In the telecommunications industry, the pace of change is so quick it can make you dizzy. Just about every week, there is some new and wonderful development that makes last week’s miracle seem routine. Ideas that seemed impossible only a few short years ago are today part of daily life. Can you remember back when a rotary phone in any color than black was cutting edge? Now you can traffic data at gigabyte speeds, route video in real time over a robust fiber-optic network and access the Internet from the palm of your hand, just by punching the keyboard on your digital wireless telephone. It’s exciting to look at this pace of change and wonder about what’s coming next. What kind of advances will make our kids look back one day and see today’s level of technology as quaint? But this is also a time in which consumers have good reason to be wary. With the amazing growth in telecommunications comes products and providers whose experiences and track records in the community are young and undefined. The industry is in a volatile stage, with a lot of new companies making a lot of promises. The good news is that consumers can expect to benefit from senior players in the industry like Pacific Bell which continues to pioneer innovative, useful and reliable services. Across the telecommunications spectrum, demand for new residential and business services is surging. The single-line home is going the way of the one-car garage. In new housing tracts, developers have added ISDN (Integrated Services Digital Network) to the upgrades you can select. Likewise, businesses are seizing upon fiber-optics to gain a competitive edge, speeding the flow of data to enhance communications with employees and customers worldwide. We invest more than $1 billion each year to ensure that our customers have access to the most sophisticated and advanced telephone network in the world. The investment in Los Angeles County is $350 million annually, and we pay special attention to the San Fernando Valley which has fast become the production hub for the motion picture industry. In addition to investment, we study how people do business. There is no longer a single paradigm. To give people who work at home what they need to compete, Pacific Bell has brought FasTrak ISDN to their residences. The technology allows entrepreneurs and telecommuters to dramatically improve the efficiency of their home offices with virtually instant Internet connections and multi-tasking capabilities through your existing copper phone lines. Now you can use your phone, modem and fax simultaneously and faster than ever. Small businesses can also harness the ISDN technology to remain competitive, while utilizing specialized calling services, such as Centrex or voice mail. And for businesses moving mountains of data at gee-whiz speeds, there’s Pacific Bell’s extensive fiber-optic network. The digital network snakes through Southern California and beyond, allowing companies to traffic data, video and voice at speeds up to 650 Mbps. We are connecting Hollywood studios with post-production houses across the Valley floor, providing a host of video connectivity services that deliver high-quality audio, film and video over the fiber-optic network allowing them to view, edit and produce in real time. Professionals in a variety of industries use Pacific Bell’s advanced video services, including industrial, corporate and educational institutions interested in applications such as distance learning and medical imaging. As the curtain rises on the next Millennium, Pacific Bell understands the way of the future. Fast. Easy. Everywhere. That’s what its new infrastructure has to offer. As tough as this challenge looks, it comes at a good time for our company and for our customers. As deregulation opens all telecommunications markets to competition, we have the opportunity to differentiate ourselves and our technologies from Brand X. And best of all, we can draw upon a network that has proven its reliability time and time again. These are fast-changing times, these dot.com days. But it all boils down to one thing: making connections. It’s what we do best — whether you’re phoning a customer across the street or transferring data to employees in Frankfurt or Beijing. As the technologies change, we’ll continue to provide solutions. Note: Michael-Jon Smith is Pacific Bell’s executive director for the San Fernando Valley. Visit Pacific Bell’s website at www.pacbell.com ###