase will result in most consumers paying $6 to $7 more per month, Bayless said, users who often use both channels of their ISDN lines for downloading large amounts of data will see a larger increase on their bills.
“One cent a minute isn’t an overwhelming increase, but it’s significant for Pacific Bell, which has the lowest ISDN rates in the country,” Healy said. “This will bring them more into balance with the nationwide average for ISDN fees.”
While some customers have been grumbling about the rate increase, Bayless said the move shouldn’t hurt ISDN’s fortunes in California.
“I think any negative reaction will be fairly short term,” he said. “We’ve tried to keep the price low so entry is easy, and there’s a measure of control in place so that if you use your lines a tad less, you’ll save money.”
Pacific Bell’s application calls for an increase that would double the rate businesses pay for service, and it would impose an installation fee of $125 for home and small business customers and $150 for large business customers using Centrex ISDN lines.
Installation is currently free when users commit to two years of service. Customers who made a two-year commitment will not be penalized if they cancel the service because of the rate change.
While ISDN has long been seen as a way to permit practical telecommuting, Bayless said businesses have embraced the concept more quickly than was anticipated.
“Now, 80% to 85% of all lines lead into homes,” he said. “A lot of us thought of it as a voice thing rather than a data thing, and now with applications for allowing e-mail, fax, data and video, as well as voice, we’ve got a better idea of ISDN’s potential.”
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