Utilities may hitch ride on data 'highway'

January 13, 1994|By Michael Dresser | Michael Dresser,Staff Writer

Amid all the talk about cable TV and telephone companies converging and competing, an important potential third force in the expected telecommunications free-for-all has been widely overlooked: your local electric power company.

But don't expect your stodgy utility to remain in the shadows for long. All across the country, electric power companies are itching to take a spin on the "information superhighway." And they'll probably get their chance.

In a major address on telecommunications policy Tuesday, Vice President Al Gore made it clear that the Clinton administration sees companies such as Baltimore Gas and Electric Co. as players in the deregulated video-telephone-data business of the 21st century.

"To take one example of what competition means," the vice president said, "cable companies, long-distance companies and electric utilities must be free to offer two-way communications and local telephone service."

Mr. Gore's words are important because he was articulating not just administration policy. He also was laying out an emerging government-industry consensus on the basic principles that will shape legislation under consideration in Congress to rewrite the rules for the nation's telecommunications industry.

This year, Congress is expected to pass legislation to replace the Communications Act of 1934, and one provision likely would strike down barriers preventing electric utilities and others from competing in the local telephone business in many states.

Does this mean it'll be the Chesapeake & Potomac Telephone Co. and BG&E duking it out for the right to provide your local telephone service? Will you be paying your phone bill and electric bill in the same envelope?

In the direct sense, probably not. George Dieter, BG&E's supervisor of telecommunications planning, admits his company knows next to nothing about running a public telephone network. "I don't think you're going to see BG&E competing head-to-head" with the telephone company, he said.

But Mr. Dieter said power companies still could play a big role in any showdown between local phone companies and future rivals, including other regional Bell companies.

"You may see some partnerships with utility companies and cable companies and even the local telephone companies," he said. "For someone like a BellSouth to come in and overbuild an existing infrastructure, that doesn't make much sense to them."

Asked whether BG&E would be interested in such a partnership, Mr. Dieter said it's something "we would take a serious look at."

In fact, BG&E would be a powerful joint venture partner for any future challenger to C&P, which will soon take the name of its parent Bell Atlantic Corp.

Electric utilities control extensive rights of way leading to virtually every home and business in America, and they have powerful reasons of their own for extending high-capacity cable into each neighborhood. Piggybacking telecommunications services on that network is hardly a stretch.

Many power companies, including BG&E, have extensive fiber-optic networks already in place. If you look at an electric transmission tower, you can see near the top, above the power lines themselves, a grounding wire whose purpose is to protect the network from lightning strikes. In many cases, that wire is hollow, and through it runs fiber-optic cable that the utilities use for their internal communications. BG&E has 236 miles of such cable, with 50 more to come this year, Mr. Dieter said.

Those fibers can do much more than just carry an electric company's own messages. A lot more.

Sean Stokes, staff counsel for the Utilities Telecommunications Council, said the power companies his group represents are eager to build out these networks because there's enough capacity in them to support a vast array of advanced energy-management services.

There would be plenty of room left over for voice, video and data transmissions. Even if they decided not to participate in a challenge to their local phone companies, electric utilities could lease that capacity to the Bells' rivals -- possibly MCI, which has announced plans to create its own nationwide network to offer local as well as long-distance service.

In turn, the utilities would welcome partners who would share the cost of building out their systems.

Dave Pacholczyk, a spokesman for Bell Atlantic, said his company is already viewing BG&E as a serious rival. Since 1991, BG&E has competed with C&P in the relatively small niche of connecting businesses to long-distance carriers.

Mr. Pacholczyk said Bell Atlantic is expecting more direct confrontations as regulatory barriers are lowered.

"If you look where they go and where we go, we go to the same place," Mr. Pacholczyk said. "Once you run fiber to a substation, how much more is it to run it out to a neighborhood?"

Mr. Pacholczyk said Bell Atlantic, which generally supports the thrust of the administration plan because it's eager to escape regulatory shackles of its own, has no objection to utilities offering phone service as long as "the playing field is level."

Whatever BG&E decides to do in the communications arena, Mr. Pacholczyk said, Bell Atlantic would not mount a counteroffensive. "I don't think we're going to buy any power plants," he said.

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