1 PUBLIC SERVICE COMMISSION
2 STATE OF DELAWARE
3 In the matter of the tariff :
filing of Bell Atlantic - : P.S.C. Docket
4 Delaware, Inc. for the : No. 95-014T
implementation of residence :
5 ISDN service :
The above matter came on for public hearing
7 on Tuesday, January 16, 1996, at 7:00 p.m. in the
Public Service Commission Hearing Room, 1560 South
8 Du Pont Highway, Dover, Delaware.
G. ARTHUR PADMORE, The Hearing Examiner
13 On behalf of Public Service Commission
14 BRUCE BURCAT, Executive Director
JOHN CITROLO, Public Utilities Analyst
16 On behalf of Bell Atlantic - Delaware:
17 LINDA GAGHAN
19 On behalf of Office of the Public Advocate:
20 PATRICIA STOWELL
23 WILCOX & FETZER
1330 King Street - Wilmington, Delaware 19801
24 (302) 655-0477
1 THE HEARING EXAMINER: For the
2 we'll open the hearing at 7:00 as advertised. Let the
3 record reflect that Bell Atlantic is represented by
4 Linda Gaghan, product manager, Ginny Leonetti, an
5 official of the Company, the Public Advocate and
6 John Citrolo of the Public Service Commission Staff.
7 We will recess a few minutes. We understand that
8 customers are on their way.
9 (A brief recess was taken.)
10 THE HEARING EXAMINER: Good
11 ladies and gentlemen. This is a public comment
12 in Docket No. 95-014T. I've been appointed the
13 Examiner in these proceedings and a part of my
14 responsibility is to summarize the remarks made
15 tonight by members of the public who have
16 include in my official report to the Commission.
17 Neither I nor anyone from the Commission will be
18 any decisions tonight. We're here just to hear what
19 the members of the public have to say about the
20 that Bell Atlantic - Delaware has made for the
21 provision of residential IntelliLinQ BRI Service. This
22 is the service that's come known to be residence
24 The Commission has determined to
1 public evidentiary hearings to investigate the justness
2 and reasonableness of the proposed residence ISDN
3 rates. And as I said earlier, we're conducting this
4 public comment session to take public input about
5 service so that the Commission may consider these
6 comments when it makes a final decision about
7 or not the rates are appropriate.
8 Representatives from the Commission
9 the executive director, Bruce Burcat and John Citrolo,
10 a utilities analyst. The Public Advocate is here,
11 Patricia Stowell. And also the representatives from
12 Bell Atlantic - Delaware, Linda Gaghan and
13 Ginny Leonetti.
14 Notice has been published of this
15 proceeding and we have a speaker's list which
16 of two names: Paul Gumerman. Am I pronouncing
18 MR. GUMERMAN: Yes.
19 THE HEARING EXAMINER: And
20 Michael Lecuyer.
21 MR. GUMERMAN: I didn't realize we
22 on the speaker's list already.
23 THE HEARING EXAMINER: Well, I
24 have some comment you'd like to make.
1 MR. GUMERMAN: I'd like to get some
2 information from the Bell Atlantic representatives and
3 see what the filing was about. This was something
4 we found out about just earlier this afternoon.
5 THE HEARING EXAMINER: Okay.
6 before we begin getting to the comment session, I
7 wanted to lay down some ground rules by which
8 going to operate. And since we have only two
9 two potential speakers, I'm going to recognize them
10 the order that their names appear on the list. That
11 shouldn't be too difficult to do.
12 When you come forward, state your
13 and address for the court reporter. And as you see,
14 do have a court reporter, so I'm only going to let
15 person speak at a time. Since the comments will
16 a part of the case record for the Commission, it's
17 essential that your comments remain relevant to the
18 subject matter that we're here to discuss, which is
19 residence ISDN service.
20 So before we begin, I'll let the
21 representative from Bell Atlantic give a brief
22 of the proposed service; after which we'll start with
23 Mr. Gumerman for his comments or questions.
24 MS. GAGHAN: Thank you. Good
1 ladies and gentlemen. As was mentioned, my name
2 Linda Gaghan. I'm the product and marketing
3 for residential ISDN for Bell Atlantic across the whole
4 region as well as in Delaware. I'm here this evening
5 to answer questions about the service and, for those
6 you who are interested in knowing more about it, to
7 provide an overview of what the service is and how
8 might be used.
9 To start, ISDN service is basically like
10 getting two phone lines over a single pair of wires
11 into your home, the same kind of wires that are
12 into your home today. It can be used to make
13 voice or fax calls, but more importantly, it can be
14 used to send and receive information much faster
15 your computer. I assume many of you probably are
16 on-line services today. Then you probably are using
17 modem to access those services. But with ISDN,
18 would be able to send and receive information to
19 services up to eight times faster if you were using a
20 14.4 modem or four times faster if you were using a
21 28.8 modem.
22 I brought some handouts with me that
23 provide information about residential ISDN as well
24 few real life case examples of when we've done
1 comparisons of using ISDN versus a 28.8 modem,
2 the fastest analogue modem today. And as you'll see,
3 the more graphical or video intensive the
4 the more dramatic the benefit of residential ISDN.
5 One example that's in the handouts is
6 that we access the Cable News Network InterNet site,
7 the CNN InterNet site, to retrieve a story, an audio
8 clip and a news clip. I mean a video clip. And with
9 ISDN, it took less than three minutes to download
10 information. But with the 28.8 modem, the fastest
11 analogue modem, it took almost 11-and-a-half
12 So the speed and performance benefit of ISDN is
13 considerable. And the differences would even be
14 greater if you were using a slower speed modem
15 14.4 which many common on-line service users do
17 We believe this particular benefit, the
18 speed benefit of ISDN, will be particularly appealing
19 to the growing base of home InterNet and on-line
20 services users which are already in the tens of
21 millions across the country and to the 64 million
22 individuals who do some sort of work from home.
23 In the State of Delaware for residential
24 ISDN, we currently have 13 confirmed orders for
1 service and are following up on 28 phone inquiries
2 over 30 InterNet inquiries we've gotten since
3 13th. So already the service is taking off in the
5 As our initial entry into the market
6 residential ISDN, we have positioned the service so
7 that the costs are charged back to only those people
8 who use the service and that individuals who use the
9 service pay only for what they use, no more and no
10 less. And as we gather information on customer
11 patterns and their overall requirements for different
12 applications, we do plan on introducing other
13 options that will meet those different customer
14 This is something we are working on today and
15 do by no later than the end of this year and
16 much sooner. But to let you know, the pricing
17 proposal, which I'll quickly go over, is our initial
18 entry into the market based on the market
19 we have.
20 For an individual to subscribe to
21 residential ISDN, it will cost $28.90 in the State of
22 Delaware plus usage, and that includes both the
23 service components plus the dial tone line. The
24 elements apply for a data usage which are two cents
1 minute per B channel during peak hours, which are
2 Monday through Friday, 7 a.m. to 7 p.m., and it's one
3 cent per minute per B channel for nonpeak hours
4 applies to all other times which is evenings and
5 weekends all day long. What that equates to is
6 approximately 60 cents an hour if you have one B
7 in off-peak hours up to a maximum of $2.40 full two
8 128-kilobit-per-second data in peak times. And that is
9 the service in a nutshell.
10 So I'd be happy to entertain questions
11 answer any other questions about the service.
12 THE HEARING EXAMINER: State
13 MR. GUMERMAN: Paul Gumerman.
14 address? 519 Marshy Hope Road, Felton, Delaware.
15 What additional equipment is required
16 Bell's end to offer the ISDN service?
17 MS. GAGHAN: Okay. In our central
18 which is -- there is a separate module, a part of the
19 physical switch which is a digital switch. That is
20 aside for ISDN. It's configured to support ISDN
21 service. There are separate physical line cards in
22 which an ISDN will terminate in that switch
23 There is software that is associated with the switch
24 module in operating the ISDN service in handling
1 traffic management in our service.
2 Also, if the office that we use to serve
3 a given residential customer is not a digital switch,
4 we will extend the service from a digital switch in
5 another location so there is, we call it foreign
6 exchanging, so we have the cost associated with
7 bringing that service to the individual's home site.
8 So it's a piece of equipment that basically lets you
9 extend ISDN from one switch to another and then to
10 residential customer, even if their home central
11 does not support it.
12 Also, if a customer is located farther
13 from our network than 18,000 feet, which is a
14 for sending a digital signal, that there is additional
15 equipment that must be put on the customer's lines
16 that the quality of the signal doesn't degrade, and
17 that equipment is also included in the cost.
18 MR. GUMERMAN: Is the cost the
19 subscription cost of 28.90 a month and then you
20 plus the dial tone?
21 MS. GAGHAN: That includes the dial
23 MR. GUMERMAN: That includes the
1 MS. GAGHAN: That's correct. The
2 feature element of that is $19.50. And the dial tone
3 line rate in Delaware is $9.40 a month. So if you
4 the two, that's how you get ISDN.
