FTS 2001 vendors meet with federal users

KANSAS CITY, Mo.—Against a Star Wars-esque background of flashing lights, FTS 2001
contractors Sprint Corp. and MCI WorldCom Inc. last week pitched their competing
high-bandwidth network services at the annual Federal Technology Service users conference.

Both vendors will have to wait until they are allowed to enter local telephone markets
before they can offer full end-to-end voice and data services.

In the meantime, they are marketing long-haul service to agencies that must leave their
FTS 2000 extension contracts by the end of next year.

This year’s conference was the first hosted jointly by the new FTS 2001
contractors. Their vanquished rival, FTS 2000 contractor AT&T Corp., took advantage of
the occasion to woo undecided agencies with bone-deep discounts.

AT&T has “an important role in the transition and an important role in the
marketplace,” FTS commissioner Dennis J. Fischer said.

Sprint and MCI WorldCom won their FTS 2001 contracts by slashing voice rates to a penny
per minute or less over the eight-year life of the program.

AT&T is striking back with discounts as high as 25 percent to FTS 2000 customers
that choose to stay with the carrier, and discounts of 50 percent to 65 percent for users
that switch to it.

Because the FTS 2001 program has guaranteed its vendors a minimum of $1.5 billion in
revenue, AT&T’s refusal to give up without a fight is putting pressure on
Fischer’s office to market Sprint and MCI WorldCom services more aggressively.

“Our single, primary objective is to grow business,” Fischer said, by
“fair but ruthless competition.”

FTS 2001’s shiny new vehicles for luring federal customers are the Sprint
Integrated On-demand Network, or ION, announced last summer, and MCI WorldCom’s
On-Net global services.

ION uses a customer-premises integrated services hub to merge voice and data traffic
into a single high-speed data stream, regardless of the protocols involved. ION gives
great flexibility to the user, but it is not yet available on FTS 2001.

Jim Payne, Sprint’s assistant vice president for FTS programs, said ION would be
added to the contract as soon as the government asks for it. But ION cannot supply local
voice service in all markets for at least a year.

FTS’ competitive Metropolitan Area Acquisitions of local telephone service will
let the FTS 2001 vendors compete for local service, but not in the first year.

The initial MAAs for New York, Chicago and San Francisco are scheduled for award this
month, and a second group is to follow soon after. Sprint cannot offer local service in
the three markets before May 2000.

MCI WorldCom already provides local service in 89 metropolitan areas. It has a network
of dedicated, wired buildings, and it plans to market digital subscriber line service
through On-Net.

The On-Net portfolio of integrated services permits end-to-end management worldwide.
MCI WorldCom already counts among its managed sites the Federal Aviation
Administration’s air traffic control network and the Postal Service’s national
intranet, said Jerry Edgerton, senior vice president for government markets.  

About the Author

William Jackson is a Maryland-based freelance writer.


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