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JUSTICE DEPARTMENT RECOMMENDS THAT FCC ALLOW SBC TO OFFER

SBC Has Improved Its Performance In Allowing

WASHINGTON, D.C. -- The Department of Justice today advised the Federal Communications Commission that SBC Communications Inc. has adequately addressed the Department's prior competitive concerns regarding its pending application to provide long distance service in Texas, and has recommended approval of that application provided that the FCC makes positive findings on two issues identified by the Department in today's submission.

According to the Department, SBC's recent performance in providing access to its local telephone lines, or "loops," to companies seeking to offer digital subscriber line (DSL) services for high speed Internet access has significantly improved. The Department also concluded that SBC's recent performance in providing loops for traditional voice services was adequate, if the FCC determined that SBC's latest performance reports were accurate and also that competitors would be able to freely utilize either of two processes for obtaining those lines.

"I am pleased that SBC has responded to our concerns by improving its wholesale customer service," said Joel I. Klein, Assistant Attorney General in charge of the Department's Antitrust Division. "SBC's recent performance modifications will benefit consumers in Texas and will increase local telephone competition in that state.

The Department provided its competitive analysis today in a letter to the FCC. This is the Department's fourth filing regarding SBC's applications to provide long distance service in Texas under Section 271 of the Telecommunications Act. SBC filed its first application to provide long distance services in Texas on January 10, 2000. The Department twice advised the FCC to deny that application because of SBC's inadequate performance in providing loops for high speed Internet access as well as those for traditional voice services. Since the break-up of the integrated Bell system as part of the AT&T divestiture, the independent Bell Operating Companies (BOC's) have been barred from providing long distance services in their respective regions, first as part of the divestiture decree, and now under the terms of the Telecommunications Act of 1996. Under Section 271 of the Act, a BOC, such as SBC, may not provide in-region long distance services until it demonstrates to the FCC that it has met a variety of legal requirements designed to open the local telephone markets in a particular state to competition.

In considering whether to approve a BOC's application for long distance authority in a particular state, the FCC must consult with the Department of Justice and give "substantial weight" to its assessment of competitive conditions in a market and whether the BOC should be allowed to provide in-region long distance service.

SBC filed its second application for the state of Texas with the FCC on April 5, 2000. Under the terms of the Act, the FCC must approve or deny the application within 90 days.

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