5 MR. GUMERMAN: And are there any
6 that Bell realizes from taking two pairs and
7 getting -- from taking one pair and getting two lines
8 to offset the increased cost of the -- and removal of
9 the analogue line cards and --
10 MS. GAGHAN: Well, actually, that's an
11 interesting question. But what we're finding is that
12 because the primary driver for use of ISDN in the
13 is data, on-line services, work at home, whatever,
14 customers that have been signing up for the service
15 have all been additional line customers. So they are,
16 in essence, just converting an existing line or even
17 adding an additional line into their home. So we're
18 actually adding facilities to our network rather than
19 decreasing the numbers.
20 Also, in the switch itself, you're
21 basically taking up two slots through the switch
22 because each B channel is considered as a separate
23 pathway through the switch. So you're not
24 saving anything with an ISDN line, per se, because
1 you're still terminating two lines or channels in our
2 switch. So we haven't seen that to be the case so
4 MR. GUMERMAN: So that's pretty
5 wash as far as --
6 MS. GAGHAN: Yes, pretty much.
7 MR. GUMERMAN: And one question
8 really concerns me the most is why are you making
9 distinction cost-wise between data and voice usage?
10 MS. GAGHAN: Well, with ISDN, when
11 line terminates in the switch and if it is set up as a
12 data call through the switch, the trunking facilities
13 out the back that connect you to another location
14 guaranteed 64 kilobit clear trunks which are separate
15 from the 56 kilobit trunks that we have to support
16 voice service. We have guaranteed the 64 clear with
17 ISDN because one of the key reasons you purchase
18 service is to get the full band of the data service.
19 So there is that additional cost of guaranteed 64
20 trunks and there's a very small number of them
21 And that's also connecting to the interexchange
22 services if you're going long distance or just to
23 connect to the other office. So there is additional
24 cost from that perspective.
1 Also, with data service, the holding
2 times for data service tend to be much longer than
3 voice traffic. So that ties up facilities so you have
4 to engineer much more robustly to support data
5 than you do for voice. So there is a distinction in
6 usage and in facilities.
7 Also, since ISDN is primarily
8 data-oriented, the equipment associated with ISDN,
9 per se, is more expensive than if you're looking at
10 just normal, POTS, plain old telephone service.
11 MR. GUMERMAN: Does Bell have a
12 on the use of ISDN, for want of a better word,
13 that do data-over-voice channels?
14 MS. GAGHAN: I don't understand.
15 you mean?
16 MR. GUMERMAN: Is there any
17 the part of Bell to the use of the voice 56K service?
18 MS. GAGHAN: Okay.
19 MR. GUMERMAN: With data?
20 MS. GAGHAN: Oh. Well, I guess the
21 reaction would be that because of the different
22 engineering parameters associated with data, you
23 you have to engineer to cover the capacity
24 for data service. If that call is being connected
1 through our analogue network piece, per se, what
2 doing is basically taking some facilities out of
3 service for longer periods of time, thus not making
4 them available for the traditional voice users, which
5 could, over time, if you get enough people doing
6 would cause us to have to build extra capacity in the
7 switch and there would essentially be more cost that
8 would have to be covered through some service.
9 MR. GUMERMAN: But there's no
10 in someone doing that than simply having an
12 MS. GAGHAN: Correct. And actually
13 enough people did that through our voice network
14 with an analogue modem, which we are starting to
15 more and more of these days because of on-line and
16 InterNet access services, what we're starting to see is
17 that the engineering that we have for those
18 which is based on certain assumptions about usage.
19 being, for lack of a better phrase, blown out of the
20 water. And so we're finding that a lot of those
21 switches are being tied up and people that are
22 to pick up their phone to make a voice call are
23 busies. And so we're going to have to expand the
24 capacity of those switches for the analogue side, not
1 just the ISDN.
2 So it's not so much an issue of analogue
3 versus digital. It's more what you're using the
4 service for and what the assumptions are on usage
5 how we engineer accordingly. And so if you have a
6 certain infrastructure, you cost that out and try, as
7 in any switch service, to spread those costs over a
8 broad base of users. Once those parameters get
9 exceeded, you're sort of having a bigger cost base
10 has to be spread over the customers. So we're
11 that that's a problem in the analogue network
12 of all this data traffic which the analogue network
13 not originally engineered to support. So it's a
14 challenge on both sides.
15 So the distinction primarily has been
16 that with ISDN, because it's data oriented, that we
17 have it as a measured service so that you are
18 for the facilities you are using and we can gather
19 information about usage patterns. And as we go
20 forward, we can offer packages that can meet
21 needs based on that information and we can
22 switches accordingly and make sure that it's as
23 affordable as we can. So it's a starting point. We
24 know it'll cover costs and drive costs back to the
1 people who are actually using the service and not
2 having any other user base pick up those costs.
3 MR. GUMERMAN: Okay.
4 MS. GAGHAN: It's kind of a long
5 MR. GUMERMAN: My one comment
6 have, and it was my initial reaction on seeing the
7 measured usage rates for the data only for ISDN,
8 that it looked to me at first blush to be a really
9 blatant attempt to protect leased lines business
10 because the pricing was such that it looked like it
11 would be just marginally more expensive to go with
12 than a leased line if you were up for 24 hours a
13 And my impression was that it was -- the pricing
14 driven not so much by marketing and cost of ISDN
15 much as trying to protect an older technology.
16 MS. GAGHAN: Oh. Actually, not
17 The whole concept behind ISDN and other public
18 network services is to provide broad conductivity to
19 the broadest base of users. So you're typically
20 designing an infrastructure that can be cost-effective
21 for, say, the low-to-moderate-level user. And we
22 engineer the network based on assumptions about
23 those average user patterns are going to be. For
24 example, we have about eight analogue users per
1 analogue facility. It's sort of like an eight-to-one
2 concentration ratio. Whereas with ISDN where the
3 service is much more, has much longer hold times,
4 engineered the network for like four-to-one
5 concentration ratios. So that whenever you hit a
6 certain usage threshold, it really is more
7 cost-effective to go to a private line alternative
8 because essentially what you're doing is you're using
9 an inordinate share of those shared facilities for your
10 particular use. So essentially you're getting greater
11 benefit than, say, the average user, but paying a
12 reduced rate because those customers are sharing the
13 cost over the whole base.
14 But if you're nailed up 24 hours a day,
15 you basically have a private line for the benefit of a
16 shared network service price. And so you're taking
17 those facilities out of the public network domain
18 forcing those other remaining customers to vie for a
19 smaller number of facilities.
20 So it's basically that constant tradeoff
21 of when a public switch or usage-based service is
22 cost-effective and when it's really in the best, in the
23 best response to your application to go to a
24 private line facility where it is available to you only
1 for 24 hours a day and that there are costs associated
2 with having a personal facility, basically, through the
4 So I did a little calculation of a
5 crossover point with our T1 rates which is, I'm not --
6 I apologize, I'm not sure if that's the rate in
7 Delaware, but it's around $700 a month in some of
8 jurisdictions. And you have to be on 270 hours a
9 or about nine hours a day to cross over. So that's a
10 very heavy user of service.
11 MR. GUMERMAN: You should
12 not to a basic rate but primary rate.
13 MS. GAGHAN: Well, actually, our
14 service, I think it's very close to that.
15 MS. LEONETTI: The primary rate uses
16 T1 rate, so that would be accurate.
17 MS. GAGHAN: So it's sort of like if
18 really have a need to have a facility on line 24
19 a day, that really shouldn't be going over a public
20 switch network service. I mean, that's not what
21 services are designed for. It's sort of like a public
22 switch service is designed to provide the greatest
23 for the greatest number of people. And you get the
24 benefit because you're sharing the costs of the whole
1 solution over a broad number of people. So it's
2 affordable and gives everybody a chance to get
3 functionality. Whereas if you really are that intense
4 a user, you really aren't geared more to a private or
5 dedicated-type facility.
6 So I guess we priced it thinking of how
7 we could make it as affordable for as many people
8 still cover costs until we could get more usage data
9 and market intelligence on customer needs. And
10 we're trying to do in the analysis we're working on
11 right now with pricing is to try to develop usage
12 packages that will track with what we think some
13 driving applications will be. Much like you have
14 an InterNet provider where you have 30 hours for
15 month and then you pay $10.50 above that for
16 you use or trying to match -- like if I were a
17 full-time telecommuter, I would need maybe 160
18 month, which would be eight hours a day, five days
19 week, four weeks a month. So that if I'm literally
20 there and working, I would be able to have this
21 that I know would cover my requirements. So
22 trying -- and to give discounts on that usage or that
23 package because we have predictability, the
24 has predictability and we can engineer our network
2 But when we went to our initial launch,
3 as I say, that 19.50 plus usage was as low a rate as
4 felt we could charge to cover costs and to meet its
5 broadest base customer requirements. As I say, we're
6 trying to make other things more attractive to meet
7 different needs, but we had to start somewhere and
8 wanted to get the service out to the market as
9 as possible. And that was a good model to start
10 since it seemed attractive to some of the other
12 MR. GUMERMAN: I think I'm finished.
14 THE HEARING EXAMINER: Will you
15 your name and address.
