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PacBell Puts Its Videotex Plans on Hold

October 06, 1989|BRUCE KEPPEL | Times Staff Writer

Pacific Bell put on indefinite hold Thursday its dream of becoming an electronic "gateway" linking its telephone customers to a wide range of computerized information services--a business that it had expected to be a major moneymaker in the 1990s.

The phone company quietly notified firms that had expressed an interest in working with Pacific Bell to provide information services that it would not be running a scheduled market test in the San Francisco area next spring as previously announced. Pacific Bell said its market research indicated that the concept is premature.

"What we have is a sort of chicken-or-the-egg thing," said Keith Epstein, executive director of Pacific Bell's information services group. "What comes first: services to attract users or users to attract service providers?

"We concluded that at this time videotex could not be a commercial success," Epstein said.

Limited Tests Under Way

Pacific Bell in April announced the first market test of its proposed gateway service, called California Online, four days after winning federal approval to offer it.

The program was intended to encourage telephone customers to use computers at home or at work to hook up with information services provided over the telephone lines. Pacific Bell would connect callers to the services of their choice, making money by selling its network services to purveyors and through the increased calling by its customers. Other Baby Bell phone companies are developing similar plans, and several have limited tests under way, Epstein said.

For now, Pacific Bell has decided to focus on developing voice mail and voice messaging, which are types of electronic answering and message sending services. The company is testing voice mail on a local basis in two communities, the Los Angeles Harbor community of San Pedro and Milpitas in Silicon Valley.

"We remain committed to audiotex as a first form" of providing information services, Epstein said. Audiotex requires nothing more technologically intimidating than a touch-tone telephone, which chops up sound waves into computer-digestible digits.

So far, electronic information services have been most successful in the business market, led by such providers as Dow Jones News Retrieval, Knight-Ridder's Dialog and Vu/text, and Mead Data Central's Lexis/Nexis. Among other things, they provide corporate information, stock research and newspaper articles.

But consumer electronic information services provided by Times Mirror Co., parent of the Los Angeles Times, and Knight-Ridder have failed in recent years.

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