Telcos dispute capacity-shortage claims on DTS-C

Although the Defense Information Systems Agency blamed an "industry shortage" for AT&T Government Markets' inability to meet schedule and technology requirements for a new domestic communications network rival vendors disagreed.

These firms also disputed statements by AT&T that it sought to but could not buy the capacity it needed from competitors to meet the schedule for the Defense Information Systems Network Transmission Services-Continental United States (DTS-C) network contract. DTS-C is intended to meet the wideband needs of all three military services well into the next century.

AT&T won the DTS-C contract in January 1997 with turn-on initially scheduled for June. But according to a knowledgeable Pentagon official "By early May AT&T was telling DISA it could not do the job on time." Industry and Pentagon officials attributed this situation to an overall corporate AT&T schedule in which the company will not finish the rollout of high-speed networks based on Synchronous Optical Network (Sonet) technology until late 1998. Sonet networks offer quick restoration of interrupted service.

DISA has now pushed full-scale installation of DTS-C back to June 1998.

AT&T Government Markets president Dick Lombardi who announced his resignation last month said his unit bid the networking proj-ect based on the assumption that its parent company was meeting a tighter schedule. "We received the appropriate levels of approval...and we thought we would have [a] Sonet [network] in place" to meet the terms of the contract.

Executives of competing companies said this statement does not square with comments by DISA and AT&T spokespersons pinning blame for AT&T's failure to perform on an "industry shortage" of Sonet circuits. "I bet that as part of the terms of its settlements with AT&T DISA agreed to blame the industry " said one industry executive who added "I bet it's included in the legal papers."

Sprint which vigorously pursued DTS-C only to lose to AT&T found it ironic that industry at large has been blamed for problems with that contract.

"I lose and it's still my fault " said Bill Brougham director of the Defense program office at Sprint. "But I don't think there is an industry shortage and we are still prepared to help DISA if they call on us."

Was Unrealistic Pricing to Blame?

Unrealistic pricing Brougham said lies at the heart of the DTS-C problems. "It is clear that at the price we bid we could have delivered...and it's clear at the lower price they bid they can't deliver."

Brougham added that Sprint was at least two years ahead of its rivals with the installation of its Sonet network and would soon have even more capacity thanks to the incorporation of multiplexing technology into its Sonet backbone. Brougham also said Sprint stands ready to hold discussions with either AT&T or DISA on how Sprint could use its network to help resolve the problems with DTS-C.

Jim McKenna vice president of government services for Worldcom Inc. said his company does have some Sonet capacity to spare in the Southeastern United States - home to many military bases. But he added that "AT&T could not obtain [Sonet capacity] from us at the rates they bid on DISN."

Diana Gowen director of Defense Department sales and marketing at MCI Government Markets said her firm also could not match AT&T's pricing adding that MCI stands ready to help AT&T and DISA.

One network executive familiar with AT&T's efforts to acquire additional circuits in the market said the capacity that the company sought "was so large as to be laughable. They wanted to acquire 300 DS-3s [each of which is equal to 28 T-1 circuits].... That's just off the wall. We don't have that kind of capacity to spare."

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