16 MR. LECUYER: Yes. Michael Lecuyer,
17 South Temple Avenue, Viola, Delaware. The
18 data-over-voice question, everybody is using it. And
19 one of the aspects of the InterNet is continuous
20 conductivity of the nature of the InterNet. In other
21 words, I may get mail any time of the day into my
22 system which can be a private system. People want
23 conductivity. Doesn't the phone company have --
24 doesn't it see it changing? People will get around
1 by using the data-over-voice channels. Every ISDN
2 is aware ISP is doing this. They're saying get these
3 modems. These do it. These do voice over data,
4 over voice. Everybody's going around what you're
5 in your ISDN data right now. It's not going to get
6 better. You're either going to have to slap it on the
7 voice thing with some tariff or throw it all away
8 the pricing.
9 Right now I avoid long-distance calls by
10 having call forwarding at your special points where
11 people can do two-county calling and stuff like that.
12 People do this all the time.
13 THE HEARING EXAMINER: Say that
14 MR. CITROLO: That came up before.
15 MS. GAGHAN: Well, I guess part of --
16 well, I guess people can use the analogue network to
17 have that kind of constant accessibility to InterNet
18 and on line. And as I mentioned earlier, if more
19 more people start to do that, that will have adverse
20 effects on the rest of our network so that we'll have
21 to engineer it more robustly. And I guess your
22 structure was an attempt to make sure that people
23 have a need for certain capabilities pay for the
24 benefit of those capabilities and not have other
1 in the general population foot the bill, which is
2 essentially what is happening by folks -- I'm trying
3 to think of the right word -- overutilizing the
4 analogue facilities from the way they were rated and
5 provisioned because the price you pay for an
6 circuit today is based on primarily voice traffic
7 assumptions which have very short connect times and
8 costs are far in excess of what you're actually paying
9 for when you use that.
10 So I guess the issue is we're trying to
11 price new services and hopefully in looking at our
12 existing services so that they do reflect the actual
13 cost of the facilities. And we have in deploying
14 on a major basis attempted to cover those costs and
15 only have those people who use the service pay for
16 People will always try to get around the rules and
17 the most for the least they can pay. I can't really
18 much about that. We're just trying to offer services
19 at affordable rates that also cover our costs of doing
21 MR. LECUYER: Well, the InterNet isn't
22 going to go away tomorrow. That is what people
23 conductivity all the time. People will want 24-hour
24 conductivity all the time. Many systems, many
1 private people will want it. Many people will
2 to call out. But many other people will be providing
3 these InterNet services and they'll be sitting there on
4 the POTS lines with their analogue setups 24 hours a
5 day. I do it already. And eventually either you're
6 going to have to decide that maybe we want to
7 ISDN lines work for an intrastate rate or not.
8 you say people are bending the rules. They're not.
9 They're using the same rules. They're not bending
10 rules. They're using what's there, what's available
11 them. You're creating a problem for yourself
12 people will not pay for that if they can avoid it.
13 MS. GAGHAN: I would tend to agree
14 people will do whatever they can to avoid paying
15 charges. The only thing I can say is that some of
16 companies that provide InterNet services and
17 access services like ISDN support do not offer those
18 intrastate rates. They do charge usage above a
19 level because they also have cost issues and concerns
20 about things being nailed up, taking up those
22 I understand with the analogue there
23 some network companies that, or InterNet
24 do offer an intrastate rate unlimited and you can
1 it all the time. They also have the ability, from
2 having talked to one of them, to monitor customers'
3 lines. And if they detect an idle facility and they
4 need that facility for peak traffic requirements, they
5 have told us that they disconnect those customers
6 force you to log back in if you're not using the
7 service. So they have ways that they can work
8 some of the traffic problems that we encounter,
9 you know, we can't do the same thing that they do.
10 And I guess all I can tell you is the
11 services that you're using today to have that very
12 affordable unlimited access to the InterNet is priced
13 and engineered for uses that are very different from
14 what you're using them for today. And you're
15 real bargain.
16 MR. GUMERMAN: May I ask a
17 THE HEARING EXAMINER: Certainly.
18 MR. GUMERMAN: What would it cost
19 out over the universe of ISDN users to simply have
20 intrastate rate pricing, given that some will use it as
21 a maintained connection? Others, if the setup and
22 teardown times are short, there's no point in doing
23 that and people won't do it. So that, you know,
24 technology will help you, obviously. But what
1 cost compared to the 28.90 to support intrastate rate
2 usage? I know I would be willing to pay more than
3 28.90, but not two to $300 a month.
4 MS. GAGHAN: Well, right now, we
5 know what it would cost to spread it over a whole
6 of users. We have certain assumptions about possible
7 customers. But one of, as I mentioned earlier, one of
8 the main reasons we went out with the structure we
9 is so we could learn more about those usage
10 requirements and patterns so we could evaluate our
11 options like that.
12 MR. GUMERMAN: But your rate
13 that you've set up is going to influence what you
14 very strongly. It's going to influence the usage
16 MS. GAGHAN: True. Just as if you
17 charge for it, it would influence usage decisions. So
18 you have to start somewhere. So at least this way
19 will know the people who have a very strong
20 for the service and feel the value is there over and
21 above what they have for an analogue service. I
22 the performance is exceptional. The response time
23 makes a big difference in accessing a lot of the
24 applications. I guess based on the costs of our
1 network and the service, we couldn't in all good
2 conscious go out and offer a service below the costs
3 have to provide it. And ISDN is a service that not
4 everybody needs or will want. But that -- I don't
5 know what else to say.
6 THE HEARING EXAMINER: I have just
7 I guess I shouldn't be asking questions at this stage,
8 but I do have one. And that has to do with the
9 as you described them on the record.
10 Is there any other costs that a customer
11 will have to undergo besides the 28.90 plus usage?
12 MS. GAGHAN: Well, there's an
13 installation charge to actually put the service in. Is
14 that the kind of charge or do you mean on a
15 basis or in general?
16 THE HEARING EXAMINER: If I came
17 and wanted ISDN service, would I only have to pay
18 28.90 a month?
19 MS. GAGHAN: You pay the 28.90 a
20 plus usage charges for the rates I quoted or for data
21 usage. If you are using the service for voice, the
22 existing rates in Delaware are three cents for the
23 first three minutes and half a cent for each
24 minute which is basically 32 cents an hour for voice.
1 MR. GUMERMAN: Pardon?
2 THE HEARING EXAMINER: Just a
3 now I will be paying usage for voice?
4 MS. GAGHAN: Correct. Actually ISDN
5 the ISDN features sit on top of a local measured
6 service line. And the local measured service line
7 charges are what are already in effect in Delaware,
8 existing tariffs.
9 THE HEARING EXAMINER: So if right
10 I'm paying an intrastate rate for voice.
11 MS. GAGHAN: Yes.
12 THE HEARING EXAMINER: If I
13 ISDN, I will now have measured service?
14 MS. GAGHAN: Correct. And part of
15 reason we were doing that is to, one, deter people
16 working around the system and, two, to get a true
17 of usage, whether it be voice or data. And to be
18 honest, we figured that given the benefits of ISDN,
19 that voice usage would be very limited. People are
20 buying it for data.
21 MR. GUMERMAN: You might want to
22 your representatives at your 800 number, your ISDN
23 answer line about the measured voice calls. I spoke
24 with them two days ago and was told nothing
1 MS. GAGHAN: Which group, do you
3 MR. GUMERMAN: Bell Atlantic
4 ISDN group.
5 MS. GAGHAN: You did call the --
6 MR. GUMERMAN: Yeah. They knew
7 about that.
8 MS. GAGHAN: That's standard.
9 MR. GUMERMAN: They told me only
10 data charges. Nothing at all about measured. I
11 I had intrastate rate voice.
12 MS. LEONETTI: Delaware is one of the
13 states that still offers an intrastate rate coverage.
14 And probably they assumed, which they should not
15 that you knew voice would also be measured.
16 MS. GAGHAN: See, ISDN as we filed
17 on a measured rate local service line. So I'm sorry.
18 I thought you did know that.
19 THE HEARING EXAMINER: Now,
does one need
20 additional equipment to take ISDN service?
21 MS. GAGHAN: Yes.
22 THE HEARING EXAMINER: Is that
24 MS. GAGHAN: Oh, no. This is
1 the equivalent of your having a modem to work
2 computer. It's called an ISDN terminal adapter. And
3 it basically allows nonISDN compatible equipment
4 your PC or your plain old phone at home to work
5 ISDN line and to talk to our network.
6 THE HEARING EXAMINER: And what
8 MS. GAGHAN: It depends on what type
9 equipment you buy. But we have been able to
10 with a few vendors to get the price below $300,
11 is in the ballpark of what a high-speed 28.8 modem
12 about six months ago, I guess, 200, 250. Now, it's
13 much cheaper, but ISDN gives you much better
14 performance. So there are higher cost products,
15 depending on what you want, that can range as
high as a
16 thousand dollars. But there are full-function ISDN
17 terminal adapters that are less than $300.
