FTS' claim may not ring true
The FTS 2000 contracts supposedly drove down the cost of agencies' long-haul telecommunications by about 85 percent. So, just how much of a bargain is a long-distance call? The rock-bottom price quoted by former Federal Technology Service commissioner Robert J. Woods was 2 cents per minute. That figure was quoted again in March by present commissioner Dennis J. Fischer at the FTS users' forum in Atlanta, for calls from one government user to another on
The FTS 2000 contracts supposedly drove down the cost of agencies' long-haul
telecommunications by about 85 percent.
So, just how much of a bargain is a long-distance call?
The rock-bottom price quoted by former Federal Technology Service commissioner Robert
J. Woods was 2 cents per minute. That figure was quoted again in March by present
commissioner Dennis J. Fischer at the FTS users' forum in Atlanta, for calls from one
government user to another on the same network.
That is a bargain, even for a program that buys 6 billion minutes of voice service a
year, not counting another 2.5 billion minutes of toll-free service.
But Jim Payne, assistant vice president at Sprint Corp., whose Network B carries about
20 percent of FTS 2000 traffic, said he was taken aback by the quoted price.
"I challenge you to have anyone at FTS show you an invoice where the bill divided
by the number of minutes comes out to 2 cents a minute," he said.
Payne said he thought the lowest rate under the contract was 412 cents to 5 cents
per minute. He said he suspects that when agencies start comparing prices under new
contracts when FTS 2000 expires this year, they will want to know where their
2-cent-a-minute rates have gone.
"We're going to have to tell them, 'You never paid 2 cents a minute,' " Payne
said.
John Doherty, vice president for government markets at AT&T Corp., which has about
80 percent of FTS 2000 business, said he is not sure what the price is.
"There are so many call types," he said. "There are rates that are very
competitive. Whether they are 2 cents a minute, I can't say."
So, is the government getting 2-cents-a-minute rates? Yes, sort of.
"I did some analysis," said deputy FTS commissioner Sandra N. Bates. For the
fiscal year that began last October, "our on-net to on-net nationwide average for
plain-vanilla calls is running about 2.1 cents per minute" between locations where
high volume has optimized the charges, she said.
Getting that rate, however, is like going into a Baskin-Robbins store and buying a
single scoop of plain-vanilla ice cream. It almost never happens. By the time a customer
adds a scoop of Rocky Road, sprinkles and chocolate sauce--or 800 service, call redirect
and other services--the price climbs significantly.
The bills, added up, "don't come close to 2 cents a minute," Bates said.
"You're not going to be making plain-vanilla calls between just those
locations."
She defended the quoted low rate, saying, "It's not everywhere, but it's a
fact."
Payne said he fears FTS will use the publicized rate to squeeze telecommunications
providers in future contract negotiations.
"I think they're using it to leverage the vendors," he said. "It's going
to be a public relations nightmare."
NEXT STORY: NIH opens a bandwidth closet