The digital connection.

The gain and pain of adding an ISDN digital phone system.

Scenario 1: You click on your Internet icon. Your computer dials the phone number and after a few rings that telltale hiss indicates your computer is attempting to handshake (connect) with the Internet provider's computer. If all goes well, your password will be accepted and the connection will be completed in about a minute. Then you click on your favorite Web page, initiate a search or seek to download your waiting e-mail. The minutes drag on as your commands pass onto the Internet and you wait until the requested data dribble through the phone lines, get converted by your modem and then, finally, your screen fills with the information you want.

Scenario 2: You click on your Internet icon. Instant dialing. No hiss. Within five seconds your password is approved and you're connected. Call up the Web page of your choice or click to retrieve your e-mail and your data flash on the screen swiftly.

What's the difference between scenarios 1 and 2?

Four little letters: ISDN, which stand for integrated services digital network. The key word is digital. Your regular phone is an analog instrument, which is slower (even when you use the fastest commercial modem) and more susceptible to electronic noise and transmission errors than a digital instrument. Further, analog phones and digital computers are inherently incompatible, which is why a modem is needed to convert the computer's digital signals into analog code so information can be transmitted over the phone lines. When the message gets to the computer at the other end, it must be converted back to be understood by the computer. With ISDN, your messages remain digital during the entire circuit.

The fastest analog modems work at 28.8 kilobits per second (kbps), or about a page of text every second. With ISDN, data move an order of magnitude faster--128 kbps.

Clearly, then, it makes sense for accountants who do much data transmission--either via the Internet or between satellite offices and clients' remote locations--to consider adding an ISDN phone line to their communications systems.

* What will you gain with ISDN?

* A single ISDN line typically can simultaneously handle two data channels and one voice channel. So, not only can you send and receive data at the same time, you also can use the same line for voice communications during those transmissions.

* Because the data remain in digital mode, there are virtually no errors caused either by noise on the line or by the conversion from digital to analog and back again. That saves the extra step of checking data integrity, which is necessary when using regular analog lines.

A BUSY SIGNAL

Although ISDN has been around for about a decade, until recently only the communications cognoscenti knew about it because, for reasons best known by the phone companies, ISDN was never actively promoted. Thus, only a handful of big businesses with communications experts on their staffs knew enough to install it. But in the last few months, the ISDN picture has changed. In part because of the long, frustrating delays when using the Internet and a growing interest in cyberspace commerce, more phone customers are seeking the digital connection. While some telephone utilities have responded by beefing up their efforts to promote ISDN, little comparable effort has been made to prepare their technical staffs. As a result, the wait for an ISDN line can range from weeks to months--and in some locations the service is still not available.

Worse, often the phone company installers concede they know little about the new technology, and the horror stories told by many customers provide ample evidence of that problem. To be sure, some phone companies are stepping up training for the special installations, but their efforts have yet to match customer demands.

Considering the obstacles, why should accountants consider installing a digital line--especially if cyberspace commerce and the Internet are not high on their business priorities?

According to a 1995 Olsten Forum for Information Management, 33% of U.S. companies now allow employees to operate a remote office from their homes. Another 16% are considering it. IBM, for example, recently set up such a system for 95% of its U.S. marketing and services personnel and reported a 15% gain in productivity and as much as a 60% decline in real estate costs per location.

But to make remote workers productive, they need a communications system that can handle large bandwidth (the higher the bandwidth, the more data can be transferred in a time period) to connect with the main office or other remote personnel.

THE BOTTOM LINE

Digital lines are convenient and very fast, but are they cost-effective?

Hardware for a typical installation costs between $100 and $300, with a typical monthly fee of $40 to $80 a month (some ISDN providers charge far more). Generally, breakeven on the investment is reached if you're online five hours or more a month. However, be prepared to pay extra to access the Internet via ISDN. Not all Internet providers can service ISDN lines, and a few can service customers only in some locations. But as digital connections get more popular, such services surely will expand.

It's important to know, however, that rates and services are changing quickly because of the rapid advances in technology and the increasing competition in this field. Be aware, too, that an ISDN phone can talk only to another ISDN phone, which means you'll need to maintain your conventional analog phone if you want to continue to communicate with the nondigital world.

To be sure, while it's a bit of a challenge to get connected, in the long run it will pay off in better Internet service, remote server productivity and electronic commerce.

EXECUTIVE SUMMARY

* ISDN--INTEGRATED SERVICES DIGITAL Network--allows you to convert your slow analog phone system into a fast digital system. And that, in turn, lets you transmit computer data and Internet information both faster and with less likelihood of data corruption.

* DIGITAL PHONE SERVICE makes sense for accountants who do a lot of data transmission--either via the Internet or between satellite offices and clients' remote locations.

* A SINGLE ISDN line typically can simultaneously handle two data channels and one voice channel.

* ALTHOUGH ISDN HAS BEEN around for about a decade, until recently only experts knew about it because ISDN was never actively promoted. But in the last few months, the ISDN picture has changed and demand has risen.

* WHILE SOME TELEPHONE UTILITIES have responded by beefing up efforts to promote ISDN, less effort has been made to prepare their technical staffs. As a result, the wait for an ISDN line can be from weeks to months--and in some locations it's still not available.

* MEANWHILE, ON THE horizon is a technology that may make ISDN an expensive slowpoke by comparison. Cable television companies plan to add voice and phone to their existing CATV service.

Life after ISDN?

Another digital communications technology is on the horizon, and if the promoters' promises stand up, ISDN will be an expensive slowpoke by comparison.

The cable television companies want to use their existing CATV cables to also carry voice and computer data. Cable offers numerous advantages. In many cases, the lines already are installed in homes and offices. But more important, cable provides a bandwidth in excess of 1 million bits per second, compared with ISDN's 128,000 bps, which translates into lightning-fast transmission. In addition, a cable installation promises to be relatively simple.

When will cable service be available?

The major cable operators--Tele-Communications, Time Warner and Comcast--claim they will start adding computer and phone communications to their menu of services by yearend. And they say their rates are likely to be far cheaper than ISDN. But timing and pricing are still not official. So for those who need fast communications now, ISDN--despite its headaches--is the best answer.

How to Get Connected

Begin by asking your regional telephone operating company for rates, including installation costs. If the line is for a small office or your home, the company may assign you to a small business consultant, who can be helpful.

The phone company will then determine whether service is available in your area. This will take a few days. If it is, you will get an estimate of when the line will be installed--probably within four to six weeks.

Ask the utility to recommend which ISDN modem you should acquire; the utility likely will suggest several vendors. Ask the installer for a SPID (service profile identifier), which tells the modem how to communicate with your ISDN line. Be sure to have the modem available during installation so the installer can test the line with it.

WAYNE HARDING, CPA, a vice-president of Great Plains Software, Fargo, North Dakota, is a member of the American Institute of CPAs and its information technology research subcommittee. He also is a vice-president of the Colorado Society of CPAs.