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BC-PHONE
By DAVID BURNHAM
. 1980 N.Y. Times News Service
    WASHINGTON - A few months ago, several dozen families and a handful
of businesses in Albany, N.Y., were given an experimental telephone
device that allowed them to obtain in seconds, on a video screen, the
telephone number of any of the area's 400,000 subscribers without
leafing through 40 telephone books or dialing information.
    In the next few weeks, 150 families in Coral Gables, Fla., will be
given a somewhat similar device that will allow them to scan a list
of movies playing at local theaters, check the current arrival and
departure schedule of Eastern Air Lines, undertake certain banking
chores and order meals to be delivered to their homes by a catering
service.
    In the two experiments, a conventional telephone becomes part of a
''teleprocessor,'' including an electronic typewriter keyboard and a
video screen similar to that of a televison. The tests llustrate the
variety of services that current technology can carry into the home
and suggest the profound changes that may occur in the work and play
patterns of millions of Americans.
    The experiments demonstrate that The American Telephone & Telegraph
Co. is actively trying to prepare the kind of economic blueprint that
would mean the growth of teleprocessors from an interesting oddity to
an essential part of America's communications system.
    ''There's no question these services are coming into the home,''
said Henry Geller, director of the National Telecommunications and
Information Administration. ''The only question is how long it will
take the market to find a way to pay for them.''
    Larry F. Darby, a private consultant who formerly headed the office
in the Federal Communications Commission that specializes in
regulating the telephone industry, said he believed the possible
savings involved in replacing telephone books and operators with
teleprocessors could be the key to widespread commercial development
of the machines.
    ''Very clearly a decision by AT&T to change their basic directory
service policy would precipitate a rapid growth in the deployment of
home terminals,'' Darby said.
    Harry M. Shoosham 3d, the general counsel of the communications
subcommittee of the House Interstate and Foreign Commerce Committee,
agreed. ''A real interest on the part of AT&T in teleprocessors could
be the breakthrough in their marketing,'' he said.
    Although AT&T has not published an analysis of the economic
advantages and disadvantages of replacing existing directory services
with home terminals, the French government has concluded that with
the installation of such equipment, ''a saving will be achieved after
a few years in relation to the present system.''
    The French are sufficiently confident of the prediction that they
plan to have a full-scale test of the electronic directory service
with 270,000 subscribers in 1982.
    The annual costs of providing around-the-clock operators and of
printing telephone books are considerable. A spokesman for AT&T said
that total directory service costs now come to about $2 billion a
year, after accounting for revenue generated by Yellow Pages
advertising.
    AT&T, however, is not prepared to initiate a major revolution in
telephone equipment without a great deal more research on the design
of terminals and the public's response to them.
    ''There were many positive comments and some criticism from the 75
families and eight or nine businesses that used the equipment to look
up numbers from August to January in Albany,'' said Edward
Hancharick, head of directory services for the Bell System. ''We are
planning another trial - with a much larger sample of subscribers -
sometime in 1981.''
    
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n011  0738  28 Apr 80
 
BC-PHONES addatend
NYT WASHINGTON: in 1981.''
    Recent regulatory, technical and economic developments have
encouraged some communications experts to believe that the equipment
may soon move out of the experimental stage.
    Earlier this month, for example, the FCC voted to authorize a
sweeping deregulation of the telecommunications industry, in essence
doing away with the legal distinction between communications and data
processing. This dsion is ultimately expected to increase to a
great extent the competitive pressure to provide r services
that customers would use through their home teleprocessors.
    A second development expected to encourage the commercial growth of
home teleprocessors is an anticipated decline in the cost of
manufacturing a voice and data communications system that transmits
large amounts of information with pulses of light carried by thin
strands of glass.
    With AT&T's announcement a few months ago that it would soon install
such a ''fiber optics'' communication link between Boston and
Washington, the cost of the new material will almost certainly
decline.
    ''It is highly likely that one day the drop cable going into
individual homes will be glass rather than copper,'' said J. S. Mayo,
the executive vice president for network services at Bell
Laboratories, the research arm of AT&T. ''When we get to that point,
we will be able to deliver to the home all the information services
that a family could possibly use.''
    The increasing cost of oil might prove to be a long-term trend
favoring the development of home teleprocessors; the more the costs
of driving or flying increase, the more attractive the economic
advantages of using the telephone system for banking, shopping and
distant business meetings might become.
    Darby, the former FCC official, explained in an interview that
economic factors now have teleprocessor use in ''a holding pattern,''
though the technology is available.
    ''We have a kind of chicken and the egg problem,'' he said. ''As
long as there are not a large number of teleprocessors, it doesn't
make economic sense to develop the communication links and data bases
they would be hooked to. And as long as the communication links and
data bases aren't developed, it doesn't make economic sense to try to
install the terminals.''
    But Darby, Shooshan and a number of other experts agreed that home
terminals would burgeon if teleprocessors proved to be economical to
AT&T and if commercial customers such as airlines, home security
companies, bookstores and travel agents could also use the same
equipment.
    The teleprocessor experiment in Coral Gables, Fla., co-sponsored by
Knight-Ridder Newspapers and Southern Bell, a subsidiary of AT&T, is
one indication of the increasing interest in home terminals by
American businesses.
    Jan Loeber, director of business marketing for AT&T, said in an
interview that corporations across the country, which have already
computerized virtually all of their internal operations, ''are now
begining to see the advantage of providing the public access to
portions of their data base.''
    He said that large retailers, for example, were interested in
developing a terminal that ''would enable them to display their sales
catalogue on a video screen and then write out their orders for their
purchases; I think some businesses may be willing to underwrite part
of the costs for such terminals.''
    In addition to handling such information-gathering chores,
teleprocessors could conceivably permit many kinds of officials,
professionals and business executives to work at home and might also
provide a source of entertainment.
    G.D. Bergland, an official in the Digital Systems Research
Department of Bell Laboratories, said he foresaw the day when four
individuals in different parts of a city or country would be able to
play bridge from their separate homes.
    ''Entertainment is one of the most likely reasons famerminals in the first -
place,'' Bergland wrote in a
recent article on the future of such equipment.
    
    
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