Pilot would let 10 states use net

Rep. Carolyn Maloney (D-N.Y.) this month presented draft legislation to officials at the General Services Administration's Federal Telecommunications Service that would establish a pilot project allowing up to 10 state governments to use the agency's FTS 2000 long-distance network.

At a hearing on GSA's Post-FTS 2000 program held this month by the House Government Reform and Oversight Committee Maloney asked FTS commissioner Bob Woods to provide data and feedback on her draft legislation. Woods agreed and he told Maloney that his office has been deluged with requests from state and local governments asking to take advantage of the discounted rates offered by FTS 2000.

Woods said GSA has not offered service to states because of contract provisions that prohibit users other than those in federal or quasi-federal agencies Native American tribal councils or the government of the District of Columbia. He said the contracts for FTS 2001 the federal government's next-generation long-distance network will allow state and local users to participate. FTS 2001 is scheduled to be awarded in the first quarter of 1998. Woods said in an interview that he thought Maloney's proposal is "a good way to do it. Piloting can help us find out if states really want it. And it would give us a chance to wade in instead of being thrown in the middle of 50 states."

A Similar Scenario

A member of Maloney's staff said the legislation is almost identical to a proposal last year by Sen. Fred Thompson (R-Tenn.) who is now chairman of the Senate Governmental Affairs Committee.

Thompson's amendment shelved before the Senate voted on it also called for a pilot test involving 10 states - provided that the states paid all access costs and the GSA administrator deemed the states' participation if the federal government benefited from the change.

It is unclear how much the governments could save if FTS 2000 was opened. "The reason we are proposing a pilot project is because we're not exactly sure what the benefits could be " the staff member said.

But states could benefit from the low rates offered through FTS 2000 and the government might benefit as well by increasing usage of the network to obtain even greater volume discounts.

Warren Suss president of telecom consulting firm Warren H. Suss Associates said he believes the proposal would benefit federal and state governments especially when applied to areas in which the governments' functions overlap. "The federal government is using its leverage to get a good deal on FTS 2000 and there is no reason why the states shouldn't be able to benefit from that aggregation of use " Suss said. "It would be a good deal for state and federal users because the more usage there is the more leverage the government has in terms of improving prices and technology."

He said industry reaction to the proposal may be mixed. "In many cases telecommunications companies are not structured to sell federal and state services from the same group " Suss said. "There may be some turf issues. The federal marketing groups probably will be quite supportive but some of the groups responsible for state and local marketing may say this represents an incursion into their turf."

Officials from the federal marketing divisions of FTS 2000 contractors AT&T and Sprint said they would welcome state and local business.

John Doherty AT&T's vice president for FTS 2000 and civilian markets said several state governments including California Maryland and Tennessee have asked to participate in the GSA program. But he said he thinks state government could cut good deals for long-distance service without piggybacking onto FTS 2000.

"Some of these states are fairly large in terms of what they spend on telecommunications " Doherty said. "I don't think they need FTS 2000 but it should be made available to them."


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