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High prices may cancel ISDN's flight.


SDN won't go far if the price isn't right.

These are the ground rules:

* ISDN rates must be based on the carrier's cost.

* It must not be priced as a premium service.

* Features shouldn't be bundled or packaged.

"Pricing ISDN as a premium service, well above cost, will limit deployment," insists Susan Gately, senior consultant and tariff expert with Economics and Technology in Boston.

What happens with new services, says Gately, is that carriers often pull rates out of a hat rather than base them on cost. Pricing basis is what's good for the telco, rather than what the user wants.

"That's not the way to introduce a new technology that you want widely deployed. That will limit applications. They need to price the services so customers can develop their own applications."

Tale Of Two Tariffs

Gately compared California and Illinois, two of the few states with general ISDN tariffs on the books, since most applications are in the pilot stage.

"Pacific Bell filed a tariff which assumes that the user is not able to determine what the user wants," says Gately. "Pacific Bell feels it knows much better what features and functions a user would want."

In Pac Bell's plan, she notes, "You can only buy ISDN lines as an add-on to centrex. There are not general ISDN lines you can buy if you are not a centrex user."

Pac Bell also requires purchase of feature packages that increase in sophistication.

"You can't mix and match to get what you want," says Gately. "The ISDN line itself should be priced first and the features second. ISDN is just an overlay to the regular network. There shouldn't be an assumption that there is a separate cost element associated with each of the B and the D channels. They're all one line going to the customer."

Wayne Purves, Pac Bell project manager, says the telco's philosophy is to use ISDN, which is expensive to put into the network, to enhance other offerings, in this case centrex. He adds that after Pac Bell introduced feature packages, it was praised for its pricing by consultants.

Gately has differences with the Illinois Bell tariff, but says it's a better approach.

"What Illinois Bell does is offer you a standardized capability. You don't have to get centrex service. You can have ISDN on a regular business line and buy optional features.

"There is a $3 a month charge to have your line set with ISDN capabilities. After that you buy individual features and functions. It is a more user-friendly approach and will allow development of different applications.

"What I don't like is that it distinguishes what you do with the circuit. If you buy two B channels and a D channel it is more expensive than if you buy one B and one D. But at least they let you determine the makeup of that circuit and what you put over it."

What can users do to influence a tariff? Though carriers don't particularly welcome input on the subject, talk first with your service rep.

Also, let state regulators know ISDN is important to you--if priced right. They don't want to see carriers investing in a service without a payback.
COPYRIGHT 1990 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:ISDN Forum
Author:Tanzillo, Kevin
Publication:Communications News
Article Type:column
Date:May 1, 1990
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