18 THE HEARING EXAMINER: Are there
19 other charges that one will have to pay? Is there an
20 installation charge?
21 MS. GAGHAN: There is installation.
22 That's $125 for the ISDN line plus for the ISDN
23 capabilities and $35.96 which is the charge if you
24 installing an additional line into your home and not
1 just converting an existing line that's there. So if
2 you're putting a new line into your home, that
3 for running the local service line.
4 THE HEARING EXAMINER: Would I
5 put in a new line?
6 MS. GAGHAN: You do not have to.
7 perfectly able to use an existing facility in your
8 home. We do not recommend your making it your
9 line in your home for a couple of reasons which are
10 technology-oriented right now. ISDN is locally
11 powered, meaning that it drives its power source
12 your home. So if you plug the service in and you
13 your power in your home, you also lose your phone
14 service. So that means you can't dial 911, you can't
15 dial zero. So we do not recommend it at this point
16 your primary line in your home.
17 Fortunately, the main driver for ISDN
18 been data and on-line usage and most people have
19 additional lines for that purpose if they are serious
20 users, anyway. So it's been primarily a second line.
21 THE HEARING EXAMINER: Okay.
22 Ms. Stowell, do you have any
24 MS. STOWELL: No questions.
1 THE HEARING EXAMINER: Mr.
2 MR. CITROLO: No, Mr. Examiner. I
3 it was answered, though, if I could get a clarification
4 on the voice.
5 MS. GAGHAN: Certainly.
6 MR. CITROLO: The voice will be
7 and billed but according to the measured rates that
9 MS. GAGHAN: Correct.
10 MR. CITROLO: That was the only
11 clarification. So even a person who chooses an
12 intrastate voice plan will lose it with ISDN?
13 MS. GAGHAN: Correct.
14 MR. CITROLO: Okay.
15 MS. GAGHAN: In our tariff for ISDN,
16 specify that it needed a measured rate local line
18 MR. CITROLO: Okay. And if I could
19 clarify a couple things, Mr. Hearing Examiner, with
20 rates that were discussed earlier. That seems to be a
21 lot of the problem is the confusion with the rates,
22 what the 19.50 exactly gets you per month. And I
23 a tariff page in front of me what I interpret the
24 rate starts at 17.50. You pay a dollar for circuit
1 switch voice.
2 MS. GAGHAN: Or data.
3 MR. CITROLO: An additional dollar for
4 circuit switch data and then an additional dollar to
5 have simultaneous transmission of both.
6 MS. GAGHAN: No. The way that the
7 reads, it's a base of 17.50, and depending how you
8 each of the B channels configured, it's an incremental
9 dollar per B channel. So if I wanted to have one B
10 channel of circuit switch voice, it would be a dollar
11 for that B channel. And if I wanted the other to be
12 circuit switch data, it would be a dollar for that
13 channel. But if I wanted them to be configured to
14 support either voice or data, it would only be a
15 total for each channel. It's sort of like an either/or
16 proposition. You can have it support voice only,
17 only or both. And whatever you pick for those B
18 channels, it's a dollar no matter what. So the worst
19 you could end up paying is $2 on top of the 19.50
20 because the most you could pay is a dollar per B
21 channel, and there are two B channels, on top of the
23 MR. CITROLO: This clearly says each -
24 THE HEARING EXAMINER: Excuse
me. I want
1 to make sure I understand this. You said the most
2 can pay is $2?
3 MS. GAGHAN: On top of the 17.50 to
4 configure the service.
5 THE HEARING EXAMINER: Or you
can pay $1
6 for each channel.
7 MS. GAGHAN: No, no, no. Oh.
8 THE HEARING EXAMINER: Which is
9 MS. GAGHAN: Oh, well that's true. No
10 matter what you do, it still comes out to 19.50. We
11 just happened to price it the same because, in
12 the costs to provision it any of those three ways is
13 the same but we just needed to know when you
14 service how you want it configured. And so when
15 tell us, it just has an automatic dollar increment
16 associated with it. I'm sorry.
17 MR. CITROLO: Those who subscribe to
18 residence ISDN, and I want to only activate one B
19 channel but I want simultaneous transmission voice
20 data. What would my monthly recurring rate be?
21 MS. GAGHAN: In the tariff, we did
22 make one be an option for the consumer. Primarily
23 because, again, in response to the requirements, all
24 the customers that wanted to use the service never
1 found a need for only one B channel and they always
2 wanted to get the most out of the service as possible,
3 which was to do the two B 120 kilobit data wherever
4 they could; or in the work-at-home environments, to
5 able to have one line for their voice and the other
6 their data.
7 MR. CITROLO: Even under that
8 still read that it would be -- let me come back to
9 that. Then if I have to activate both B channels and
10 want to transmit at 128 kbs, I would pay four cents
11 minute, 7 a.m.-7 p.m. and two cents off beat because
12 would pay two cents per B channel.
13 MS. GAGHAN: That's correct. So that
14 comes out to $2.40 an hour in peak two B usage, or
15 $1.20 an hour in off peak two B use or 60 cents and
16 $1.20 if it's one B for nonpeak versus peak. So, yes,
17 it is per B channel.
18 MR. CITROLO: Okay. On the
19 recurring charge, I pay 17.50. That gives me
20 access residential IntellilinQ-BRI. An extra dollar.
21 MS. GAGHAN: Correct.
22 MR. CITROLO: Gives me alternate
23 switch and voice and data service per service
24 MS. GAGHAN: Per service provided.
1 MR. CITROLO: I'm at 18.50, right?
2 That's only an extra dollar.
3 MS. GAGHAN: Right, for one of the B
4 channels. Per service provided means per B channel.
5 MR. CITROLO: Right. That right there
6 tells me, though, if I want simultaneous transmission
7 on both B channels, I'm at 19.50 right there.
8 MS. GAGHAN: Correct.
9 MR. CITROLO: Okay. Now --
10 MS. GAGHAN: Which is the most.
11 MR. CITROLO: I can activate one
12 for voice and one channel for data.
13 MS. GAGHAN: Right. And you're still
15 MR. CITROLO: Let's say I do that.
16 at 19.50. I activate one channel for circuit switch
17 voice, one channel for data.
18 MS. GAGHAN: Okay.
19 MR. CITROLO: Now I'm on-line. I
20 send a fax. I can't do it.
21 MS. GAGHAN: You're on line with
23 MR. CITROLO: Say I'm with America
24 Line Prodigy.
1 MS. GAGHAN: And you want to send
2 MR. CITROLO: I want --
3 MS. GAGHAN: You can do that on the
4 channel. That would be like an analogue -- anything
5 you can do over your phone line today if it's
6 configured for voice is what you can do if it's
7 configured for circuit switch voice.
8 MR. CITROLO: Simultaneously?
9 MS. GAGHAN: Correct.
10 MS. STOWELL: And how much would
11 cost per month?
12 MS. GAGHAN: Per minute? If you're
13 sending it over as a voice call, which is what most
14 faxes would be considered, that would be at the
15 rates which would be 32 cents an hour.
16 MR. CITROLO: My question really
17 according to the tariff pages, why would I do
18 else but pay a dollar per B channel for option C
19 is an alternate circuit switch voice and data service?
20 I mean, I'm paying the same rate, 19.50, but I have
21 simultaneous transmission on each B channel for the
22 same price.
23 MS. GAGHAN: No, no. You get that
24 the -- either way. To be -- I guess the confusion is
1 that we broke the elements out more from a
2 perspective rather than a capabilities perspective.
3 You have the same capabilities -- if you have one --
4 I'm trying to think. If you have your line configured
5 for circuit switch data or for one B channel and you
6 have your line, your other B channel configured for
7 circuit switch voice, you can get the same benefit as
8 if you had either one of them configured for circuit
9 switch voice or data. You get the same functionality
10 over the two B channels regardless of how you
11 each B channel, if that makes any sense.
12 MR. CITROLO: I'm not arguing with
13 logic of the transmission. I'm arguing with the
14 of the tariff pages. This leads me to believe that if
15 I want to subscribe to residential IntellilinQ-BRI
16 service, I want to activate two B channels and have
17 simultaneous transmission of voice and data on each
19 MS. GAGHAN: Right.
20 MR. CITROLO: I would pay a dollar
21 activate voice per channel, a dollar to activate
22 circuit switch data per channel and a dollar for the
23 simultaneous on each. And I'm up to 18.50, 19.50,
24 20.50, 21.50, 22.50, 23.50.
