A panel appointed by Mayor Marion Barry to analyze the city's future telephone system needs has concluded that the District's present Centrex system provided by the Chesapeake & Potomac Telephone Co. is more costly than high-tech alternatives and that the city's rationale for retaining the C&P system may be flawed.
Barry warned last year that if the city abandoned the Centrex system, C&P might be forced to seek substantial increases in rates charged residential users to make up for lost revenues from the District governnment. The report found, however, that the loss would result in only a 22-cent increase per month in the average residential phone bill.
"A decision by the District government to replace C&P's Centrex service with an alternative would have a negligible impact on other telephone rates and that impact would only last for a short time," the 22-member Mayor's Advisory Committee on City-Wide Telecommunications stated in its final report.
Barry said yesterday that he had not read the report and would have no comment on it.
Delano Lewis, a C&P vice president, said it would be premature to assess the impact of the study on the city's decision to award the contracts. Lewis added that there is logic in the argument that telephone rates in the city would be increased if the District abandoned the Centrex system.
"If you lose revenue across the board with the loss of some Centrex services, you are going to impact some ratepayers," he said. "Whether that goes to residential or other business is to be determined."
Mark Plotkin, a member of the advisory committee and a critic of the telephone company, said yesterday that the panel based its conclusions partly on testimony provided by C&P officials.
"The mayor and C&P can never come back to us now to justify a rate increase based on this," he said.
The advisory committee, in addition to assessing the current Centrex system, studied various options for new telephone contracts expected to cost up to $20 million.
Those options included: District participation in a planned federal telephone system called the Washington Interagency Telecommunications System; acquisition of private high-tech systems termed PBXs, or development of a new, "integrated" telephone system that would be wholly owned and operated by the city.
Considered critical by the committee is the use of digital technology that would permit the simultaneous transmissions of voice and data between telephone users. The Centrex system now in use by the city employs nondigital, analog technology. C&P officials said yesterday that in the future the Centrex system will be converted to digital.
William Johnson, director of the D.C. Department of Administrative Services, said yesterday the report would be "the backdrop in terms of direction" for city officials planning the telephone system, adding, "We hope to have a telephone contract by late 1988."
The telephone contracts were at the center of a major controversy in the Distict government last year after former cabinet officer Jose Gutierrez accused the mayor and City Administrator Thomas Downs of trying to steer the contracts to C&P for political reasons. Lewis, a longtime friend of Barry's, was a top official in Barry's 1982 mayoral campaign.
The dispute began when the D.C. government tossed out a unanimous recommendation by a five-member advisory panel that the city award the first element of a new citywide telephone system -- for the new Reeves Center municipal buiding at 14th and U streets NW -- to Rolm Corp., an IBM Corp. subsidiary. C&P's proposal was rated third out of six in the bidding process.
Gutierrez, who was demoted and later fired after Barry accused him of manipulating D.C. contracts, complained that C&P was receiving favorable treatment from the city despite a determination by his staff that the telephone company's prices were high and that the Centrex system was not as up-to-date as the digital PBX systems offered by other firms.
The $1.2 million Reeves Center contract was given in August to Tel Plus Communications Inc., a Florida-based firm that installed an advanced PBX system at the municipal building.
The study panel, in comparing PBX systems with the Centrex system, drew on the performance of the Tel Plus system's performance at the Reeves Center.
"As the District has already discovered in its recent Reeves Center procurement," the report said, "a straight comparison of a PBX -- based system with Centrex shows the PBX to be less costly after the first few years."
The study panel also examined the advisability of the District joining the proposed Washington Interagency Telecommunications System (WITS), a project of the federal General Services Administration.
The panel suggested that such an arrangement could keep costs down because of the economies inherent in such a large-scale project involving hundreds of thousands of telephone lines. In addition, a joint venture with the federal government would save the city the cost and time of conducting a full-scale procurement exercise.