AT&T looks to shake up local phone industry

Kevin Ferguson

Thursday, June 14, 2001 | 11:05 a.m.

AT&T Wireless has entered the Las Vegas local phone industry, offering what the company calls "fixed-wireless" technology in a bundled package that includes long-distance phone service and high-speed Internet access.

This service, which caters strictly to residential customers in the initial rollout, is different from AT&T Wireless' mobile phone service.

The reason: its intended for fixed uses, like a typical home phone with a slight alteration. The outside phone wires aren't used, and the service is transmitted to an antenna installed on a customers home.

Customers are able to retain their original phone numbers.

The services in the bundled package come with certain stipulations. In order to sign up for the local phone service, customers must join AT&T's long-distance plan, said Ed Hertz, president of AT&T Fixed Wireless' western region.

Customers that want the local and long-distance service, however, are not required to sign up for the high-speed Internet access. But those who want the broadband Internet access must sign up for the bundled package, Hertz said.

Tom Baker, general manager of the Las Vegas division of AT&T Fixed Wireless, said this is not a move to merge fixed and mobile phone services.

"Mobile wireless and fixed wireless are two different things," he said. "(Fixed wireless) is really just another option for the local link."

Hertz said the company is using the bundled package to tout the company's entrance into the local phone service in new markets.

"We feel (local phone service) is an under-served need," Hertz said. "The residential customer doesn't have that many choices."

Hertz said the benefit of AT&T Digital Broadband is the low cost of long-distance service -- 7 cents per minute. Also, the installation of service is guaranteed to be done within three days of requesting service.

However, for customers who want to retain their current phone number, installation may take as much as two weeks because AT&T has to coordinate that with the customer's current phone company, Hertz said.

Companies offering local phone service -- excluding wireless carriers -- in the Las Vegas residential and business markets include Sprint, Mpower Communications, XO Communications, and Pac-West, said Cynthia Messina, spokeswoman for the Nevada Public Utilities Commission.

Nevada Bell owner and Cingular Wireless operator SBC Communications plans to offer local and long- distance phone service to Las Vegas residents by April 2002.

Cox Communications, Las Vegas' cable television provider, is laying an underground ring of fiber optics around the valley to improve its cable television service and possibly use that network to establish its own phone service infrastructure, said Steve Schorr, Cox's vice president of public and governmental affairs.

Cox also has a license from the PUC to tie into Sprint's network and resell phone service. But Schorr said the company has not acted on it because Cox believes the profit margins would be too thin if it were to resell the service at the rates Cox would have to pay for it.

"We are constantly evaluating our position by watching the rate's established by the ILEC (incumbent local exchange carrier), or if it's more cost-efficient to develop our own facility-based network," Schorr said.

He said to establish Cox's own network in Las Vegas would involve an investment of more than $100 million.

AT&T Wireless, which already has its own tracking stock separate from AT&T Corp., is set to spin off from AT&T Corp. July 9. At that time, AT&T Wireless will be run by its own board of directors and executive staff.

Las Vegas is the 11th U.S. market in which AT&T Wireless has introduced AT&T Digital Broadband since launching the service in March 2000. The company has 30,000 customers using the service in the combined markets.

Hertz said the company had invested $2 billion to develop the technology and roll the service out into the 11 markets. Some of them include: Dallas/Fort Worth, Texas, San Diego, Houston and Los Angeles.

Las Vegas customers of AT&T Digital Broadband would receive a single monthly bill that would include the charges of local, long-distance and high-speed Internet access.

Monthly local service starts at $12.95, while in-state and out-of-state long-distance service is metered on a 7 cents per minute rate. Calls to Laughlin and Pahrump are considered long-distance.

High-speed Internet service is priced at $34.95 per month.

Sprint's speedy Internet access (digital subscriber line) starts at $44.99. But customers of Sprint's many different bundled packages of calling features can get DSL service at $39.99, said Sprint spokeswoman Detra Page.

The Greenspun family, owner of the Las Vegas Sun, is a minority investor in the XO and Cox systems in Las Vegas.