1 MS. GAGHAN: No. I guess we didn't --
2 MS. GAGHAN: It's confusing.
3 MR. CITROLO: That seems to be what
4 says where the 19.50 always comes off as an absolute
6 MS. GAGHAN: It's actually the
7 and the minimum, basically. No matter how you
8 configure it, it's the same rate. And I guess by
9 breaking it out by how you could possibly configure
10 service, we made it more confusing. We probably
11 have said it's 19.50, but you need to specify how
12 want the service used instead of -- so it's probably
13 just how it's presented. It has no cost or
14 implementation difference.
15 MR. CITROLO: How I interpret it is if
16 someone were to ask me what the rate is and I read
17 this, 19.50 still is a minimum.
18 MS. GAGHAN: And a maximum.
19 MR. CITROLO: As the way I read this.
20 understand what you're saying.
21 MS. GAGHAN: It never will be any
22 It's basically that it's not clear.
23 THE HEARING EXAMINER: We can't
24 at the same time, for the court reporter. She can't
1 record two voices. I know this is getting you all
3 MS. GAGHAN: No. It's there.
4 MR. CITROLO: Because then I don't see
5 where you say if it's 19.50 for option A and B.
6 MS. GAGHAN: And C.
7 MR. CITROLO: Or, well, then, just C.
8 Because I read C to say alternate circuit switch voice
9 and data service per service provided, $1. That's --
10 MS. GAGHAN: Per B channel.
11 MR. CITROLO: I have to activate both
12 channels for residence.
13 MS. GAGHAN: Correct.
14 MR. CITROLO: So we're at $2. Option
15 says circuit switch data service per service provided,
17 MS. GAGHAN: That'll be on one of
18 channels. If you did it on both, that would be $2.
19 MR. CITROLO: But the per service
20 provided clause clearly implies that it's $1 per
22 MS. GAGHAN: It is.
23 MR. CITROLO: So it's two, four, six
24 you read this. I mean, that's -- I mean, it's clear to
1 me what you said, but this has per service provided.
2 THE HEARING EXAMINER: I think this
3 is one that perhaps can be clarified between now and
4 when we hold the evidentiary hearing. This is more
5 a discovery type of thing that should be --
6 MS. STOWELL: Maybe what needs to
7 is the tariff rewritten.
8 MS. GAGHAN: That would probably
10 MS. STOWELL: So that it says
11 multiple --
12 THE HEARING EXAMINER: I mean,
13 on the record that there is a lot of confusion about
14 the way the tariff obviously appears. I mean, this is
15 not an evidentiary hearing and so, you know, we
16 shouldn't get into the formality of it. But I think
17 this is something that the Company and the Staff
18 the OPA can look at informally and when we get to
19 formal hearings at some point before I get back to
20 Commission, I would like to see the language in the
21 tariff cleared up so the customers and the
22 will understand exactly, you know, what the price is
23 that's being offered for this service.
24 MR. CITROLO: I just had one
1 the first gentleman who spoke. Are you a BRI
2 subscriber right now?
3 MR. GUMERMAN: No.
4 MR. CITROLO: There are effective the
5 31st of this month will be discounted block programs
6 for BRI. I don't know if that brings it more on line
7 than what your comparison was about the rate
9 MR. GUMERMAN: My comparison was
10 you had a 56K leased line costing, you know,
11 between 150 and 250, $300 a month, ISDN is a very
12 solution to replacing that, bringing the cost down.
13 And as technology moves forward, the cost should
14 down. And it struck me that Bell seems to be
15 the advancing technology that they want to bring it
16 but they don't want to bring it out in case it might
17 disrupt their other existing infrastructure.
18 MS. GAGHAN: Well, the crossover
19 with those services is so high.
20 MR. GUMERMAN: Not if you're
21 about a 56K leased line. You were comparing it to
23 MS. GAGHAN: Well, actually --
24 MR. GUMERMAN: Which it's not.
1 MS. GAGHAN: Our DCS which is a 56
2 kilobit leased line service is $205 per month per end
3 which means it's $410 for a 56 kilobit circuit. With
4 ISDN, you get two 64 kilobit circuits which would
5 twice that which would be about $820 per month.
6 have switched 56 service which is $150 per month for
7 56 kilobit circuit which times two to equate to a two
8 ISDN which would be $300 a month. But there's
9 top of that of 14 cents a minute. So, really, the
10 crossover point is pretty --
11 THE HEARING EXAMINER: Just a
13 (A brief recess was taken.)
14 MR. GUMERMAN: I did want to ask
15 the logic, and perhaps you're not the right person to
16 ask, but what is the logic behind having an
17 rate tariff for POTS voice service, just standard
18 service available and not having it available if the
19 delivery method is ISDN?
20 MS. GAGHAN: Well, with our voice
21 service, we have lots of history and experience in
22 understanding the use and requirements of people in
23 that arena. So we've been able to offer it as a rate
24 that is universally affordable. It's also a subsidized
1 service. It does not cover its cost today. Other
2 services are paying for the usage of that service or
3 the facilities in our network to support that service.
4 So its intent and goal was to provide universal voice
5 availability for our customers for basic phone
6 requirements and it was priced based on certain
7 assumptions. And because of the use of those
8 facilities for other things than what they were
9 originally rated for, basically we're incurring much
10 more substantial costs than really are actually
11 less and less to cover those costs because people are
12 using those facilities when they should be using
13 something else that is better suited to the
14 requirements that covers that network requirements
15 that service.
16 I probably didn't answer that very
17 but --
18 MR. GUMERMAN: Surely there must
19 calculations of costs that explain the difference in
20 the tariff going back to the regular voice for
21 service versus intrastate rate service. And --
22 MS. GAGHAN: All of the rates are
23 on certain usage assumptions and customer base
24 assumptions. I mean, voice is universal. It's a
1 hundred percent of our -- or almost virtually a
2 percent of our 12 million households have voice
3 service. And because of public policy needs and
4 requirements, we have made that service available at
5 very affordable rate that actually is being paid for by
6 other services that Bell Atlantic offers, whether they
7 be business services or value-added residential
8 services. And so that was geared for very different
9 objectives and assumptions.
10 When we introduced new services, we
11 different sets of assumptions that these new services
12 in almost, I guess, every single case are geared
13 meeting enhanced requirements or needs of our
14 beyond basic phone access. So they have emergency
15 access or lifeline service. And so we have a policy
16 that we will introduce services that cover their costs
17 and that bring a reasonable return to the company
18 help pay for that other base of universal service.
19 And so they're very different objectives
20 and assumptions and we've tried to price any new
21 service to meet the requirements of the users of
22 services as best we can and still cover the costs of
23 providing them. It's just very different needs being
24 met. And when services that were geared toward
1 of objectives, namely universal voice access, are being
2 used for other things, that kind of puts in jeopardy
3 that overall model. If anything new comes out that
4 also is being subsidized that builds that base of costs
5 that have to be covered somewhere, it makes it
6 and bigger. And I guess as a business, we can't
7 to do that indefinitely or eventually we'll go out of
9 MR. GUMERMAN: I can understand
10 All I can say is that if you want to build ISDN,
11 up with an intrastate rate and you will build it
12 quickly. And it doesn't have to be a giveaway rate.
13 But, you know, the question of not knowing what
14 going to cost me and especially not being able to
15 that, use a B channel for a voice line and have it be
16 the same as what I'm paying now, why should I
17 MS. GAGHAN: Well, I assume you
18 wouldn't buy ISDN for voice because you can get
19 perfectly acceptable voice service and enhanced
20 features over the plain old telephone network today
21 very affordable rates. So I guess given that our
22 orientation is that ISDN is beneficial primarily for
23 data and image and video capabilities, that it is at a
24 reasonable rate for the performance and the value of
1 that service. But may I ask a question?
2 MR. GUMERMAN: Sure.
3 MS. GAGHAN: I don't know if I'm
4 to do that.
5 From a customer perspective and a
6 perspective user of ISDN, when you talk about
7 intrastate rates, I mean, packages for certain volumes
8 that give you a break that you could predict monthly
9 acceptable in your mind or are you looking for
10 something that has just an unlimited potential for a
11 fixed rate? Because there's ways with a package
12 can make a service rate much more affordable on a
13 monthly basis than if you have it open-ended where
14 could be literally 24 hours a day, you know.
15 MR. GUMERMAN: Well, like you, I
16 be experimenting with ISDN. I can't right now. I
17 don't know if the uses that I will have will be
18 amenable to setting up and tearing down
19 using it that way or whether I'm really going to
20 to be up 24 hours. I won't be sending a lot of data.
21 I'm pretty sure of that. I don't expect a lot of
22 traffic but I do need to be able -- I need the
23 conductivity one way or another.
24 And you could sell so much of this
1 it would be -- I think you would be surprised if you
2 price it differently.
3 MS. GAGHAN: Do you have an idea of
4 you would consider reasonable under that type of a
6 MR. GUMERMAN: For an intrastate
7 would easily pay two, two-and-a-half times this rate
8 and be -- and I think a lot of people would rather
9 have a bill that they don't know what it's going to
11 MS. GAGHAN: Okay. Is it that you
12 to be physically connected 24 hours a day because
13 application won't allow things to be deposited like a
14 central E-mail server or something?
