For the better part of one day in July and again in November,
thousands of people in the San Francisco Bay area weren't able to
complete an everyday task: make a phone call.
The reason, Pacific Bell says, is the Internet. The company says
Internet congestion has forced it to put 22 of its 650 central
offices in California under watch and has left customers facing
fast-busy signals or dead air when they pick up their phones.
California leads the rest of the nation in home-computer and
Internet use - more than a third of the world's Internet traffic
begins or ends in the state. But similar problems are starting to
crop up elsewhere in the US.
The underlying problem is that today's telephone network is
engineered to carry short voice calls, not long data
communications. Upgrading this network will cost billions of
dollars. And neither the local telephone companies nor Internet
access firms are particularly eager to foot the bill.
As early as today, the federal government is expected to
announce whether it will consider the investment issue. Local
telephone companies hope to get federal permission to slap a
controversial access fee on companies that offer Internet access.
If they win, consumers will likely end up paying more for Internet
Even if the phone companies lose, the days of a flat $19.95
monthly charge for unlimited Internet use may be near an end. Most
publicly traded on-line companies, which offer the flat rate, are
losing money. Two pulled out of the consumer Internet business
altogether earlier this year. Last week, industry leader Netcom
announced it too was discontinuing its popular $19.95 service to
concentrate on the business market.
"Somehow, we have to get the Internet on a sound economic
footing," says Jim Diestel of Pacific Bell. "A flat rate by itself
isn't bad. But at $19.95, I'm not sure it makes sense."
Up to now, computer users have gotten an extraordinary deal. Not
only could they use the Internet as much as they wanted for one
flat fee, most of them could also connect to it via a local call.
Typically for local calls, telephone companies charge by the
call, not by the minute. That means the Internet user can stay
connected to the computer network for hours and pay the phone
company no more than someone making a 10-second call.
That poses a challenge for a local phone company like Pacific
Bell. It built its network to handle voice calls, which average
three to four minutes. But the company has found the average
Internet calls lasts 28 minutes. And with an increasing number of
customers going on-line, the traffic is starting to choke the
Another stumbling block in networks' attempts to adjust to the
new demands, is that Internet users are changing local calling
patterns. In a study of nine of its central offices in the
Washington, D.C., area earlier this year, Bell Atlantic found that
the presence of an Internet-access company could change peak
calling periods from the afternoon (which is traditional) to the