Northwestern Indiana Telephone Company - Page 10

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            equipment it had installed within the past 5 years was state of                            
            the art equipment that offered the latest calling features.                                
            NITCO's operating experience with its Alcatel equipment has been                           
            good.                                                                                      
                  In an August 17, 1990, response that was submitted by NITCO                          
            to a service audit report issued by the engineering staff of the                           
            Indiana Utility Regulatory Commission (IURC), NITCO indicated                              
            that Alcatel was continuing future research and development                                
            efforts with respect to NITCO's Alcatel equipment.  To support                             
            this representation, NITCO attached to its response a copy of a                            
            letter dated August 14, 1990, from Mr. James V. Parish, national                           
            sales account manager--ITT-Alcatel--stating that Alcatel was not                           
            withdrawing from the North American switching market, had no                               
            plans to do so, and was providing a complete line of support for                           
            its switching systems equipment.                                                           
                  From 1987 through sometime in 1992, NITCO did not obtain any                         
            bids on new switching equipment to replace its Alcatel switching                           
            equipment.  In 1992, NITCO for the first time obtained a firm                              
            quotation on the price of possible replacement equipment.  As of                           
            the time of trial, however, NITCO has not purchased new switching                          
            equipment to replace its Alcatel switching equipment.                                      

                        D.  NITCO's Installation of Fiber Optic Cable                                  

                  Although it is more costly than the traditional copper cable                         
            still extensively used by local telephone companies, fiber optic                           




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