Allegheny to enter telephone business

December 02, 1997

Allegheny to enter telephone business


Staff Writer

Allegheny Power is branching out into the telephone business through a partnership with a national telecommunications company, company officials announced Monday.

The multi-state electricity supplier, headquartered in Hagerstown, and Hyperion Telecommunications have paired up as Allegheny Hyperion Telecommunications to offer telecommunication services to commercial and residential customers, according to Allegheny Power spokeswoman Cynthia A. Shoop.

Under the agreement, Allegheny Power will construct fiber optic networks for Hyperion through its affiliate, Allegheny Communications Connect, according to Shoop.


Through the state-of-the-art networks, the company can offer a range of options including local telephone service, high-speed Internet access and hookup to long distance carriers, Allegheny Power Vice President Richard Gagliardi said.

The company will initially target a specific area of western Pennsylvania with a high concentration of users, Gagliardi said.

It will cost an estimated $5 to $10 million to set up a network in that area, he said.

With its pilot utilities deregulation program, Pennsylvania is a good place to introduce telecommunication services because they can be offered together, or "bundled," with electricity and other Allegheny Power products to give the company a competitive advantage, Gagliardi said.

"This is one of the things we can have when we go to the customer that we can offer as a package," he said.

Allegheny Power currently provides electricity to 1.4 million customers in Maryland, Pennsylvania, West Virginia, Ohio and Virginia.

A subsidiary of Adelphia Communications Corporation, Hyperion Telecommunications now operates 18 telecommunications networks throughout the country.

"The idea is to work with Hyperion over the next number of years to expand this over our territory," Gagliardi said.

Because of the high cost of the fiber optic networks, the company will need signed contracts with high-volume business users in an area before building a new network there, he said.

It's possible Washington County residents could get both their electric and telephone service from Allegheny Power in the future, Gagliardi said.

The Hagerstown area has three high-usage businesses - Citicorp Credit Services Inc., First Data Merchant Services and Allegheny Power - that together could support building a network that other business and residential customers could take advantage of, he said.

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