BELL COMPLETES THREE-YEAR OVERHAUL

Fueled by an experimental regulation plan that provided the company with additional investment incentives, Southwestern Bell Telephone is continuing a multimillion dollar overhaul of Missouri's telecommunications network over the last three years.

The company's 1.7 million customers will see continuing evidence of this comprehensive effort when they receive local service credits in their June telephone bill. The average credit for residence customers will be about $7.

The credit is the result of the "profit sharing" concept that is only one part of the plan, but it serves as an indicator of a much bigger project going on behind the scenes.

The company's $180 million network modernization program is improving telecommunications service for thousands of Missouri customers. The program is on schedule and much of the work will be completed by the end of this year.

The company is in the final stages of installing digital switched in 100 communities across the state and burying 600 miles of fiber optic cable. In the Cape Girardeau area, digital switches have been installed in the following offices: Ste. Genevieve, Bloomsdale, Perryville, St. Marys, Old Appleton, Bismark, Leadwood, Frohna, Pocahontas, Patton and Oak Ridge.

These offices are used to route phone calls and provide calling features like call waiting.

In addition, fiber optic cable has been installed in several of the above counties, plus Altenburgh, New Wells, Festus, Bloomfield and Dexter. Fiber optic cable provides clearer reception and reduces the time it takes to complete a call. The effort is helping provide an additional economic development advantage to Missouri.

"We're investing in Missouri in the largest single program we've ever undertaken to improve customer service and update technology," said Zeke Robertson, assistant vice president for external affairs for Southwestern Bell.

"There are 100 Missouri communities with better opportunities to attract new businesses and where customers have markedly better service than three years ago when we began this effort," he said.

The experimental regulation plan, known as TeleFuture 2000, was put into effect by an agreement between the Public Service Commission and Southwestern Bell in 1989.

"What this experiment proves is that a plan like this can work for customers, the industry and state," Robertson said.

Noting that local phone rates were frozen during the three-year period, Robertson added, "It also disproves the main argument used by opponents of revised regulation. We are investing $180 million in Missouri because we were given the earnings flexibility and incentives to do it. It had nothing to do with increasing rates.

"That's not to say rates are never going to go up. It simply an obviously makes the point that a more flexible system can work better than one-dimensional traditional regulation."

Under this three-year experiment, which expires at the end of this year, the company provides financial information for the previous year to the commission in April. The earnings levels are applied to a formula that determines how much should be shared with customers. The $22.2 million in customer credits to be issued next month are for 1991.

The company distributed nearly $23 million in customer credits last June under the TeleFuture 2000 program for its 1990 earnings.

In addition to installing digital switches for routing calls and installing fiber optic cable to improve the quality of long distance connections, Southwestern Bell also is in the middle of an eight-year plan to eliminate party-line service. The company has eliminated about 30 percent of its 60,000 party lines to date.