MCI will offer phone services on cable networks

November 23, 1993|By Bloomberg Business News

WASHINGTON -- MCI Communications Corp., Jones Lightwave Inc., Jones Intercable Inc. and Scientific Atlanta Inc. said yesterday that they would offer phone services over cable networks for the first time, beginning in March.

The service would initially be offered on a trial basis. If successful, it could mean big savings for MCI and less revenue for the seven regional Bell operating companies.

MCI, Jones Lightwave and Jones Intercable plan to use broadband cable television networks to provide phone services in Alexandria, Va., and a Chicago suburb. In Virginia, the companies would compete against Bell Atlantic Corp. In Chicago, they would compete against Ameritech Corp.

The test marked the first time a long-distance phone company has set up a trial to complete its phone calls over a cable network. It was another sign that the seven regional Bell operating companies face increased competition in the local phone market from cable companies and other alternative access providers.

By completing long-distance calls over a cable network, MCI hopes to lower the $5 billion it pays annually to the Baby Bells to complete its calls.

"Throughout the last five years, the cable infrastructure in the U.S. has been transformed into a high-quality, high-capacity information delivery system," said Jim Krejci, president of Jones Lightwave.

Bell Atlantic is also testing a system that would offer interactive television services over its network in Alexandria.

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