GTE to Offer Internet Service Nationwide

Joining a stampede of major telephone companies into the burgeoning Internet business, GTE Corp. said Wednesday that it will begin offering Internet access services across much of the nation.

Stamford, Conn.-based GTE, the nation’s largest local phone service provider, said it will allow customers in more than 250 cities in 46 states to hook up to the Internet through an agreement with Uunet Technologies Inc., a leading Internet access provider. Terms of the deal were not disclosed.

GTE has already begun providing Internet access in the Dallas/Fort Worth, Minneapolis/St. Paul and Tampa areas through its own network. But it said the Uunet alliance will enable it to immediately begin rolling out Internet access services in all other markets it serves, without having to build its own network.

It will charge $19.95 a month for unlimited dial-up access and will allow its phone customers to have their Internet charges included on their monthly phone bills.

Until recently, the Internet access business was dominated by a few national providers such as Netcom and Uunet and a swarm of local mom-and-pop operators. But then online providers, including America Online and CompuServe, began to get into the game, and in recent months, a number of telecom giants--including AT&T; and Pacific Bell--have jumped into the business too. Many expect the phone companies to be the dominant players in the long run.

Uunet, based in Fairfax, Va., was acquired for $2 billion in May by MFS Communications Co., an upstart phone company that caters primarily to businesses. Uunet has also received backing from Microsoft Corp., which now owns 4% of MFS’ stock.

GTE spokesman Larry Cox said the Internet services will be marketed to business and individual customers in its local calling markets and in some cases outside its franchise areas. The phone company has been aggressively promoting its ability to “bundle” various services, including long-distance and cellular.

Cox added that GTE believes it can lure existing Internet users from other access providers, as well as convince some of its phone customers that “have been sitting on the fence” to venture into cyberspace.

But analysts said it remains to be seen whether GTE will be successful in the crowded market for Internet services.

Providing Internet access “makes strategic sense” for GTE, said analyst Scott Wright at Argus Research. But it’s “a pretty tough business” that requires a lot of customer handholding, he said.