AT&T hits deck with Navy satellite project

AT&T has secured a prime piece of valuable real estate - deck space on more than 300 Navy ships for satellite dishes - with a morale and welfare pay phone system that gives the company a commanding lead for the delivery of official satellite service to the entire fleet according to industry and service sources.

Last month the Navy Exchange Command (Nexcom) gave AT&T the go-ahead to begin providing pay telephone services to sailors and Marines throughout the fleet under a project dubbed the Afloat Personal Telecommunications Service. APTS stems from an amendment to the Personal Telecommunications Services (PTS) contract originally let for ashore pay phone and private telephone services in enlisted and officer bachelor quarters.

APTS guarantees AT&T valuable deck "real estate" for installation of satellite antennas on small ships such as cruisers and destroyers possibly pre-empting competition for the Afloat Telecommunications Service (ATS) a program designed to provide official commercial satellite service to the same ships. ATS also will serve as a key component of the Navy's Information Technology for the 21st Century architecture.

It Makes Sense

The Navy has compelling reasons to steer the ATS business toward the APTS provider industry and service sources said. Due to the limited deck space on ships the Navy would like to use the same satellite terminals for personal and official communications. From the financial perspective it makes even more sense to use the same carrier for APTS and ATS because during the past three years carriers have installed the APTS terminals at no charge to the Navy with the charge for the personal phone calls paying for the terminals.

AT&T's competitors view the APTS/ATS situation with concern. MCI Sprint Communications Satellite Corp. and Cruise Phones International have provided pay phone service to a number of Navy ships under short-term contracts with Nexcom. Sprint one industry source said "invented this business and has invested millions of dollars."

Diana Gowen director of Defense sales and marketing at MCI Government Markets said that in her view Nexcom's extension of an ashore contract to APTS amounts to "out-of-scope modifications of the contract.... It leverages them for ATS. We are assessing the situation and could protest." A Sprint spokesman said "We have some concerns about this and we are looking at our options."

Because Nexcom operates as a nonappropriated funds activity this leaves Sprint and MCI with little legal recourse as Nexcom's legal status precludes a protest to the General Accounting Office meaning any challenge will have to go to federal court.

Nexcom in a prepared statement to FCW said the PTS contract with AT&T did include provisions for AT&T to offer pay phone services on ships adding that the deal with AT&T reduces "per-minute rates for smaller ships from $5.785 to $1 for ships deploying as part of a carrier battle group...or an amphibious ready group."

The Norfolk Va.-based USS Peleliu amphibious ready group is the first unit slated to receive the new APTS service Nexcom said.

Built-In Flexibility

The APTS agreement with AT&T also maintains a $1-per-minute rate on larger ships such as carriers Nexcom said and has built-in flexibility to provide service to vessels not deployed in either an amphibious or carrier battle group.

APTS also will allow sailors and Marines to use a pre-paid AT&T calling card on ships and ashore and it contains technology upgrades to increase the quality of service and lower per-minute costs.

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