Microsoft's 4 modems via WindowsNT 4.0 (fwd)

[Richard Kashdan <richard@wideweb.com>]

  SAN FRANCISCO EXAMINER
  
  09/27 ISDN Rate Hearings Thrown For A Loop >Microsoft Offers Fast, Cheap
        Alternative
  
    San Francisco Examiner
    By Louis Trager
    Copyright 1996
  
    Just when state regulators thought the final arguments over raising ISDN
  Internet access rates had sounded, a technological bombshell exploded.
    During a debate described as a "culture clash between Bellheads and
  Netheads," the Public Utilities Commission learned Thursday that Microsoft
  Corp's newest operating system allows users to replicate the high-speed of
  ISDN lines at a fraction of the cost. 
    According to arguments heard by the PUC, users of Windows NT 4.0, can
  link four ordinary phone lines to four modems on their computer to
  duplicate the ISDN connection speed. 
    Such users would pay Pacific Bell about $60 a month for 24-hour-a-day
  World Wide Web, e-mail, fax and corporate network connections at 128
  kilobits per second. 
    By comparison, if Pac Bell's bid for a rate increase were approved, ISDN
  access would cost about $900 a month. Now, the Windows NT gambit threatens
  to jam the phone network and gobble up scarce phone numbers. 
    Frustrations, complications
    The 11th hour revelation shows the frustrations and complications of
  regulating Pac Bell's charges and services during the prolonged transition
  from its longtime monopoly to an era of deregulated competition. 
    David Frankel, president of Jetstream Communications, a home-office
  equipment company in San Jose, tried to reassure commissioners. He said
  few consumers would pay for four modems, and whatever premium charges
  Internet service providers imposed, in order to use the Windows NT for
  virtual ISDN access. 
    But PUC Chairman Gregory Conlan pondered whether the commission would
  have to reopen its completed hearings in order to take testimony on the
  issue. 
    "People are smart," he said. "They're going to figure out the cheapest
  costs." 
    The information that emerged Thursday is not part of the formal evidence
  in the case and therefore can't properly be considered in the decision. 
    Barring a delay, Administrative Law Judge Kim Malcolm said she expected
  to write a proposed decision within a few weeks and thought the commission
  would act on it before the end of the year. 
    Speed a necessity
    ISDN lines transfer data four to five times faster than traditional
  modems. The speed isn't just a matter of convenience; without it,
  multimedia and other data-fat uses simply aren't practical. 
    And though other fast network connections are coming - notably ADSL and
  cable hookups - they aren't going to be as widespread and economical as
  ISDN for years. 
    The PUC proceeding in The City sees the cable TV industry lined up with
  Pac Bell in favor of rate increases, and consumer groups allied with big
  computer companies in trying to prevent or moderate any rise. 
    "It illustrates the culture clash that exists between the computer
  industry and the telecommunications industry," said Robert Larribeau Jr.,
  representing the California ISDN Users Group. 
    Commissioner Jessie Knight said the tough case required regulators to
  weigh Pac Bell's financial arguments against "helping the roll-out of a
  new technology." 
    Pac Bell contends that current, PUC-controlled prices make the service
  unprofitable to operate. 
    Robert J. Mazique, senior counsel at corporate parent Pacific Telesis
  Group, suggested that ordinary phone subscribers were subsidizing the
  shortfall.  But under questioning by Commissioner Josiah Neeper, Mazique
  said the company was making up the difference. 
    Pacific Bell wants to raise rates by $8 a month to $32.50 for consumers
  at home and $33.75 for business, plus hourly usage fees. 
    More important to moderate and heavy users, the company would stop
  providing unlimited usage during non-business hours and start charging
  based on time after 20 hours a month. 
    75 percent use less
    Three-quarters of customers use less than that amount, the company says. 
  Off-peak hours over the cap would be billed at up to about 60 cents per
  hour. 
    A $125 installation charge would remain in effect, though some argued
  that six monthly installments should be allowed. 
    Opponents want rates held down, in order to advance California's
  high-tech future - and, not coincidentally for Pac Bell adversaries Intel
  Corp. and Compaq Computer Corp., sell more computer hardware. 
    Pac Bell has only 92,000 ISDN customers, 10,000 of them consumers, out
  of a California customer base of 16 million. Mazique acknowledged the
  company had no financial incentive to push the service now, but promised
  that would change if rates rose. 
    Critics don't believe Pac Bell is losing money on the service. 
    Some want the company to offer consumers unlimited service for $29.95,
  as the local phone company in Roseville does. Others, recognizing that
  users need some incentive to relieve the phone network by turning off
  their service overnight and while they're away from the computer, suggest
  a much more liberal cap of 200 uncharged hours. 
    Conlan repeatedly questioned whether Pac Bell's increase was justified
  by its costs, on top of an average $18.40 expense to provide regular phone
  service. 
    Russell Teasdale of the business-systems firm Internex in Santa Clara,
  said independent analysts in other states had found the added cost was
  less than $10 a month. 
    Pac Bell's charges are by no means the heaviest tolls on ISDN users. 
    They must own relatively sophisticated PCs, costing at least $1,500, and
  ISDN modems, costing a few hundred dollars more. 
    In addition to Pac Bell's ISDN line, they also must pay a service
  provider approximately $30 a month for Internet access. Unlike ordinary
  access that carries a monthly fee as much as one-third less, with
  unlimited usage included, all time on ISDN service is charged
  additionally. 
    (END)  09-27-96
    17 53 EDT