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Digital Access Cable, Press Release: 12/16/99
The Indianapolis Star
INDIANAPOLIS (Dec. 16, 1999) -- A Philadelphia company plans to offer one-stop shopping for local and long-distance telephone, digital television and high-speed Internet access in Indianapolis and three other cities next year. Digital Access Inc., a multimedia digital communications company, says it will spend $1.3 billion to build a digital fiber-optic broadband network in four markets starting in the first quarter of next year.
It hopes to go online in portions of the Indianapolis area and the other cities by the end of 2000. The other markets are Kansas City, Mo., Milwaukee and Nashville, Tenn. Digital Access services will be available to both business and residential customers. The company doesn't know yet which neighborhoods will get service first, and won't disclose specifics on pricing yet.
Costs will be "competitive with existing service providers," said Jay Side, vice president of Bachow & Associates Inc., the 15-year-old Philadelphia venture capital firm that founded Digital Access 16 months ago.
The company plans to hire 80 workers at its corporate headquarters, and another 300 in each of the four markets -- selected because no one else in those cities was building new networks for combined telecommunications services.
Digital Access joins Ameritech Corp. and Comcast Cablevision in racing to take advantage of the 1996 Telecommunications Act, which permitted telephone, cable and Internet-service providers to get into each other's businesses.
Comcast has already begun rolling out high-speed Internet access in its Marion and Hendricks county service areas. Subscribers to Comcast's full basic cable service ($35.50 a month) can add Internet service for another $39.95 per month, plus a one-time installation charge.
An Ameritech official said earlier this fall that Ameritech would begin offering its
telephone-system-based high-speed Internet access service, called ADSL (asynchronous
digital subscriber line), by March.
But so far, it appears Digital Access has taken the lead on offering the broadest range of services in one place.
"This is what Congress was hoping would happen when it passed the Telecommunications Act," said Herbert Terry, associate professor of telecommunications at Indiana University. "They wanted to foster growth of the information superhighway, putting more lanes on it and making it more competitive, but that process has moved slower than a lot of the act's supporters had hoped."
Digital Access' arrival should help consumers worried about competition in light of the recent $72 billion merger of Ameritech and SBC Communications, and a cable-system swap that will make Comcast the cable TV provider for all of Marion County, Terry said.
Local telecommunications companies, particularly Baby Bells, should meet any competitive threat with service enhancements, he said.
Digital Access hopes its newer infrastructure will give it an edge. "They'll be retrofitting old systems to offer new services, where we'll be building a brand new, modern system with virtually unlimited bandwidth for the applications of the future," Side said.
He also said Digital Access will provide better customer service than "monopolists who for so long haven't had to worry about their level of service".
Comcast said it will be able to compete with anyone who comes into the market, and noted that it has struck a partnership with AT&T Corp. to eventually offer some telephone services.
A timetable for rolling that out in Indianapolis hasn't been worked out yet, said Comcast spokesman Mark Apple.
Digital Access is a privately held company that has raised $450 million to finance its market entry. It plans to construct 15,000 miles of cable to serve 1.6 million customers initially before expanding into other markets.
The company says it still needs to raise $850 million for the venture, but doesn't anticipate trouble finding more investors.
Current investors include the California State Teachers Retirement Fund, Cornerstone Equity Investors, First Union Capital Partners and Fleet Equity Partners. "This is what Congress was hoping would happen when it passed the Telecommunications Act . . . but that process has moved slower than a lot of the act's supporters had hoped".
© 1999 Indiana Newspapers Inc. AP materials © 1999 Associated Press. All rights reserved.
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