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Fiber-Optic Ring Planned for San Diego : Communications: Time Warner's 60-mile cable would enable businesses to circumvent Pacific Bell's network.

June 25, 1993|From Associated Press

SAN DIEGO — Time Warner Inc. said it plans to build a 60-mile ring of fiber-optic cable through San Diego's downtown and northern communities to enable businesses to circumvent a local telephone network.

Time Warner, the largest media conglomerate in the country, focusing on entertainment, cable and publishing, said Wednesday that the fiber-optic network would be completed by 1994 and be ready to serve area businesses by early 1995.

The move would put Time Warner in direct competition with Pacific Telesis Group's Pacific Bell unit for business customers. The proposal still must be approved by the state Public Utilities Commission.

The company's multimillion-dollar fiber-optic ring, called AxS, initially would allow businesses to connect long-distance telephone carriers, bypassing Pacific Bell's local telephone network.

Because the fiber-optic ring would offer high-volume capacity without charging fees for access to the local phone network, Time Warner would be able to undercut prices charged by Pacific Bell.

The phone company's rates are higher than those charged by companies such as Time Warner because Pacific Bell charges help subsidize residential rates, said Mike Miller, a Pacific Bell vice president.

"There's nothing new that they are doing as far as technology," Miller said. "What they are touting is price."

However, that could change if state and federal regulators allow local phone companies to reduce subsidies to home phone service and be more flexible in pricing other telecommunications services.

Time Warner already offers local connections to long-distance carriers in Indianapolis and Kansas City. Last month, the company announced the purchase of a 50% stake in Metrocom in Columbus, Ohio, a venture that provides local long-distance connections. Time Warner is also in a joint venture that provides similar services in Charlotte, N.C.

Many of the major cable television companies have targeted telecommunications as a potentially lucrative market and are seeking to compete with local phone companies. Time Warner, for example, has estimated that local long-distance connections nationwide generate annual revenue of $28 billion, $8 billion more than total revenue for the cable TV industry.

Time Warner also said it plans to use the new fiber-optic network to improve its local Southwestern Cable TV system by bringing hundreds of TV channels, interactive services and video telephones to San Diego customers.

Long-distance calls, video conferences, high-speed computer data, electronic mail and credit card transactions are some of the services to be available from Time Warner, said Dan Ballister, Southwestern Cable spokesman.

Fiber-optic cables are made of thin strands of glass and have a much greater capacity than traditional phone wires because voice, video and data are converted into laser light and flashed down the strands. Taking up less space than a residential phone line, a fiber-optic line can carry a thousandfold more information.

While Time Warner is the first company to announce plans to bypass Pacific Bell, another firm is already building a large fiber-optic cable network in San Diego. Teleport Communications Group, which is owned by cable companies Cox Communications and Tele-Communications Inc., is building a fiber-optic loop in the city.

Teleport already operates fiber-optic systems in Los Angeles, San Francisco and New York.

US West, a phone company, has announced plans to contribute $1 billion toward installing fiber-optic networks in Time Warner's franchise areas, including San Diego.

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