15 MR. GUMERMAN: Yes.
16 MS. GAGHAN: It has to have your PC
17 MR. GUMERMAN: We're talking on
18 InterNet here, which means if I'm a web site, it
19 to be -- it needs to answer when someone calls.
20 MS. GAGHAN: Okay.
21 MR. GUMERMAN: And if we can do
22 setting up and tearing down connections, that
24 MS. GAGHAN: Okay. From what I
1 understand, there are ways to make the equipment
2 talking to each other basically do that automatically
3 without having to keep the circuit nailed up all the
4 time so that you're basically getting the benefit of
5 the access when you need it but it's not physically
6 tying up one of our facilities through the network so
7 that nobody else could use it, which is a concern of
8 ours because if you do have 24-hour-a-day tie-up
9 though you're not sending data out, that's facilities
10 tied up for us. That's our concern for rating it so
11 you don't leave it up when you're not using it
12 that hurts us and the rest of our customers.
13 Is this structure or a package structure
14 that unappealing to you? It's just that it's measured
15 from the get-go that is least appealing or if you had
16 something that would equate to what your real on-
17 time was for a reasonable rate, would that meet
19 MR. GUMERMAN: Measured rates
20 get-go bother me because like everybody in this
21 have when you pick up the phone and you pay
22 monthly cost for it and that's it. I can understand
23 that Bell might want to change that. But it's
24 going -- it's going to be a big fight. I can see
2 MS. GAGHAN: Well, I mean, we don't
3 to change it for our voice customers because that is
4 something, at least -- well, I should say we want to
5 be able to provide universal access for our voice
6 customers, but the network is no longer being used
7 voice or as predominantly for voice as it used to be.
8 And so there are going to have to be other models to
9 help us reflect today's use of the facilities versus
10 the old model. I like the model today but a lot of
11 use of it anymore is not covering the cost of those
13 MR. GUMERMAN: Yeah. I guess I
14 very interested to know at what point in this
15 tariff would it be feasible to make it truly intrastate
16 rate because I think as a matter of public policy
17 there are a lot of advantages, even if it costs
18 10 or 15 or $20 a month just to get it period, there's
19 a lot, I think there's a lot of advantages to
20 encouraging this rather than trying to -- rather than
21 discouraging it. And this tariff, I think this is
23 MS. GAGHAN: It's a fine line to draw
24 have a service that really opens up the potential for
1 customers to take full advantage of the network
2 potentially setting up a whole host of private lines
3 through our network, which is a very real possibility.
4 The more people like yourselves and ourselves that
5 really get hooked on using the better facilities
6 through the network and we have to be very careful
7 we're not defeating the whole purpose of a public
8 switch service. So it's kind of like a balancing act
9 between how to make it as affordable and conducive
10 usage as possible, but without basically building a
11 private network for everybody who wants to use
13 So we're trying to balance where you
14 cover the costs and incent usage at the same time
15 we went out the door with a structure that basically
16 covered costs and tried to make that base starting
17 point as low as possible and then you just pay for
18 you use. I think that was a good starting point but
19 we're working on other things.
20 MR. GUMERMAN: Okay. Thank you.
21 MS. GAGHAN: Because we didn't
22 point to pick that would meet the requirements
23 talking about and not blow our network out of the
1 THE HEARING EXAMINER: Are there
2 other comments?
3 (No response.)
4 THE HEARING EXAMINER: I guess
5 we'll adjourn at this time and there's another public
6 comment session scheduled for Thursday night at
7 in Wilmington. Thank you.
8 (The public comment session was
9 at 8:17 p.m.)
C E R T I F I C A T E
14 Notary Public-Reporter
Volume 3 82
1 PUBLIC SERVICE COMMISSION
2 STATE OF DELAWARE
3 In the matter of the tariff :
filing of Bell Atlantic - : P.S.C. Docket
4 Delaware, Inc. for the : No. 95-014T
implementation of residence :
5 ISDN service :
The above matter came on for public hearing
7 on Tuesday, January 18, 1996, at 7:00 p.m. in the
Elbert N. Carvel State Building, N. French Street,
8 Wilmington, Delaware.
G. ARTHUR PADMORE, The Hearing Examiner
13 On behalf of Public Service Commission
14 BARBARA MacDONALD, ESQ., Staff Rate
JOHN CITROLO, Public Utilities Analyst
16 On behalf of Bell Atlantic - Delaware:
17 DOUG SMITH
18 GINNY LEONETTI
On behalf of Office of the Public Advocate:
WILCOX & FETZER
24 1330 King Street - Wilmington, Delaware 19801
1 THE HEARING EXAMINER: Good
2 This is an evening public comment session in Docket
3 95-014T and it concerns the Bell Atlantic application
4 to provide our residents ISDN service. The tariff has
5 already gone into effect as of November and the
6 Commission is having an investigation into the rates
7 determine whether or not they are just and
8 And the purpose of this hearing is to receive public
9 comment concerning the Bell Atlantic service; after
10 which the Commission will then have a formal
11 that the parties may present evidence for or against
12 the proposed rates.
13 Bell Atlantic has representatives here.
14 I'll ask them to introduce themselves for the record.
15 MR. SMITH: I'm Doug Smith, director
16 regulatory affairs.
17 MS. GAGHAN: I'm Linda Gaghan,
18 and marketing manager for residential ISDN.
19 MS. LEONETTI: Ginny Leonetti, filing
20 manager, Bell Atlantic Delaware.
21 THE HEARING EXAMINER: And the
22 is also represented.
23 MS. MacDONALD: I'm Barbara
24 Staff rate counsel.
1 THE HEARING EXAMINER: As is the
2 of the Public Advocate.
3 MR. BARUA: Rajnish Barua for the
4 of the Public Advocate.
5 THE HEARING EXAMINER: And we
6 member of the public present, Mr. Stewart Dickson
7 wishes to make some comments concerning the Bell
8 Atlantic tariff and service. But before you begin,
9 Mr. Dickson, I'll let a representative from Bell
10 Atlantic give a brief overview of what's involved
11 then you may speak.
12 I'm taking these comments to become
13 of the record of this proceeding and so I would ask
14 when you speak to confine your remarks to the
15 matter at hand which is the ISDN service and the
16 proposed rates.
17 MR. SMITH: Thank you, Mr. Hearing
18 Examiner. At this point we've got some brief
19 prepared by Linda Gaghan.
20 MS. GAGHAN: Good evening, ladies
21 gentlemen. I'm here this evening to answer
22 about residential ISDN. And for those of you who
23 not as familiar perhaps with the service, I wanted to
24 just highlight some of the aspects of the service.
1 ISDN service is like getting two phone
2 lines over a single pair of wires into your home, the
3 same kind of wires that you have running into your
4 today. It can be used to make normal voice or fax
5 calls but, more importantly, to send and receive
6 information much faster from your computer.
7 Assuming the folks in the audience
8 are current on-line or InterNet users, then you're
9 probably using a high-speed modem to access these
10 services today. But with ISDN, you would be able
11 access these services much faster, up to eight times
12 faster if you use a 14.4 modem or four times faster
13 you have a 28.8 modem. I have handouts that I
14 with me that show a few real life examples that we
15 clocked of the speed difference between ISDN and
16 highest speed analogue modem. And the more
17 or video intensive the application, the greater the
18 benefits of ISDN.
19 One example that's listed is we accessed
20 CNN, the Cable News Network's InterNet site and
21 up a news story, an audio clip and a video clip
22 took less than three minutes with ISDN and almost
23 11-and-a-half minutes with a 28.8 modem which is
24 fastest. And the difference would have even been
1 greater if you had a slower modem.
2 We believe this particular benefit will
3 be appealing to the growing base of home InterNet
4 on-line services users which already number in the
5 of millions and to the growing and large 64 million
6 base of individuals who work from home in some
8 As our initial entry into the market
9 the residential ISDN, we've positioned the service so
10 that it is as widely affordable as possible and as fair
11 as possible to the broadest number of people so that
12 only the users of the service are paying for the cost
13 of the service and that each individual only pays for
14 what they use. No more, no less.
15 This way ISDN as a service stands on
16 own. It covers its own costs and is not being
17 subsidized by any other service or group of
18 in Bell Atlantic. Also, this way the smaller users
19 don't end up subsidizing the heavy users.
20 Our proposed pricing structure, in
21 to subscribe to ISDN, it will cost you $19.50 per
22 for the ISDN capabilities; $125 to install the ISDN
23 line. There are data usage rates of two cents per
24 minute per B channel during peak times which are
1 through Friday, 7 a.m. to 7 p.m., and nonpeak rates
2 one cent per minute per B channel, which is all other
3 times in the evenings and on weekends which is
4 most residential users would be using the service.
