Originally created 06/29/02

Phone contract has hang-ups



ATLANTA - Telephone users outside Atlanta could end up with better service as a result of a gigantic state government initiative, or they could end up with another utility as chaotic as natural gas.

Predictions vary depending on who's asked about a nearly $2 billion contract that gives one vendor responsibility for providing state government - and many local governments - with almost every electronic service available.

Just about anything with a wire is to be included - telephone, two-way radio, Internet, the public television network and computers. The contract requires that every corner of the state receive the same level of service that is offered in the most advanced Atlanta neighborhood.

Of the five bidders, only two submitted proposals. One of them is headed by WorldCom and the other by BellSouth.

Last week, the Georgia Technology Authority received boxes of documents detailing the bids, and since then 14 teams comprising 100 government employees have been combing through them to pick the winner. Until the state's chief information officer awards the contract, the Technology Authority is keeping the specific proposals secret while negotiating the final terms by pitting one bidder against the other.

Some observers say the whole exercise could be a waste of time if WorldCom files for bankruptcy, as many expect, or is disqualified because it is under federal investigation for suspicious accounting. That would leave only one bidder, headed by the phone company that already controls much of the most profitable aspect of the business - telecommunications service in the state's metro areas.

"We as an industry are very concerned about what ultimately is the disposition of WorldCom and that would affect WorldCom's status on the project," said John Silk, the executive vice president of the Georgia Telephone Association, a trade group of 31 small companies that serve the state's rural areas. "Can they or can they not perform?"

WorldCom spokeswoman Debbie Lewis said Friday not to fret.

"It's business as usual here at WorldCom. Our commitment to customers and prospects remains unwavering. We remain committed to winning the contract with the state of Georgia."

But the financial health of WorldCom isn't the only concern. Many legislators say privately they fear that depending on any one vendor for so many services could be as disastrous as efforts to deregulate the state's natural-gas market.