Copyright 2000 Journal Sentinel Inc.
Milwaukee
Journal Sentinel
February 7, 2000 Monday FINAL EDITION
SECTION: BUSINESS; Pg. 1D
LENGTH: 1122 words
HEADLINE:
Talks may take consumers off hold;
Firms, regulators edge toward open phone
market
BYLINE: LEE BERGQUIST of the Journal Sentinel
staff
BODY:
After years of false starts, state
regulators and the telephone industry appear to be getting serious about laying
the groundwork for meaningful competition in the local telephone market in
Wisconsin.
If myriad technical issues can be resolved, it could mean
good news and bad news for consumers: There are prospects for lower prices, but
consumers could be saddled with an onslaught of telemarketers and forced to
decipher complicated new pricing plans.
In addition, phone companies
might have to patch up relations with customers, since they generate the biggest
number of complaints with the state Division of Consumer Protection.
Last week, staffers at the state Public Service Commission began meeting
with telephone companies over a series of back-office matters that must be
resolved before consumers have a real choice in phone service. But the issues
are numerous and complicated, and those involved agree it will probably take a
year before most consumers pick and choose from local phone providers.
Ironically, this week will be the fourth anniversary of the passage of
the Telecommunications Act of 1996, which was designed to knock
down barriers between long-distance and local telephone companies.
Although the law was supposed to prod competition, the Baby Bells still
have a stranglehold on local markets.
In Wisconsin, No. 1 phone company
Ameritech Corp. still dominates the local market.
Ameritech has
repeatedly said the market for local service is sufficiently open, and to prove
it, the company said a total of 1.2 million phone lines have been lost to
competitors, according to documents filed with the PSC on Jan. 27. Ameritech,
which operates in the five-state region of Wisconsin, Illinois, Michigan,
Indiana and Ohio, is owned by Texas-based SBC Communications Corp.
The
company operated 2.2 million lines in Wisconsin as of June 30, 1999, company
figures show.
Ameritech says that Madison is one of the most competitive
areas in the region, with more than a half-dozen new entrants in the market.
"Yes, thousands of customers are already choosing to leave Ameritech for
another company," said Jim Butman, president of TDS Metrocom, a Madison-based
phone company that recently started marketing local phone services in
Milwaukee's western suburbs.
He said TDS Metrocom has signed up
customers representing 35,000 phone lines in suburban Milwaukee, Madison, the
Fox Valley and Green Bay since February 1998, and is adding 1, 500 new business
and residential lines per month. Guidelines permit customers to retain their
existing phone numbers when switching providers.
"But Ameritech still
has 98% of the market," Butman said.
Nationally, only Bell Atlantic has
demonstrated to federal regulators that it has opened up its market enough to be
allowed to sell long distance service -- a key tenet of the 1996 telephone act.
The Federal Communications Commission in late December approved Bell Atlantic's
entry into long distance in New York state.
In Texas, regulators there
last month said Southwestern Bell, a unit of SBC Communications Inc., has
sufficiently opened its market to competitors. They recommended that the FCC
allow Southwestern Bell to sell long distance service in Texas.
In
Wisconsin, while phone companies have begun selling local service, especially to
more profitable business customers, competitors and the PSC say that Ameritech's
back-office operations are too clunky and time consuming to allow a customer to
easily jump from one phone company to another.
Until that system is
fixed, major players such as long-distance companies AT&T and MCI will stay
away. Even though these companies might build their own networks, they might
have to work closely with the Baby Bells to gain access to customers' homes.
AT&T, for example, had moved into Illinois and Michigan in 1997 and
was considering re-selling Ameritech local services in Wisconsin and other
markets when it pulled the plug a year later.
"We weren't making money,"
said AT&T spokesman Mike Pruyn.
A key complaint was about the
back-office operations, what the industry calls "operations support systems."
Pruyn said it took seven to 10 days to switch a customer from Ameritech
to AT&T, when it should have taken two or three.
The PSC is expected
to pick a consultant who will oversee adoption of that system, and make sure it
provides a seamless mechanism to hand off customers, locate phone lines and get
access to phone numbers, according to Nick Linden, an assistant administrator at
the PSC.
Linden estimated there are some 700 measures that must be
tested and re-tested before the PSC is convinced that companies can compete on a
level playing field.
The role of the PSC is key, since the FCC won't
allow Baby Bells like Ameritech to move into long distance until state
regulators are convinced local markets are open.
What happens when
Wisconsin's telephone market is deregulated?
Prices could fall,
especially for high-volume users.
But Bill Oemichen, state trade and
consumer protection administrator, said he is concerned that deregulation will
confuse many consumers.
"In the long-distance market, where there is
intense competition, what we are seeing is that in order to increase sales some
companies are willing to use deceptive trade practices," Oemichen said.
Many pricing plans offer low per-minute charges, but consumers sometimes
are not told about fixed monthly charges, he said.
Phone companies
account for the most complaints to the agency. Last year, MCI generated the
second- highest number of complaints by a single company, AT&T was fourth
and Ameritech was fifth, he said.
Ameritech spokesman Michael King noted
that the total number of complaints with Ameritech is low, compared with its
number of customers.
"If there are spikes in our service . . . we will
do our best to make sure that we take care of our customers' needs," King said.
That means customers like Tricia Knight, a partner with the Milwaukee
accounting firm of Ritz, Holman, Butala, Fine.
The firm was founded in
the mid-1950s, but for the first time last fall, it was left out of the business
listings of the Ameritech white pages.
The Milwaukee Journal Sentinel
reported last month that Ameritech's government listings were so riddled with
errors that the company will reprint the listings. The company also acknowledged
that the number of errors with business customers was higher than usual, blaming
the snafu on software glitches and poor data entry.
Knight said her
company has been unable to get anyone at Ameritech to return phone calls since
early November.
"I am so angry," she said. "I would think that a big
corporation would have the courtesy of getting back to you."
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