Copyright 1999 The Buffalo News
The Buffalo News
December 23, 1999, Thursday, CITY EDITION
SECTION: BUSINESS, Pg. 7A
LENGTH: 704 words
HEADLINE:
BELL ATLANTIC WILL OFFER LONG-DISTANCE BY JAN. 5
BYLINE: FRED O. WILLIAMS; News Business Reporter
BODY:
Starting Jan. 5, Bell Atlantic will
sell long-distance service to homes "from Buffalo to the Bronx," chairman Ivan
Seidenberg said, after receiving landmark approval to re-enter the forbidden
business.
"We will hit this market in a big way," he said.
On
Wednesday, Bell Atlantic won federal permission to return to the long-distance
market in New York. The company demonstrated that it has opened its network to
competitors, the Federal Communications Commission ruled. The Consumer
Federation of America hailed the decision as a step toward more choice in
telecommunications.
"We think there's a structure here that will support
competition," said Mark Cooper, director of telecommunications for the
Washington, D.C.-based consumer group. "They (regulators) have to be vigilant
that there's no backsliding."
But critics charged that the company is
using its control of the local phone network to restrict competition, while
rivals said the development justifies mega-mergers in the industry.
Bell
Atlantic plans a "no-surprises" service with no monthly fees, president James G.
Cullen said. The service will compete with average long-distance costs of 15
cents a minute, he said.
"There are lots of plans in the market . . .
(but) all of them have strings attached." Bell Atlantic will spell out the
price, plus details of a local-with-long-distance service package, on Jan. 4.
The company's move adds a big competitor to a growing list of
"all-distance" service providers. The three long-distance majors -- MCI, Sprint
and AT&T -- have rolled out local phone service for the New York market in
recent weeks.
Bell Atlantic will be able to springboard from its
position as the state's dominant local service. Its 13 million local access
lines are about 89 percent of New York's total.
The FCC action marks the
first time a Baby Bell has been allowed back into the long-distance market since
the Bell System breakup in 1983. Under the Telecommunications Act of
1996, Bells can return to the long-distance market after allowing
competitors to connect freely into their local phone network.
Bell
Atlantic met a 14-point test for openness, Seidenberg said. The company shares
its network with 74 competitors in New York who provide more than 1.5 million
business and residential lines. But some critics say the company continues to
wield monopoly power from its dominant hold on the local loop.
"It is
obvious that . . . Bell Atlantic's Internet company is selling service below
cost," said Bruce Kushnick, executive director of New Networks Institute in New
York. Competing services also have difficulty getting access to Bell Atlantic
lines, he said.
The U.S. Justice Department was also critical of Bell
Atlantic's dealings with competitors and argued against its petition.
Seidenberg referred questions about competition back to the FCC
decision, saying the agency's approval "speaks for itself."
Telecom
giants said allowing Baby Bells into direct competition with long-distance
providers is spurring the industry's merger wave.
The FCC decision
"highlights one of the main reasons for the pending Sprint-MCI Worldcom merger,"
Sprint general counsel J. Richard Devlin said. Their large customer base gives
the Baby Bells an advantage that their rivals can match only by combining
forces, he said.
Bell Atlantic hopes to capture 25 percent to 30 percent
of New York's long-distance market within five years, and doesn't expect to make
a profit on the service for at least two years, officials said.
Petitions to sell long-distance service in other parts of its 13-state
region are pending. Initially, the company will use Sprint's long-distance
information pipes, Seidenberg said. Eventually it hopes to use GTE Corp.'s
facilities to complete long-distance calls, following its proposed merger with
GTE.
AT&T all but promised to appeal the FCC's decision in court,
claiming the commission ignored evidence that Bell Atlantic gives its own orders
priority over competitors.
"Today's decision shortchanges the people of
New York because it does not ensure that Bell Atlantic's local phone markets are
truly open to competition," said Jim Cicconi, AT&T's chief legal counsel.
GRAPHIC: Associated Press; William Kennard, chairman of
the Federal Communications Commission, announces the decision Wednesday to allow
Bell Atlantic to become the first Baby Bell to offer long-distance telephone
service.
LOAD-DATE: December 29, 1999
