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Say Goodbye To The Bare Bones Phone


SPECIAL REPORT ENTERPRISE: Technology: Telecommunications

SAY GOODBYE TO THE BARE-BONES PHONE

Tired of hearing about the wonders that the Information Superhighway will bring? You know: instant access to huge databases, videoconferences with customers, interactive telemarketing done from home as easily as the office. Well, scoff no more. These features--and more--are already widely available to individuals from their local phone company. All you have to do is ask for the service by name: ISDN.

If you really want to know, the acronym stands for integrated services digital network. The only thing subscribers really need to know, however, is that this technology transmits voice and data up to 27 times faster than a standard phone line and costs only about twice as much.

Paying twice as much for a phone line may not sound appealing--until you realize that one ISDN line has the same capacity as three phone lines. With the right equipment, it's possible--though not easy--to take a phone call, send a fax, and download an E-mail message at the same time. The fast transmission rate for ISDN means businesses can authorize a credit-card transaction in five seconds instead of 45 seconds, download huge files from the Internet in minutes rather than an hour, or allow employees at two different locations to work on the same computer file simultaneously. Even the sound quality is a quantum leap beyond regular phone lines: On Frank Sinatra's hit album Duets, the crooner and collaborators such as Irish rock star Bono phoned in their halves of the duets over ISDN lines.

EXPLOSIVE GROWTH. The secret of ISDN is digital transmission of signals from one end to the other. There is no need to go through the time-consuming conversion of digital data and video bits of today's commerce into analog signals. That's why phone companies eagerly embraced the technology in the early 1980s and developed international standards for the service. But for years, ISDN was more promise than reality. It was too expensive for the average customer, and the hardware needed to make it work was rare and difficult to manage. Most of all, no one really had much use for it. The acronym came to stand for "I Still Don't Need."

Then along came the explosive growth of home personal computers, telecommuters, and the Internet. Suddenly, there was a real need for high-capacity digital lines. In just the past year or so, every major phone company has made more lines available and lowered prices significantly, thanks to heavier usage. Although tariffs and installation charges can vary widely according to the regulatory requirements of each state (table), on average an ISDN line becomes cost effective at about the point when a subscriber is considering a third regular phone line.

Or less. In California, Pacific Telesis Group, the most aggressive of any of the regional phone companies in marketing ISDN, announced in April that it will charge just $24.50 a month for an ISDN line, and wants to bring the price down to less than $20. "We're trying to shift to the mass market from early adopters," says M.T. (Mike) Sapien, data-products marketing director for Pacific Bell, PacTel's California phone company. Its goal is to install a million ISDN lines by 1998; PacBell was at 30,000 in March.

NEW CAPABILITIES. But strict comparisons between ISDN and standard phone lines are difficult. "An ISDN line offers new capabilities that just aren't there with analog," says Patrick J.D'Innocenzo, product line manager for Bell Atlantic Corp. And the new technology is sold differently, too. Ameritech Corp. and Motorola Inc., for example, are test-marketing a package in Illinois that allows a subscriber to hook together a computer, phone, and modems to implement such fancy call-management features as onscreen voice mail and an automatic log of all calls. Prodigy Services has arrangements with BellSouth, Nynex, and PacBell to offer ISDN service to its online subscribers.

The ISDN rollout still has some glitches. Phone company marketing executives, for example, acknowledge that in many cases it's still not that easy to order an ISDN line. Customer reps are often not educated about the service, and it's not yet available in all regions. But by the end of next year, ISDN service should be ubiquitous, and prices dramatically lower. Now, if they would just come up with a better name.By Catherine Arnst in New York, with Stephen H. Wildstrom in Washington


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