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TCI, AT&T merger will bring more services

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by Karen E. Culp

SBJ Staff

TCI of Springfield would not have been in the switched telephone service business soon, and might not have been at all, but for an impending merger with AT&T, said TCI of Springfield General Manager Ross Summers.

"We don't have the resources right now to get into switched service. And even though there had been a lot of conversation in our corporation about getting into that industry, it would have been quite some time before we would have been there," Summers said.

Now, the coming merger could give customers a "serious choice" in their telephone service.

"This will be serious competition for the regional providers, because what AT&T is buying is access to homes. What many of the local competitors in the Springfield market have targeted is the business customer. AT&T will be gaining access to each person's home who has our wire going in," Summers said.

The merger of the two corporations is subject to federal approval and approval by each company's board of directors, but Summers said TCI is not anticipating any obstacles to the deal.

"One of our company officials called it a consumer-friendly merger, and we expect that it will be viewed that way," Summers said.

The deal, which should be completed by the end of the first quarter of 1999, will form a new company, which will comprise TCI's cable business, along with AT&T's wireless service, local telephony and high-speed Internet access services, Summers said.

The new division, called AT&T Consumer Products, will "have its own stock and be a totally new company," Summers said.

The compatibility of technology between the two companies is an area that has yet to be fully explored, Summers said, but it is one that will be of concern both locally and nationally.

"We're in a pretty good position here because of the amount of cable plant we have and the bandwidth we have available. We're one of the more sophisticated systems within TCI for a market our size," Summers said.

Springfield's TCI system has about 1,100 miles of total cable plant, about 350 miles of which is fiber-optic cable, Summers said.

"Instead of ringing the city like some other systems, our cable goes deep into neighborhoods," Summers said.

For the cable company, the coming merger represents the first opportunity for it to get outside the video entertainment business.

"We've stuck with our core business for so long, even when others in the communication business were expanding rapidly. This will be our chance to get into something totally new," Summers said.

The company has expanded its business somewhat with the advent of digital cable.

Springfield was the first market in its TCI region to offer the digital service, which provides more channels by reducing the amount of bandwidth necessary to carry a channel via digital compression.

"Normally, an analog channel takes up six megahertz of bandwidth. With digital's technology, you can put about 12 channels into that same space," Summers said.

Though the Springfield franchise hopes to have about 15 percent of its total customer base as digital customers by the end of this year, the company will not replace its analog channels with digital or convert the entire system, Summers said.

"The analog side will continue to be our core business," he said.

The merger should not affect the local service, either, at least not in the very beginning.

"What it will eventually do is allow local customers to get a variety of services cable, telephone, Internet and write one check to one company for all of it," Summers said.

For now, TCI continues to promote digital cable, and it will be trying out yet another service on its customers by the middle of 1999: high-speed Internet service through cable. Right now, TCI of Springfield is devoting $3.5 million to the rebuilding of its system to accommodate the addition of Internet service.

"People who have regular Internet access through a phone line now will be stunned at how fast this is," Summers said.

The company expects to roll out the service gradually and expects to have it available in the spring of 1999.

The Internet service will allow customers access through their television cable, which will be split to the modem. The customer will have to purchase a special modem, and a card will be installed in his or her computer, Summers said.

Summers said he expected the merger to accelerate TCI of Springfield's new developments, such as digital cable and Internet service.

"We really expect to expand our digital service as a result of the merger. We see it as very positive for our service in Springfield," he said.

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