5 These rates are on top of a local
6 measured rate dial tone line which, in Delaware, is
7 $9.40 a month; plus, if this is a new line going into
8 your home, there is an installation charge of $35.96.
9 If you're converting an existing line in your home,
10 that charge does not apply. There are voice usage
11 charges associated with this line of three cents for
12 the first three minutes and half a cent for each
13 additional minute.
14 As we gather more information about
15 of ISDN and customer requirements for the service,
16 do plan to introduce other pricing options that will
17 meet different users' requirements. This is
18 we're working on actively right now and plan to
19 introduce by no later than the end of this year and
20 hopefully much sooner.
21 Now I'd like to just open the floor for
22 your comments and questions.
23 MR. DICKSON: Okay. I'm a
24 visual artist and a technical expert in telephony and
1 computer networks. I will attach my resume to my
2 written comments when I hand those in.
3 As far as my research has shown me, it
4 looks like Bell Atlantic's current ISDN tariff for the
5 state of Delaware is in violation of the principle of
6 universal access as guaranteed by the
7 Act of 1934. Bell Atlantic's pricing looks
8 anticompetitive to me. It widens the gap between
9 technological haves on the national information
10 infrastructure and the have-nots who cannot afford
11 get on line. Word on the street is that ISDN is
12 prohibitively expensive and no one is buying it for
13 that reason.
14 High pricing discourages the
15 and development of electronic commerce by small
16 businesses in the state of Delaware when consumers
17 cannot afford to get on line. I believe that small
18 businesses are going to be the ones employing more
19 people in Delaware than a giant communications
20 corporation would contribute to the employment
21 Competitive pricing, on the other hand,
22 of high-speed data communications could promote
23 telecommuting from offices in the home and
24 automobile congestion on Delaware's streets and
2 Pricing ISDN service by the minute does
3 not reflect the real cost of providing the wire
4 connection and the switching service. In fact, there
5 are technical reasons. And I attach a footnote to the
6 end of my comments explaining these technical
7 why pricing by the minute could actually consume
8 of Bell Atlantic's switching resources than a flat-rate
9 pricing would. Flat-rate pricing could actually reduce
10 the cost to Bell Atlantic of providing ISDN service
11 I can support this claim from my own experience.
12 I've been an ISDN user since March
13 In June '95, I relocated from Thousand Oaks,
14 California, to the Pike Creek Valley in Delaware.
15 Somehow for the three months I lived in California
16 using ISDN, GTE California was able to wire its
17 area many times larger both in population and in
18 of wiring than the entire state of Delaware and
19 two B channels of ISDN service for a flat rate of
21 In Delaware in six months, I have
22 paid Bell Atlantic more than I would have paid for
23 years of service in California. I have paid this for a
24 local telephone call covering 11 miles of distance
1 the Pike Creek Valley to Wilmington. And I have
2 received for my money half the data transmission
3 I had in California. In Delaware, only one B channel
4 is more than I can reasonably afford. I think this is
5 unfortunate because I believe I have valuable
6 information to provide, to share with the public.
7 I am an originator of a technique to
8 create physical sculpture of computer-generated
9 abstractions called scientific visualization using
10 direct 3-D mechanical printers, and I've documented
11 this work on the InterNet. I can bring computer
12 pictures out from behind the computer screen and
13 you to hold them in your hands. I can let a person
14 experience computer graphics for whom images on a
15 cathode-ray tube provide no information. These
16 be blind people and those with cognitive disabilities.
17 Networked computers can provide this experience.
18 television will ever do this. No corporation has
19 this. It took the efforts of an individual on an
20 individual's budget to do this.
21 The InterNet is a collective of
22 over four million individuals. The InterNet is like
23 truly democratic multimedia publishing. The
24 is currently owned by everyone and every InterNet
1 is its own information center. On the InterNet, the
2 media is not them, it is us. Letting the InterNet fall
3 into the hands of a communications giant will turn it
4 into the same old us-and-them situation we have in
5 current electronic media. In the InterNet, we have a
6 chance to build a future world which is better than
7 past worlds. Flat-rate pricing for local telephone
8 connection will promote this.
9 And if you're interested, I can go into
10 the technical reasons that I was talking about. The
11 way I did things in California were substantially
12 different from the way I'm doing things in
13 over the wires and I believe I saved GTE California
14 some load on their equipment the way we were
15 run there that I'm not saving Bell Atlantic by the
16 we have to run -- with the way we're forced to run
17 here. If you'd like me to go into that, I'd be glad
19 MS. GAGHAN: Sure. I'd like to hear
20 what you have to say.
21 MR. DICKSON: Okay. I used an
22 word router to run my wide-area network over
23 It's called an ascend communications pipeline 50.
24 a bridge between a users local-area network and the
1 wide-area network which would be the first top
2 connection to the user's upstream InterNet access
4 The time required to connect an ISDN
5 is very short. It's imperceptible to the user of a
6 desk-top InterNet application like a worldwide web
7 router. The ascend pipeline 50 has features to
8 automatically connect a call when the local area
9 network requests packet transmission to the wide-
10 network. Similarly, the pipeline 50 also has a user
11 configurable timer which governs how long the
12 will maintain the ISDN call after the last packet has
13 been transmitted or received.
14 After this time has expired, the router
15 hangs up the call and waits for the next packet to
16 originate from the local-area network. In a
17 economy in which money is charged per minute of
18 connection, the information consumer can set the
19 time out very short to save money when the user is
20 actively transmitting. In a situation which is billed
21 by the minute, the InterNet access provider will
22 originate a call to the end user even to transact
23 electronic mail because the provider will incur a
24 per-usage cost while he is most likely charging his
1 customer a flat monthly rate.
2 Even though modern electronic mail uses
3 direct sender to receive transfer protocol, InterNet
4 access providers often revert to the old store and
5 forward approach in order to provide service without
6 incurring per-use costs from the telephone company.
7 an end user wishes to serve information to the
8 from his home computer, an economy which bills per
9 minute does not work. When the access provider's
10 router receives packets from the InterNet destined
11 the end user, the end user's computer and the
12 information he means to publicly serve are simply
13 available. If the end user wishes to be available, he
14 must set his router so that a call is always
15 regardless of whether or not data is flowing.
16 In a flat rate ISDN telephone economy,
17 costs the InterNet access provider nothing extra to
18 originate calls to an end user when requests from
19 InterNet are made to the user. Calls can be set up
20 request in either direction and terminated minutes
21 after the data flow stops. A virtual data connection
22 will not consume switching channels when no data
23 actually flowing. I believe this scheme actually uses
24 less of a telephone company's resources than a
1 which bills for time.
2 And ISDN is really a pretty reasonable
3 approach for an information server when you
4 something to switch 56 which at least over a few
5 ago cost a lot extra in terms of the routing hardware
6 and installation and monthly. And it's twice the
7 width of switch 56. And it still is about a fifth of
8 the cost of a -- I mean, ISDN is still about a fifth of
9 the cost of a T1 trunk. But it's not real peachy yet.
10 Thank you.
11 THE HEARING EXAMINER: Thank
12 Mr. Dickson.
13 Further comment from Bell Atlantic?
14 MS. GAGHAN: Well, I guess just one
15 comment I might like to make about the uses of
16 switch network services such as the final telephone
17 network or ISDN. They're designed to provide
18 conductivity to a large number of customers and
19 the cost of those services shared over a broad
20 of people. And we engineer our network so that
21 given facility is shared by multiple people. And
22 helps drive the cost down because you don't have a
23 one-to-one relationship in the service network with
24 every user that might want to take advantage of the
2 In our voice network, we engineer eight
3 individuals to share a single facility through the
4 network. And for ISDN, for residential service, we
5 engineer it four to one. And we deploy facilities to
6 support that kind of usage of the network and we
7 it to cover the costs of those facilities necessary to
8 support it.
9 And whenever any individual or group
10 individuals use the facilities beyond how they've
11 engineered, they're basically taking those facilities
12 out of the mix for other people to get access to
13 more quickly escalates when we'd have to add
14 equipment and very quickly you're getting to a
15 where it's a one-to-one relationship between users
16 network facilities, which is essentially a private-line
17 network. And that becomes very cost-prohibitive
18 individuals of moderate levels of usage that may
19 to take advantage of the feature benefits of a service
20 like ISDN or the analogue voice network, but they
21 can't afford it if it's being -- the network's being
22 engineered to be shared on a one-to-one basis for
23 individuals that want to use it all day long. It
24 really sounds like if you need that 24-hour a day
1 conductivity, that is a -- you're basically saying you
2 need a facility that's only available for your use that
3 nobody else can share because you need it tied up all
4 day for you. And that's really not what public
5 network services are designed to do.
6 So there are crossover points at which
7 the volume is so substantial that a public switch
8 network is just cost-prohibitive and then you would
9 typically migrate to something else.
