September 10, 1999

CEOs Discuss 'Digital Divide'

By THE ASSOCIATED PRESS

ASHINGTON -- Executives in the telecommunications industry, from companies both big and small, spelled out for regulators and lawmakers Thursday the obstacles they face in providing high-speed Internet services to rural communities.

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A panel convened by Senate Minority Leader Tom Daschle of South Dakota and moderated by the head of the Federal Communications Commission highlighted the so-called ``digital divide'' between those who have access to high-speed Internet services and those who live in underserved areas where such capabilities may not be readily available.

``If we don't do this right, we will have a nation of haves and have-nots,'' said Sen. Byron Dorgan, D-N.D.

Daschle echoed this, saying those without access to high-speed Internet services could also be cut off from affordable information on education and healthcare.

AT&T chief Michael Armstrong said he believes his industry does have a responsibility to prevent such a future, trumpeting AT&T's investments in high-speed Internet technology delivered over its recently acquired cable lines as a way to reach more consumers.

``We're putting our money where our mouth is,'' Armstrong said.

FCC Chairman Bill Kennard urged the chief executives assembled to ``get beyond the rhetoric of blaming the Congress, the FCC or each other'' and focus on ways to tackle the problem.

But industry heads raised both regulation and economic incentives as hurdles they sometimes face in bringing their advanced telecommunications services to areas with low volumes of customers and large distances to cross.

``Public policy does effect the level of investment that goes into developing technology,'' said Ivan Seidenberg, head of Bell Atlantic. His company and some other regional Bells like U.S. West are seeking to enter the long-distance market -- a move which they argue will enable them to make greater investments in rural areas at lower costs.

Newer telecommunications businesses say they are willing to expand their reach to underserved areas, but it cannot be cost prohibitive for them to do so.

Wireless technology may provide a way around the distance problems.

``We need a little help in making sure the cost of entry is conducive to making investments,'' said Robert Knowling of COVAD Communications. ``I'm poised to go anywhere I can if it makes sense.''

Some of the smaller companies represented at Thursday's event described how they have successfully introduced high-speed Internet services even to the sparsely populated areas they serve.

Averaging about a customer per square mile, Valley Telephone Cooperative Inc. of Texas began offering Internet access over high-speed digital phone lines several years ago to serve just a few dozen customers

``The economics are unique,'' said the company's chief, Charles Gowder.

Representatives from the wireless industry say using that technology to deliver Internet services may provide a way around the distance problems posed by offering them over traditional landlines.

``Economically, wireless is a better way of providing universal service,'' said John Stanton of Western Wireless. ``You simply out up a tower and are available to provide service.''