If you build it...: Bell Atlantic banks on FCC approval

Signaling its confidence that it will soon receive regulatory approval to offer data and long-distance services in its region, Bell Atlantic announced last week that it will begin building a long-distance data network next month.

The network, which will connect Bell Atlantic's 13-state region from Maine to Virginia, will be created under a separate subsidiary, Bell Atlantic Global Networks Inc. Under a five-year contract valued at more that $200 million, Lucent Technologies will supply the equipment and software. Stu Verge of Bell Atlantic will be president of the subsidiary.

The Bell regional holding company is acting on the assumption that the FCC will approve its request to waive rules that restrict Bell Atlantic and other RHCs from offering long-distance data service to their local customers. That request was filed in January, and if the FCC gives its blessing in the next six months, as Bell Atlantic estimates it will, Verge said the new data network will be ready to offer services in Boston, New York, Philadelphia and Washington by Jan. 1, 1999.

"We expect regulatory relief, and we want to be ready when it comes," said Joseph C. Farina, president and CEO of the Bell Atlantic Data Solutions Group.

The move follows similar plans by Sprint to construct a digital network. Such networks built in the RHC territories are aimed at filling customers' high-speed data needs.

The FCC allows the RHCs to build data networks but prohibits them from using them until they can prove they have opened their voice networks to competitors.

Given these rules of the 1996 Telecommunications Act, the RHCs have little choice but to be proactive when it comes to data, said Tom Nolle, president of CIMI Corp.

"The Baby Bells are recognizing that if they're going to compete, then they need to begin building the means by which to do so now and not wait for regulatory relief," he said. "The restraints on data networks are an unfair burden on the RHCs, but we're not going to see regulatory action fast enough for them to do anything else."

Bell Atlantic's new network will incorporate advanced asynchronous transfer mode, Sonet and wavelength division multiplexing technologies. The network will support services such as virtual private networks and audio and video streaming over the World Wide Web, as well as platform services such as Internet access and backbone transport and electronic commerce.

The RHC will offer ATM and Internet protocol-over-ATM services, Verge said.

"The ATM switches will have the ability to interface directly with an IP switch," said Verge. Bell Atlantic will be able to "route calls based on IP addressing using ATM switching," he said, adding that "ATM has standards built into it to shape quality of service that aren't fully developed IP networks."

At a press conference at Supercomm, Verge said the carrier is considering offering voice over IP or voice over ATM.

Nolle approved of Bell Atlantic's choice.

"ATM is a sensible foundation for a multiservice network," he said. "In the future, we will have an IP-dominated service landscape but not an IP-dominated infrastructure. Bell Atlantic has the right idea, and those people who are going to be IP-dependent will have their hats handed to them in the end."

Bell Atlantic also plans to extend its network to key cities outside its territory-cities to which its own customers want to connect, said Verge. To do so, the carrier will partner with other carriers, he said. "We'll follow our customers. We won't pre-invest and wait for them to come."