SOUTHWESTERN BELL WILL STEP UP PACE ON FIBER OPTIC NETWORK

Southwestern Bell Telephone has proposed an $82 million fiber optic super highway for Missouri customers as part of a three-year, $153 million continuation of a network modernization/incentive regulation plan.

The company made the filing Oct. 1 with the Missouri Public Service Commission.

The new plan, called TeleFuture II, will provide a fiber optic network linking virtually every community in Missouri. The network would focus on schools and hospitals, providing new educational and health care services and opportunities.

In addition to fiber, the company would:

lower long distance rates.

freeze basic local rates for three years.

share profits with customers.

lower access charges.

increase the number of customers eligible for the Lifeline reduced phone rate program.

"We're stepping up the pace of telecommunications investments in Missouri," said Craig Felzien, community relations manager. "We propose to deliver in three years a network that holds tremendous growth potential for the state. Under normal circumstances, a fiber optic highway of this caliber might be a decade away."

Felzien said the company would have the incentive to speed up the deployment of fiber through a continuation of an incentive regulation experiment begun in 1990.

"It's a two-way street," he said. "Our company delivers a unique fiber backbone to Missouri schools and hospitals. In return for making that kind of investment, we receive some earnings flexibility that gives us the opportunity to earn well if we run our business right. Of course, we would also share profits with customers under this plan."

Under the existing incentive regulation plan, SWBT shared more than $44 million in profits with customers during the last two years. Felzien called TeleFuture II the logical extension of TeleFuture 2000, a three-year plan set to expire Dec. 31.

Felzien said TeleFuture II is a long-term comprehensive approach to telecommunications needs of customers and the state, and cautioned against a "quick fix."

"There are some people in the state who may devalue the importance or be unaware of the improvements we made under TeleFuture 2000 and would continue to make under our new proposal," he said.

"Others would have us make refunds and reduce rates instead of making improvements. In a sense, it's like a savings plan. Short-term options might look good, but it takes courage to save for the future. In this case the long-term investment has a higher payoff with multiple short-term dividends. We can make some rate reductions while keeping local rates steady and providing technology that will have lasting benefits."