Tech Giants Push Net Phone System

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The Gate

Tuesday, March 12, 1996 · Page C1
© 1996 San Francisco Chronicle

Tech Giants Push Net Phone System

David Einstein, Chronicle Staff Writer

Microsoft and Intel, the twin towers of the personal computing industry, are teaming up to turn the Internet into a telephone system.

The software giant and the leading maker of personal computer chips said yesterday they are developing a common platform that will let different kinds of computer systems communicate over the Internet. They said more than 100 computer, software, telecommunications and Internet companies have endorsed the effort.

In addition to telephone calls, the new technology could be used for video conferencing and sharing multimedia. It also might finally pave the way for personal video phones, which have been talked about for years.

Using the Internet as a communications tool, a consumer browsing a catalog on the World Wide Web could click a button and talk directly to a salesperson. Students could ``attend'' classes via computer. Or colleagues on opposite coasts could collaborate on a project, sharing documents and exchanging ideas.

``This new implementation will make the Internet as crucial for daily communications as the telephone, but far more powerful,'' said Paul Maritz, group vice president of platforms at Redmond, Wash.-based Microsoft.

Long-distance telephone companies are understandably wary of the prospect of the Internet turning into a virtual phone system. That's because telephone calls over the Net -- even long-distance calls -- are essentially free. The only costs are the connection to the Internet, and any local phone charges.

Software already is available for making phone calls via the Internet (see related story C4). But parties at both ends must have the same software installed on their computers for it to work.

Maritz said the Microsoft-Intel standard will give the Internet the same sort of compatibility that has made telephone systems work together.

Last week, America's Carriers Telecommunications Association, a group of small long-distance companies, asked the Federal Communications Commission to regulate long-distance calls on the Internet.

``It is not in the public interest to permit long-distance service to be given away, depriving those who must maintain the telecommunications infrastructure of the revenue to do so . . .,'' the ACTA said.

Intel and Microsoft see it differently. ``We think the telephone companies actually have a great opportunity to provide value added services,'' said Sandra Morris, director of Internet and multimedia marketing at Intel, which is based in Santa Clara.

She said such services might include reserving bandwidth for a company using the Net for multimedia communications.

The alliance between Microsoft and Intel was among a flurry of Internet-related developments yesterday. In other news:

-- Microsoft unveiled an alliance with MCI Communications, Sprint and six Baby Bells, including Pacific Bell, to encourage consumers to go to high-speed ISDN telephone lines for online access. Microsoft plans to make ISDN software for Windows 95 available at no charge, and Windows 95 users will be able to order ISDN lines from their local phone company electronically over the Web.

-- As expected, America Online and CompuServe said they have reached agreements with Netscape Communications to use the Mountain View company's Web browser.

That will make Netscape's product available to 6 million additional consumers, solidifying the Mountain View company's lead over Microsoft in the browser war.

Netscape's stock soared yesterday, closing up 6 1/4 at 46 1/4.

-- In a further attempt to tie itself to the Internet, AOL announced a deal with AT&T in which the giant long-distance carrier will provide access to AOL through its new WorldNet Internet service.

Customers who access AOL through the AT&T service will receive reduced rates for their AOL subscriptions.

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