PacBell Pulls Plug on O.C. Fiber Optic Network

Pacific Bell said Wednesday that it is halting work on an extensive fiber optic telephone network in Orange County that was to bring movies on demand, interactive news and home shopping to virtually every home in the county.

The move represents the latest piece to fall from an ambitious plan unveiled in 1993 to build a $16-billion fiber optic network linking millions of California residents by the end of the decade.

The project is still proceeding in Northern California and in San Diego, but work that had already been slowed in Orange County has now been stopped altogether. Pacific Bell, which was recently acquired by Texas-based SBC Communications Inc., pulled the plug on the Los Angeles component of its so-called Advanced Communications Network in January.

PacBell officials said the stoppage is temporary, but acknowledged there is no firm timetable to resume construction. Officials said there was not enough software and equipment available to sustain full-scale construction.

“It is evidence that this is a bigger, tougher, longer effort than originally projected,” said Steve Harris, vice president of broadband services for San Francisco-based Pacific Telesis, the parent company of PacBell.

The network, which was to replace existing copper wires with faster fiber optic lines, had reached about 85,000 homes in Orange County, mostly in the cities of Orange, Cypress and Villa Park.

Fred Maley, city manager of Villa Park, said the news came as a disappointment to residents who had relished the prospect of being one of the first communities to have access to technology that sounded so promising.

“Our city has been cooperating with Pacific Bell and we were looking forward to it,” Maley said. “We felt we were in a position to take advantage of it because of the affluence of the community and the large number of business owners and people interested in communications.”

Maley said he was told that PacBell might resume building in 12 to 18 months. But for now, the company’s workers are busy sealing off cables and filling in empty trenches at work sites sprinkled about the county.

About 160 PacBell employees in Orange County will be affected by the shutdown, but Harris said most will be offered positions elsewhere with the company.

Some analysts have speculated that PacBell’s retreat from fiber optic installation statewide reflects industry nervousness about spending millions to construct networks designed to carry interactive video and other services that might not be quite ready for mass markets.

But Harris said PacBell knew such services and programming might be slow to emerge when the company started constructing the network.

Others suggested that the acquisition by SBC might have played a role in PacBell’s latest decision. Pacific Bell has a reputation for spending liberally on new technologies, but SBC is known for being more cautious and tightfisted.

Brad Peery, an industry analyst in Mill Valley, said PacBell’s retreat could have been influenced by the fact that SBC is pursuing slightly different approaches in constructing its own fiber networks, and places a much greater emphasis on wireless services.

But Harris stressed that “this has nothing to do with SBC.”

PacBell has opted to continue installing its networks in San Jose and San Diego because the company faces stiffer competition from larger and more powerful cable television companies in those regions, Harris said.

The cable companies in Southern California are more fragmented, he said, and therefore don’t pose as immediate a threat in an age when telephone and cable companies are increasingly allowed to invade each others’ business.

Fiber optic networks may continue to emerge in Orange County as cities including Anaheim have said they are working with private telecommunications firms to build networks that the city could then lease to the highest bidders.

But PacBell’s pullout represents a dramatic retreat from a plan that had once promised to wire a number of Orange County cities by the end of the decade, including Anaheim, Buena Park, Cypress, Garden Grove, Orange, Stanton and Villa Park.

PacBell still plans to introduce a wireless television system in Orange County by early next year, Harris said. The service, in which signals will be broadcast from antennas on Modjeska Peak, will offer more than 100 channels of cable and off-air programming, including local news broadcasts that Satellite TV services don’t currently offer. The new service will cost about as much as regular cable subscriptions, Harris said.