Digital Phone Service Is Next Step Along Information Highway

HIGH-TECH TELEPHONE

THE United States will soon have access to a new, digital telephone service. This service will start showing up in the office and eventually, its proponents hope, in the home. They call it the next step toward wiring up America to the information superhighway.

The new service is called ISDN (Integrated Services Digital Network). By the end of this year, two-thirds of the nation's largest telephone companies' access lines will be equipped with ISDN. By the end of next year, ISDN will be available on three-fourths of their lines.

Even these estimates - released Monday by the industry consortium Bellcore - are probably too conservative, says Bellcore spokeswoman Barbara Kaufman. The regional Bell companies ``are looking to make ISDN even more available.''

Several industry and independent analysts agree. ``The Year of ISDN is upon us - 1994, or maybe 1995,'' writes InfoWorld publisher Bob Metcalfe in the computer-industry weekly. ``Up to now, ISDN has been driven by the telephone companies, but now it is the PC industry's turn to steer....''

``This is the year you're going to see a much wider deployment of ISDN and much greater availability of equipment,'' adds Leslie Collica, chairman of the North American ISDN Users' Forum.

ISDN allows the copper wires that link most home and office telephones to send and receive digital data. It may not improve voice calls much, but it will speed up data communications. Instead of 20 seconds to fax a page of text, an ISDN line will do it in two seconds. Instead of minutes to send electronic documents over a high-speed modem, ISDN will handle it in seconds. And with one ISDN phone call, two users will be able to hook up their computers and together edit a document on their screens while talking back and forth.

`ISDN is not pie-in-the-sky, it's available right now with current technology,'' says Henry Walker, general counsel for the Tennessee Public Service Commission. This week Tennessee is expected to sign an order setting what may turn out to be the lowest ISDN rates in the country. ``We really are trying to make ISDN the new POTS.''

POTS is industry lingo for Plain Old Telephone Service - the service most Americans have today. By aggressively pricing ISDN service, Tennessee hopes to lure many home and office users. Currently, a POTS line for a Nashville home costs $12.15, plus the mandatory $3.50 federal charge, as well as options of $1.50 for touch-tone and $6 for caller ID - a monthly total of $23.15. For an extra $6.35 a month, a Nashville home could get ISDN service, which includes all those services, and a capacity that is equal to two regular phone lines and a third data line. In both cases, all local calls are free.

Pacific Bell has proposed to California regulators a basic ISDN rate of $27.95 for the home in which the first $20 of local calls would be free. Pacific Bell, Bell Atlantic, and Ameritech are the most aggressive ISDN promoters among the regional Bell companies. All three plan to have more than 80 percent of their access lines hooked up by the end of 1995, the Bellcore report says.

Although service costs are dropping, ISDN hardware remains out of reach for most consumers. An ISDN phone can cost anywhere from $500 to $1,500, says Kathie Blankenship, director of switched digital services for Pacific Bell. The adapter needed to hook up the phone can cost an extra $150. Such costs may prevent ISDN from taking off right away, one analyst says.

ISDN advocates expect prices to drop rapidly when businesses begin to buy the hardware. Already, computer companies such as IBM are making ISDN-related equipment. Intel Corporation last week announced it was working with several telecommunications and other companies to create specifications for ISDN video-conferencing with desktop computers.