California Fiber Optic Scandal, Part 1 1993-1998

Year by Year: A Plan that Failed
(A timeline of Pacific Bell’s California First plan.)

San Diego Union Tribune, Feb. 1, 1998, Page I-1.

  • November 1993: Pacific Bell unveils plans to spend $16 billion over seven years to upgrade its California network to handle interactive services like home shopping and compete against cable companies with video channels and movies-on-demand.
  • (NNI NOTE: By 2000, 6 million households were originally announced; changed to 5.5 million.)
  • May 1994: PacBell begins network construction in Pacific Beach and Mira Mesa in San Diego. Construction also begins in San Jose and in Orange and Los Angeles counties.
  • October 1994: City of San Diego considers proposal to require that Pacific Bell pay franchise fees and abide by other requirements imposed on cable companies if it gets into the video business.
  • October 1994: Pacific Telesis, Bell Atlantic Corp. and Nynex Corp. form Tele-TV, a joint venture to provide the companies with video programming, entertainment and information to sell to residents.
  • January 1995: PacBell and city of San Diego sign “landmark” agreement, with PacBell pledging to give the city 5 percent of gross revenues from voice, video and data services sold over new network. City agrees not to regulate PacBell as a cable company.
  • April 1995: PacBell buys Cross Country Wireless Inc. and announces plans to offer “wireless cable” service to 5 million-customer service area covering San Diego, Riverside, Los Angeles and Orange counties.
  • NNI UPDATE: September 1995: Alternate Regulation is granted to Pacific Bell.
  • September 1995: PacBell slows network construction to save $1 billion in capital costs over five years for statewide project, but accelerates network construction in the San Francisco Bay Area.
  • January 1996: PacBell halts fiber/coaxial network construction in Los Angeles County. Network projects continue in San Diego, San Jose and Orange County (briefly).
  • April 1996: SBC Communications of Texas signs deal to buy Pacific Telesis.
  • May 1996: Network construction halted in Orange County.
  • June 1996: San Jose City Council awards PacBell a cable franchise, giving the company official standing as cable operator.
  • September 1996: PacBell begins selling video service in San Jose over its new network.
  • April 1997: SBC’s purchase of Pacific Telesis becomes final.
  • April 1997: Tele-TV, jointly owned by Bell Atlantic Corp., Nynex Corp. and Pacific Telesis Group, cuts staff in half and abandons all joint video projects in favor of individual company efforts.
  • May 1997: PacBell launches ‘wireless cable’ service in Los Angeles and Orange counties.
  • June 1997: SBC abandons almost all attempts to compete with cable, announcing immediate ends to Pac Bell’s video network project as well as a smaller test in Texas. The decision halts construction in San Diego and pulls the plug on 8,000 PacBell cable customers in San Jose. ( SBC writes off $500 million investment in both ventures.
  • November 1997: PacBell sends out requests for bids on various components of the partially built video network.
  • NNI UPDATE: July 2001: The California ISP Association files formal complaint about discriminatory behavior.

Source: “PacBell’s video bid proving more costly,” Elizabeth Douglass,San Diego Union Tribune, Feb. 1, 1998, Page I-1.