Bypassing the local telephone company : The case of the electric utility industry

The local-loop bypass issue - where businesses with heavy local communication requirements establish their own exchange networks, bypassing the local telephone company - is well known and has major implications for local telephone operating companies (LOCs). Although cost is usually the primary reason in any bypass decision, other factors including specific service requirements play a significant role. This article describes the special service needs of electricity supply industries (ESIs) and some of the reasons for their desire to reduce their reliance on LOCs. The authors suggest that because of increasing competitive pressures, the information and communication needs of the ESIs will grow substantially, further reinforcing the desire for independent metropolitan area communication networks. A prototype of such a network, NetComm, is described.