10 And when we set our pricing for ISDN,
11 drove that base down to 19.50 to the lowest that we
12 could reasonably do to cover our costs and then
13 on a metered basis until we could gather more
14 and usage intelligence so that we could then set
15 packages out there that would give volume breaks
16 people based on their needs without jumping right
17 flat rate of a certain amount which would then
18 automatically put everybody who used a volume
19 that would cover at a disadvantage and basically
20 for the folks who exceeded that volume level.
21 So when we went out in our initial
22 offering, we wanted to have it so that you paid for
23 exactly what you used and as we learn more about
24 requirements, we want to offer other things that
1 perhaps better suit your requirements on the
2 high-volume end. But for an initial offering, we
3 didn't want to discriminate against the smaller guys
4 the expense of the very high-volume folks who do
5 other service options available, albeit they're a
6 little more expensive, but they're more in keeping
7 the kind of usage of the network and the types of
8 facilities that are being provided which are very high
9 value. One hundred twenty kilobits of data speed is
10 pretty nice for a public switch service. And with a
11 digital quality, you get quite nice results.
12 MR. DICKSON: Okay. Right now I'm
13 of a line hog than I need to be. I'm keeping pretty
14 good records of my usage and my peak hours are
15 after midnight. My only real low dip is about 5
16 And I think the weekdays are pretty, you know,
17 and I think things go up really after business hours.
18 MS. GAGHAN: Just a question if you
19 don't mind. Are you currently a user of our
20 ISDN service? It sounded like --
21 MR. DICKSON: Residential.
22 MS. GAGHAN: Because at most, you
23 be paying two cents a minute.
24 MR. DICKSON: Well, my rates just
1 down when it was -- when the residential rate was
2 informally instituted in November. Okay? My bills
3 were $640 a month and now they're down to about
4 MS. GAGHAN: Okay. I'm also curious.
5 With the ascend pipeline 50 which is a very nice
6 of equipment, if it -- I thought it could be
7 programmed so that it could automatically detect
8 call was being made in or out or when it needed to
9 a call out.
10 MR. DICKSON: Except I'm paying a
11 rate to my upstream provider who is Performance
12 International. They don't -- they don't -- they
13 never call me when packets come from the InterNet
14 me. I have to -- I can only connect a call when I
15 call them and I never know when something is
16 be coming back.
17 So if I want to be available on the
18 InterNet, I have to keep the call nailed up all the
19 time. I'm keeping it nailed up the first half hour of
20 every hour and then after that, I assume that packet
21 flow is going to keep it up the rest of the hour.
22 Otherwise, if there's no flow like at five in the
23 morning, the call is down from 5:30 to six.
24 MS. GAGHAN: Okay. So it sounds
1 you're running like an information server in your
3 MR. DICKSON: Yes, ma'am.
4 MS. GAGHAN: Like a little bit where
5 publish information?
6 MR. DICKSON: It's not business. It's
7 art. I have specific reasons for doing this. I'm
8 doing experimental interactive art works that I
9 wouldn't ask any information provider to put on his
10 computer. I wouldn't ask him to take the security
11 because I can't guarantee that these applications are
12 bulletproof. Okay?
13 So I need to have my own server in
14 place and have access to it to develop these --
15 these things. I have this relationship with my
16 where I need the constant interaction. I'm building
17 thing called a regenerative InterNet-driven
18 philosophical engine which is going to make
19 some conclusions about the population of the
20 THE HEARING EXAMINER: Okay.
21 another gentleman here. Are you here to make
23 MR. SHAW: Well, I don't know who is
24 representing who on that panel up here.
1 THE HEARING EXAMINER: Well, these
2 the representatives from Bell Atlantic and these are
3 the representatives from the Commission and a
4 representative from the Public Advocate.
5 MR. SHAW: All right. I've spoken to
6 today. My only interest -- I'm a residential user
7 and --
8 THE HEARING EXAMINER: Please
9 yourself for the record.
10 MR. SHAW: Reggie Shaw.
11 THE HEARING EXAMINER: And your
12 MR. SHAW: You mean my street
13 THE HEARING EXAMINER: Where do
15 MR. SHAW: Wilmington, Delaware.
16 THE HEARING EXAMINER: Fine.
17 MR. SHAW: And like I said, I'm just a
18 residential user of the InterNet and I've been
19 following the rate tariff conversations on the
20 InterNet. And it just seems like what Bell Atlantic's
21 offering is too expensive for the average consumer.
22 You know, you get a separate line. You're paying
23 InterNet service provider about $30, $15 for the line,
24 their meter charge and it can go -- you know, I only
1 use it maybe two hours an evening and it would
2 probably over a hundred dollars a month.
3 MR. DICKSON: Can I --
4 THE HEARING EXAMINER: No. Just a
5 minute. This is being transcribed so it's very
6 difficult if I have two or three people speaking at
7 once. When he gets through.
8 MR. SHAW: No. I'm just concerned
9 the rate, you know. I'd like to see it more
10 affordable. Then you'd have -- more people would
11 able to use it. That's all.
12 THE HEARING EXAMINER: Thank
you. Do you
13 have anything further?
14 MR. DICKSON: I wanted to correct the
15 record on upstream InterNet access charges for ISDN
16 service. Performance Systems International charges a
17 $500 setup and $250 a month available in three-
18 installments for ISDN level service. It's not 20 or
19 $30 a month. That's analogue modem rates that he
20 quoting, 20 or $30 a month.
21 MS. GAGHAN: Not for PSI. For a
22 dial-up ISDN user that's just accessing their service
23 using their interramp service which covers ISDN
24 their dialogue analogue, they still charge you only
1 for 30 hours of use or they have a $9 for 9-hour use
2 package, as well. They're not charging the private
3 line or special rates, unless you're doing something
4 a business level where you may need to interact
5 might be akin to what your application is. But
6 dial-up use is still only $30 a month.
7 THE HEARING EXAMINER: Is this PSI,
8 a service offered by Bell Atlantic?
9 MS. GAGHAN: No. No. Performance
10 Systems International is an international access
11 provider who has a point of presence in Delaware.
12 THE HEARING EXAMINER: I see.
13 interesting, but not relevant.
15 MR. SHAW: I'm also concerned about,
16 guess, Bell Atlantic, their cost analysis was sealed.
17 It's not open to the public to see it. I mean, how
18 we to determine what's fair or not, you know, when
19 under seal?
20 THE HEARING EXAMINER: Would
you like to
21 answer that?
22 MR. SMITH: I'd be happy to. The
23 has an arrangement with the Public Service
24 and the Office of Public Advocate also has a role in
1 the state of Delaware to protect the interests of the
2 consumers. They have access to our proprietary
3 information and they, in fact, have a representative
4 sitting right in front of you whose sole intent is to
5 protect your interests and has access to that
6 information. Unfortunately, we can't provide that
7 information to every member of the public because it
8 is, in fact, proprietary to our business. And since it
9 is a competitive service, it just wouldn't be the right
10 thing for our business to do to make that available
11 just anybody.
12 MR. SHAW: How's it competitive?
13 else is offering ISDN besides yourself?
14 MR. SMITH: ISDN-like services are
15 available through other vendors, which we were just
16 talking about PSI. There are a number of them in
17 Delaware. I forget the count. Twenty-eight?
18 MS. GAGHAN: Yes.
19 THE HEARING EXAMINER: Well, just
20 confirm that the Commission does have access to
21 information as does the Public Advocate. But the
22 also requires that a private company has -- there's
23 certain information that is proprietary that they
24 the right to keep it under seal and the law provides
1 for that. That's why you have agencies like the
2 Commission and the Public Advocate to try to
3 the interests of private consumers, of residential
4 consumers, in fact.
5 MR. SHAW: Well, I haven't heard any
6 their recommendations on whether they think it's a
7 proposal or not, you know.
8 THE HEARING EXAMINER: Well, Mr.
10 MR. BARUA: We're still investigating
11 this filing, and at the appropriate time of hearings,
12 eventually, we'll be collecting more information and
13 that time we'll formulate our position. But you are
14 welcome to, you know, stop by our office and
15 with the Public Advocate your concerns.
16 MR. SHAW: Was this advertised in the
17 paper, this meeting tonight?
18 THE HEARING EXAMINER: Yes, it
19 If there's nothing further, then we will
20 adjourn. There will be an evidentiary hearing on
21 March 29th, right, here on the third floor conference
22 room B beginning at 9:30. Members of the public
23 attend. They may not, of course, participate, but
24 may attend and hear the positions of the Public
1 Advocate as well as the Commission Staff and the
2 Company on the issues involved in ISDN service.
3 Thank you very much for participating.
4 wish there had been more because it's many times
5 we have these public input sessions, it affords all of
6 the parties to hear how the public feels about a
7 particular utility's service and that way all of the
8 parties have an opportunity to modify whatever
9 positions they have taken on these issues. And your
10 comments have been very constructive and, as I
11 they will be relayed to the Commission when it
12 time for a final decision. Thank you.
13 (The hearing was concluded at 7:30
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C E R T I F I C A T E
14 Notary Public-Reporter
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