THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, October 16, 1995 TAG: 9510140216
SECTION: BUSINESS WEEKLY PAGE: 05 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, BUSINESS WEEKLY
LENGTH: Medium: 60 lines
A week and a half ago, this newspaper ran a story about the opening up of competition for intra-region long-distance calls in Virginia: calls from Norfolk or Virginia Beach to Williamsburg, for example.
The State Corporation Commission did away with monopolies on the calls long enjoyed by carriers like Bell Atlantic Corp. and GTE Corp. In rushed the likes of AT&T Corp., MCI Communications Corp. and Sprint Corp. offering rates of 20 to 40 percent less on the local toll routes.
A Bell Atlantic-Virginia spokesman initially explained that his company would like to lower prices, but was hamstrung by the way the company is regulated by the corporation commission.
Last week, the same spokesman tried to clarify the situation. Actually, he conceded, Bell Atlantic can lower its rates. The twist is: it can't lower them the way it wants. And that's why Bell Atlantic's rates will be higher for the calls - at least until January, when the commission holds a hearing on the matter.
Right now, if Bell Atlantic lowered intra-region toll rates for one business customer, it would have to lower them by exactly the same percentage for every business customer. The same all-for-one principal applies to residential customers. That's not what the company wants.
Instead, Bell Atlantic wants to offer discounts that vary based on the number of phone calls customers make and other services they sign up for.
That's basically how long-distance carriers have operated for the past decade across the country. But until the state commission declares intra-region toll calls officially ``competitive'' from a regulatory standpoint, Bell Atlantic can't include it in a broader service package that rewards customer loyalty.
Though consumers may be offered sliding discounts if Bell Atlantic's request is approved, the phone company's main target will be big corporate customers. That's because those businesses account for a disproportionately large share of the company's intra-region toll calls.
Cox Communications Inc., already Hampton Roads' largest cable-TV provider, is in the midst of buying cable systems in Chesapeake and Newport News. Now come rumors in local TV circles that Cox is trying to swing a deal with Time Warner Inc. to take over that company's cable systems in Hampton, Williamsburg and James City County.
It makes sense. Both Cox and Time Warner have been actively involved in swapping systems with other cable operators. System swaps are widespread among cable operators right now as they try to gain as much dominance of individual markets as possible.
Example: to get Tele-Communications Inc.'s system in Chesapeake and TCI systems in Scottsdale, Ariz.; Council Bluffs, Iowa, and four other communities, Cox will give TCI systems in Pittsburgh; Spokane, Wash.; Springfield, Ill.; Cedar Rapids, Iowa; Saginaw, Mich., and a few other towns.
For the record, Franklin R. Bowers, Cox's Hampton Roads general manager, says the purported negotiations are news to him. But he confirmed Cox is interested in the Time Warner systems and every other system in Hampton Roads that it doesn't now own. by CNB