More than 20 major associations and other organizations with offices in the Washington area have formed what is apparently the first nonprofit telephone network, a system that allow the groups to use complex and costly technology that would otherwise be available only to large corporations.
Called the National center for Higher Education network, the telephone service primarily serves educational groups that share an office building at 1 Dupont Circle NW.
Although the network was first put into operation only last year by the American Council on Education, officials of the network say they have cut long-distance telephone bills for the members organizations by as much as 20 percent using a combination of arrangements supplied by long-distance carriers. p
Not only has the development of the network cut the bills of the member organizations, but its establishment has also enabled officials of the group to monitor employee calls more closely, according to Richard Strathmeyer, treasurer and business manager for the American Council on Education.
The network was set up and is managed by Danskjold-Reed Lt., a Washington-based firm that specializes in setting up similar networks for companies and organizations. The firm, owned by Frank Ball, the company's president, and Walter Anderson, operations manager, has set up 45 systems for a variety of groups, The NCHE networks uses equipement manufacturd by Atlantic Research Corp. of Alexandria and rented from TDX Systems Inc. of Vienna.
The participants in the network range from educational organizations such as the American Association of State Colleges and Universities to organizations with diverse missions such as B'nai B'rith International and the Brookings Institution. The American Bankers Association and WETA-Channel 26 are also members. The League of Women Voters and the Heritage Foundation will soon be using the networks telephone services and by the middle of next month 29 groups will be part of the NCHE network.
Strathmeyer began planning the network in 1979, in part of the geographic limitations of the network of MCI Communications Corp., the district-based long-distance company, that had been supplying his association with calling services.
Since the educational organizations who occupy the Dupont Circle building already were sharing facilities, such as printing equipment, Strathmeyer thought a shared telephone network might be a valuable financial venture. "Telephone costs were escalating and nobody was happy, "Strathmeyer said.
But setting up the network with Danskjold-Reed was a complicated process. The project had to receive approval from the Federal Communications Commission and assistance from C&P Telephone Co. before operations could begin. Each of the member organizations had to maintain its nonprofit tax-free status in order to be a part of the shared technology.
"The experience has been technically as good as any of the other system," Strathmeyer said. "Technically it's worked like a charm.
"But part of the motivation for doing this kind of thing is cost control," he added. "Some employees think using WATS lines is free and firms need a simple way of cost accounting. The phone company was late in coming up with that sort of thing."
Danskjold-Reed provides the member groups with a detailed bill, similar to the bills C&P Telephone customers now receive. The bills list which phone in an organization is the originating source of the call and how long the line was in use. It also lists which of the services used by Danskjold-Reed carried the call.
"If there are any questions, a supervisor can call in his staff," said Ball. In fact, Ball said, WETA, which found that employees' personal calls represented 30 percent of the WATS line use, noticed a sharp drop in total minutes called after installing the network.
In addition to the monthly phone bill, the only other payment made by the member groups is a $1-a-month charges over the first 18 months of each organization's participation in the network. And the network -- which is now handling more than 3,000 hours a month of calls -- has the capability of reaching every phone in the nation, using American Telephone & Telegraph lines, in addition to the transmission facilities of International Telephone & Telegraph Corp. and RCA satellite hook-ups.
Evenutally, Danskjold-Reed hopes to add lines from Western Union, American Satellite Corp. and Satellite Business Systems to provide more options for network members.
Like similar systems installed by large corporations, the NCHE network uses a computer to route a call to the least costly line. According to Anderson, the costs per minute of calling over the network runs to between 8 cents and 15 cents a minute, compared to an averge of 43 cents a minute using direct dialing methods.