San Diego — Last week, amid great fanfare, President Ernesto Zedillo opened Telmex's San Diego telephone operations base. This, he said, was the beginning of a new era in cross-border cooperation.

So how come I'm standing by this pay phone near McDonald's in San Ysidro with 56 quarters in my hands, just so I can call my friend Héctor, who's a thousand paces away across the border in Tijuana? If it weren't so noisy down here I could practically holler.

The quarters are for, first: directory inquiries. "Please deposit $7.95 cents..."

Now I'm calling Héctor. 011-52-66... "That'll be $5.00 for the first three minutes. Please insert your coins slowly." Yeah. And $1.07 for the next three minutes. Fourteen dollars to project my voice 1000 yards. I discovered too late that I could have called directly for $3.95. Big deal. I could call New York, 3000 miles away, for $3.70, with 99¢ plus tax for directory assistance.

I start calling around. MCI and Sprint, you have to be on their plans to call from a pay phone. With AT&T and MCI, you can call Mexico for 10 cents a minute if you're on one of their plans. Sprint quotes me 25 cents -- also on a plan. These involve a monthly separate outlay of $20 to $30, depending on how many services you use. But with 94 million people crossing the border legally into California each year (those are U.S. Customs figures for 1998, up from 91 million the year before) and 58,000 cars coming into San Diego County every day, how many tens of thousands of daily workers need to call back home and have to use pay phones and pay shockingly high prices? My repeated requests for quotes for an all-cash, non-plan call to Héctor brought quotes varying from my initial $5.00 for the first three minutes to $4.05 for the first one minute to $5.75 for the first minute.

This is supposed to be a seamless binational community? Perhaps for those who have residential phones with cheap calling plans. For the rest of us, it's gouging. It's robbery.

Former Federal Communications Commission (FCC) lawyer John Eger thinks so too. "Some people have called it a 'digital divide,' " he says. "An 'information apartheid' in our region. This is the busiest border-crossing in the world. And 60 to 70 percent of the people who cross, cross it every day. So we're talking about millions and millions of crossings."

Many of these people, Eger acknowledges, don't have access to a private phone to use on this side of the border, don't have an AT&T calling plan. If a working mother wants to check if her baby's okay, the call won't cost 10 cents, it'll cost her $5.00. Equally, says Eger, because of crazy nationalist rules on both sides, San Diego television stations can't do satellite transmissions from Baja. They have to videotape their story, then hoof it to the border, no matter how far south the news item is. Maquiladoras either have to pay international rates to transfer volumes of data north to their San Diego-based executive offices, or drive it up by cab.

"This is crazy!" says Eger, who, besides his FCC career, was adviser to presidents Nixon and Ford and SDSU's Van Deerlin Professor of Communications for most of the past decade. He is also executive director of the SDSU International Center for Communications, formed nine years ago.

In 1994, Eger came up with an idea: Bend the border! Both ways. Create a different, flexible electronic border, a bubble enclosing both cities so all calls inside would be local.

"In 1994 we chaired, staffed, and wrote a huge report to the city and county of San Diego and Tijuana. It was called 'The City of the Future Commission.' Mayor Golding launched it. But it was really a joint effort.

"And we looked at ways of using telecommunications to create a regional information economy, based not on the production of goods and services but on the transfer, storage, and use of knowledge or information.... Knowing that globally we're seeing a basic structural shift in the nature of the economy [to one] in which information is a commodity, the new wealth. And information technology, including telecommunications and computers, are the tools of wealth-creation. We said, 'How can we link the maquiladoras on both sides of the border in a seamless way? How can we create a broadband grid for Internet use, for television, for data of all kinds?

"And thirdly, 'How can we benefit all the citizens, the average Joe and Jane who cross the border every day because they live on one side and work on the other?'

"So we developed our proposal: 'The Border-Free Telecommunications Zone.' The concept is simple. It says, 'There's nothing [set in stone] about an international border, if two countries can get together and agree on changes.' Certainly for telecommunications, we could shift the border, so the demarcation line, as to when a [telephone] call becomes international and when it's local, could be shifted 40 miles north and 40 miles south of the physical border.

"That would create what we call a 'free-trade zone' for telecommunications. And all the communications within that zone would be local. This has been a major part of our research: How do you use technology to knit communities back together again? How do you use technology as a source of economic development?

"I went to Washington, and I met with a former FCC chairman and an adviser to the current president. Both of them said, 'You know, if the community wanted to get together and push this item, we think, in the wake of NAFTA, that this would be an interesting thing to look at.' "

So who wouldn't agree with that idea? Perhaps, says Eger, those getting fat off the status quo -- like the long-distance phone companies. "I have had [people] say to me that AT&T would be opposed to this -- as anyone would be who is benefiting now by the current structure. Because every time you or I make an international call, the international carriers get a huge premium. And any time the maquiladoras have to send a package of data across the border, again, it's the same people who benefit."

Don't blame us, says Cheryl Hammond of AT&T. She says if prices to Mexico are high, you have to look at what Telmex is doing. "Long-distance [to Mexico] brings in the relationship that AT&T has to have with Telmex," she says, referring to the giant Mexican virtual monopoly that rules Mexico's telephone industry. "We negotiate 'settlement rates.' They are the rate at which we pay foreign carriers to receive our outbound traffic. So in this case it would be, 'What rate does AT&T pay Telmex for the termination of our southbound calls?' That series of negotiations has been going on for almost two years. We were paying 39H cents per minute to Telmex [on each U.S.-Mexico phone call] when the rate expired at the end of December 1997. [It's now 37H cents.] This rate impacts very much what charge the carrier then passes along to the customer. We have argued to the FCC that the customers have been paying excessive amounts in long-distance charges from the U.S. to Mexico because Telmex is the only carrier in Mexico authorized to negotiate these settlement rates. We argue that these settlement rates should be far closer to what they are, for example, in Canada, which is a country of comparable calling volume. They have a termination rate of less than 10 cents per minute on calls. With Mexico we're looking at almost three, four times that amount.

