SBC Files Additional LD Evidence with FCC

Supplemental Filing will Address DOJ Concerns

SBC Communications Inc. [NYSE: SBC] has notified the Federal Communications Commission that it will file additional evidence supporting its application to provide long distance service in Texas and will ask the Commission to commence a new review process, which can take up to 90 days.

In a letter sent to the FCC late on March 31, SBC said it will make its filing by Wednesday, April 5. SBC's filing will address concerns raised by the Department of Justice and competitors over SBC's original application and will allow the FCC to re-open the record so all parties, including the Department of Justice, can further comment on the application and supplemental information.

"When we asked the FCC in January for permission to sell long distance in Texas, we said our application met every statutory and regulatory requirement," said Priscilla Hill-Ardoin, SBC Senior Vice President for Federal Regulatory. "The Texas Public Utility Commission, which spent nearly two years reviewing the application and opening the local phone market in Texas, agreed. We still believe that is true.

"We recognize, however, the concerns raised by the Department of Justice and the staff of the FCC," she continued. "We believe that we can address every issue they have raised, but we want to submit it as part of the official record so that it may be fully considered. By extending their consideration of our application, the Commission can re-open the record and allow all parties to submit new information."

During the FCC's current proceeding, the Department of Justice focused on SBC's ability to supply to competitors lines capable of providing high-speed Digital Subscriber Line (DSL) service, as well as SBC's ability to transfer lines to competitors through a process known as "hot cuts." "SBC is on very firm ground on these issues, and we want to make sure the Commission has the latest and most reliable information," added Hill-Ardoin.

SBC has already provided the FCC with information addressing the Department of Justice's concerns, but much of that information has been filed since the official record closed on February 22. SBC's supplemental filing will put that information on the record and will provide additional information regarding SBC's provision of unbundled loops to competitors to provide DSL, the use of SBC's operations support systems ("OSS") by competitors and how SBC provisions "hot cuts" to competitors.

Since SBC applied to provide long distance service in Texas, competition in the local phone market has continued to thrive, in particular competition for advanced services such as DSL. AT&T and Sprint have embarked on massive new marketing campaigns to attract local customers, and competitors have gained at least 384,010 new lines since the application was filed. Competitors now operate over 1.7 million lines in Texas.

Competitors have also captured more than 5,000 DSL lines in Texas, most of them in recent months. This is more than five times the DSL lines that were provided in New York when the FCC approved Bell Atlantic's long distance application there.

After conducting a 22-month review, the Texas Public Utility Commission (PUC) unanimously endorsed SBC's long distance application on December 16, 1999 and found that SBC had opened the Texas market to competition. The Texas PUC has continued to strongly advocate FCC approval of SBC's application.

"The Texas PUC has worked hard to bring full-fledged competition to Texas and has developed an excellent track record," Hill-Ardoin continued. "We look forward to submitting additional evidence so we can get on with the business of bringing competition to Texas consumers."

The procedure for restarting the period for FCC review is set out in the FCC's standard procedures for long distance applications and has been used once before, when the FCC extended consideration of BellSouth's application to provide long distance in Louisiana.

SBC's Southwestern Bell Telephone subsidiary provides local service in Texas.