AT&T protests Pacific Bell's discount phone rate for schools.

SAN FRANCISCO--(BUSINESS WIRE)--March 30, 1995--A protest by AT&T may delay Pacific Bell plans to give California school kids expanded access to the information superhighway.

The long-distance company was the lone protester objecting to the Education Access rate Pacific Bell wants to offer schools and libraries to make high-speed connections to the Internet and other information sources.

The discounted rate, filed with the California Public Utilities Commission in January, would be available to any participants in Pacific Bell's Education First program.

"Even we were surprised when AT&T filed a protest to complain about the discounted rates we planned to offer," said Pacific Bell Director of Network and Exchange Services Dan Jacobsen.

"We received approval for Education First from the CPUC last year," he said. "It's the largest private-sector initiative of its kind ever undertaken with the goal to help California, and especially its young people, to become competitive in today's economy by giving them access to the tools they'll need to be successful.

"The program provides equipment for students and training for teachers, as well as the communication links to access and exchange information," Jacobsen said. "Vendors of computer and networking equipment are offering discounts to the schools to help them participate.

"But school budgets are tight, and the outlook in the years ahead is no better," he said. "There would be nothing worse than building up excitement for a program which would have to be dropped down the road because overhead costs are too high or unpredictable. It would be like providing a car without any gas to go anywhere," Jacobsen said.

"The monthly rates we propose make it easier for schools to afford and to budget for the high-speed communication links that are the lifeblood of information exchange today."

One of AT&T's complaints is that the package of services Pacific Bell is offering uses the "allure" of discounted, fixed-price monopoly service as an incentive to capture the customer's local-toll calling. Jacobsen says 85 percent of calls will be local calls to access the Internet, so local-toll calling will be minimal. In any case, anyone could offer the local-toll piece of the service.

AT&T's protest goes on to say that even if the service didn't include local-toll calling, many customers would find the inducement of predictable, easily budgeted, unlimited local and ZUM service appealing.

"Well, we hope so," Jacobsen said. "Our objective and the CPUC's is to provide the schools and libraries of California with an easy-to-set-up, economical service. Isn't that the point?

"AT&T's protest follows a pattern," he said. "They protest virtually everything we file with any regulatory body. Their apparent strategy is to delay any service we want to offer, regardless of the benefit to consumers.

"Competition should benefit customers first. If a company's strategy is to keep competitors' services out of customers' hands, and in this case out of the hands of the young people who are the future of our state, I think that's a strategy that needs some close reexamination."

Pacific Bell is a subsidiary of Pacific Telesis Group, a diversified telecommunications company based in San Francisco.

CONTACT: Pacific Bell

Jerry Kimata, 415/542-2450