Lassos around Texas: Southwestern Bell, AT&T Solutions land statewide contracts

In what appears to be one of the first of many state and local government networks in planning or underdevelopment, the state of Texas has signed two contracts for its statewide telecommunications network, the TEX-AN 2000. Under the AT&T Solutions contract, which is valued at $250 million over the next five years and up to $1 billion over 10 years, the AT&T division will design, build and operate the backbone network. In the Southwestern Bell $300 million contract, the company will provide local, asymmetrical DSL and wireless phone service, IntraLATA toll, firewall systems and data and video equipment.

The network will be a mix of ATM and frame relay and will link 250 state and local government agencies and 4500 other sites such as municipalities and school districts. Voice, video, data and Internet services will be integrated over the network.

"We decided to take a different approach with this network than we had in the past," said Steve Parker, director of telecommunications for Texas' General Services Commission. Although the state designed and built past networks to its own specifications, AT&T Solutions only was given distinct outcomes that the state wanted to achieve with the TEX-AN 2000 project, Parker said. "We didn't want to limit the creativity of the vendors."

With GSC's multivendor approach, both AT&T and Southwestern Bell will reap the benefits of providing services such as local and long-distance voice and data services, data networking and access, wireless service, Internet access, Web hosting, calling card services, equipment purchases and installation services.

"The local services area really represents the largest opportunity for revenue stream for us," said Charlie Trammell, regional vice president of Southwestern Bell. "It is another great vehicle for us to continue selling services to customers." Southwestern Bell also will be the sole provider of some equipment.

AT&T Solutions is meeting GSC's primary goals of reaching both urban and rural areas for the same cost and of addressing e-commerce needs, Parker said. Because of the scope of the project, the involved agencies are supposed to benefit from competitive pricing.

To AT&T Solutions, the TEX-AN 2000 win is significant because of its governmental tie, said Rick Roscitt, president and CEO of AT&T Solutions. The division has a hefty list of clients that includes Bank One and Allied Signal, but it lacks government contracts.

"Governments are going through a point in their evolution where they are slowly outsourcing, but they are hesitant," said David Tapper, research analyst with IDC. For example, Pennsylvania recently contracted with Unisys for data centers, he said.

But other state and local governments are considering similar networks with outsourcing being a continued trend in the future, Parker said. "We are better off not going out and buying hardware."

Other contracts regarding the network are expected to be announced throughout September.