"Ideally, if you're both sending each other the same volume of minutes, neither carrier owes each other any money. So the commensurate rate you pass along to your customer can be lower. We believe that U.S. consumers have been unfairly subsidizing the high cost of settlement rates to Telmex."

With people in the United States making nearly 3 billion minutes of phone calls a year to Mexico, according to the FCC's 1997 figures, while Mexicans calling north talk to the U.S. for less than 1 billion minutes, how can Telmex resist the 3-to-1 gravy train? And even for the U.S. carriers, getting just one settlement dollar for every three that Telmex earns, those billion 37H cents do help offset what they pay Telmex. Why stop a good thing?

But in a deal with Telmex, the FCC has decreed that settlement fees must come down to 19 cents a minute by January 1, 2000. What did Telmex get by agreeing to this revenue drop? Well, their brand-new offices in San Diego that President Zedillo opened last week, for a start. The FCC has given Telmex permission to operate in the U.S., so effectively it pays itself the settlement rate on calls in both directions. With Southwestern Bell as a long-standing partner, Telmex looks set to continue its domination of U.S.-Mexican telephone communications.

AT&T spokesperson Dianne Bernez says that in 1997, Telmex earned "$800 million from U.S. carriers." AT&T has tied up with another Mexican company called Alestra, and MCI with Avantel, but neither can compete with the giant Telmex, which continues to control local Mexican telecommunications -- and to have a close connection to President Zedillo's government.

In other words, Professor Eger is playing in the land of larga-distancia tigers here. Things don't auger well for his plan to make all San Diego-Tijuana calls local. Yet, it turns out it has been done before.

"A long time ago, there used to be a local service, just from Tijuana to San Ysidro," says Vicente Hérnandez, an engineering manager with Telnor, a Tijuana affiliate of Telmex. "It was like between sister-cities, because the community [along the border] was really one city then. But in 1979, when AT&T came into the game, the FCC said international calls couldn't cross the border without going through an international carrier. Now both sides, COFETEL [Mexico's Comisión Federal de Telecomunicaciones] and the FCC, regulate the way in which the long-distance traffic is carried out."

So how about repeating history? "This is something that could be interesting for anybody who lives on the border, but we'd have to fight against those regulations," says Hérnandez. "If you eliminate the [electronic] border, you'll wipe out long distance. It's difficult to control technically, [but] these conditions are going to disappear sometime anyway. Because long distance itself is already losing its meaning."

Ken Stanley of the FCC in Washington, D.C., agrees. "The problem today is that distance is not a significant cost-creating factor. Using a transoceanic cable, the cost of a minute of service is so small that distance is simply not a consideration anymore."

Does Professor Eger stand a chance, or is he tilting at windmills?

"He would have to file here for approval," says Stanley. "The FCC has jurisdiction over international service. They may want to call it local service, but according to our definition it is an international service. They would have to get our approval and authority to do it. That probably would lead to oppositions from U.S. carriers that wanted to prevent this from happening for [loss of profit] reasons. I wouldn't want to guess on how the commission would come out on this, but [our] tendency has been to allow international liberalization where it promotes the interests of U.S. consumers. And that includes people coming up from Mexico to use U.S. phones. The [FCC] has the authority to do [this]. Whether or not it has the will to oppose Telmex, AT&T, and probably MCI remains to be seen. But the [FCC] has crossed swords with Telmex before and in many cases told them to take a hike. The same is true with AT&T."

After five years, Eger is sounding tired of preaching.

"We're not asking for anyone to lose sovereignty here. There's a lot of concern that we got too big for our britches. We'll be advisers every step of the way. SDSU's president Steve Weber is supportive of it. [County supervisors' chairperson] Pam Slater endorses it. We've had conversations with the Colegio de la Frontera Norte, and another expression of interest from the Instituto Tecnológio de Tijuana, and we will team up with them, once we've gotten a favorable nod, and we know we're making some progress."

On the other hand, when Eger wrote for financial and moral backing to "the major telecomm companies asking them to support us, also Qualcomm, I got no reply from any of them."

Even UCSD's San Diego Dialogue, the cross-border think tank he belongs to, has seemed lukewarm. "It's not really a front-burner issue for us," says associate director Kevin Cottrell. "Generally other organizations have been looking at it. We really haven't entered into any conversations with John, even informally. John's a member of the Dialogue, but he hasn't been terribly active."

Meanwhile, since 1994-'95, donations from Cheryl Hammond, on behalf of "AT&T/Mexico," add up to $31,500, the largest amount given by any single member. Could that influence the enthusiasm for Eger's plan?

"AT&T's involvement in San Diego Dialogue wouldn't predetermine a sound judgment based on good, solid research one way or the other," says Cottrell. "We would be in favor of looking at any means possible that allows for people on both sides to communicate with ease. But we really have stayed very clear of [Eger's plan], and it's because, quite frankly, John has been so active in defining it, if we weighed in it would be an issue of mission-creep. But if there were sufficient community inquiry into the option, I wouldn't preclude us from looking at it."

"Somebody has to keep pushing, nudging it along," says Eger. "We'd love to get some resources -- money -- so that we could go the next step and actually hire counsel to make a filing with the FCC and COFETEL and then go to our congressional representatives in both countries and say, 'Hey, let's make this happen.'

"But truth to tell, we have not followed through. And this is one of San Diego's dilemmas: we're great visionaries here, but we're a little short on performance, delivery."