FOR IMMEDIATE RELEASE
February 8, 1999
CONTACT: David Bolger
(202) 326-7279

Three Years and Counting Consumers Wait for
"Full" Telecommunications Competition

USTA Issues "Resolve to Solve" Challenge To
Regulators and Competitors Alike

WASHINGTON, DC -- During a news conference held today at the National Press Club, the United States Telephone Association (USTA) observed the third anniversary of the Telecommunications Act of 1996 by noting that the Act's chief goal, competition in all telecommunication markets, is far from becoming a reality.

USTA President and CEO Roy Neel stated, "If this landmark legislation had been implemented as Congress intended, millions of Americans would today be enjoying the benefits of full competition. Sadly, that is not the case today," Neel said.

"On the plus side, local phone markets have in fact been wide open to competition, but the new entrants -- primarily the long-distance providers -- have effectively ignored most residential customers. This isn't what the Act intended, and after three years, it's time that everyone -- consumers, service providers and regulators -- resolve to solve these issues and fulfill the promise of the Telecommunications Act of 1996."

Neel said the 1,200 local phone company members of USTA were launching their "Resolve to Solve" campaign in an effort to move beyond bickering and encourage meaningful, pro-consumer solutions.

The main obstacle to competition, Neel noted, has been the implementation of the Act by the Federal Communications Commission (FCC): "By ignoring the vision of the Act's authors, the FCC has thwarted the will of the Congress. The Commission needs to embrace the deregulatory, pro-competition approach the Act mandated. Unfortunately, the FCC has created an anti-competitive environment, where new entrants serve only the most lucrative and high-end residential customers. This not only cuts most residential customers off from the benefits of competition, it also puts at risk the concept of universal telephone service -- the cornerstone of America's telecommunications system."

Neel said that USTA calls on the FCC to rectify the situation. "The FCC needs to return to the spirit and the letter of the Telecommunications Act of 1996. Competition, in all areas, for all services, needs to be available to all Americans." He identified three critical first steps to speed delivery of new services and product choice to customers nationwide:

• Preservation of universal service -- If new entrants want access to local markets, they should also have to help ensure that all Americans -- including rural and low income residential customers -- continue to have access to reasonably priced telephone service.

• Opening long-distance markets to full competition -- Opening the local market without allowing all service providers to enter the long distance market has produced "halfway" competition that is not meaningful competition at all. Further, the FCC's requirement that small and mid-size telephone companies must create separate subsidiaries in order to provide long distance service is onerous and unnecessary. It is time to implement Congress' clear intent: fully competitive and open telecommunications markets for all consumers and all services.

• Less regulation -- Instead of following Congress' direction to reduce paperwork and outdated, burdensome regulatory barriers, the FCC has imposed staggering requirements on local exchange carriers. The results are particularly damaging to small and mid-size telephone companies. The Commission should apply the constructive "less is more" approach that it has used with the wireless communications industry when dealing with local carriers.

"Three years is a long, long time, especially in today's rapidly evolving telecommunications industry," Neel said. "There's no telling how many millions of Americans could have been enjoying the benefits of competition all this time, and there's no excuse for continuing to deny them access to new services and consumer choice. Congress enacted pro-consumer, pro-competition legislation in 1996. Let's resolve to solve this together to make sure we get it right before the next century."

For more than 100 years, USTA has been representing the interests of the small, mid-size and large companies of the nation's local exchange carrier industry. The association represents more than 1,200 companies worldwide that provide local exchange, long distance, wireless, Internet, and cable services.

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