WorldCom Reacts to KCC OK of Southwestern Bell Long Distance Bid

Background: October 4, 2000--Today the Kansas Corporation Commission (KCC) dealt a blow to local phone competition and customer choice by prematurely endorsing Southwestern Bell's application to provide long distance service in the state. It is now up to the Federal Communications Commission (FCC) and the U.S. Department of Justice (DoJ) to correctly determine that Southwestern Bell should not be rewarded with long distance entry in light of its continued failure to open Kansas' local phone market to competition.

Under the federal Telecommunications Act of 1996, all regional Bell companies are required to prove to state regulators, the DoJ, and ultimately the FCC that their local phone markets are irreversibly open to competitors before they can be allowed to provide long distance services in their former monopoly markets. Bell companies in only two states have received FCC long distance authorization thus far — Verizon (formerly Bell Atlantic) in New York and Southwestern Bell in Texas. Based on the state of the market in Kansas today, and prior federal decisions, WorldCom is confident that the FCC and Justice Department will appropriately differ with the KCC's finding.

WorldCom has repeatedly asked the KCC to take steps to assure the local phone market is irreversibly opened. In particular, WorldCom has called for third-party testing of Bell's Operations Support Systems (OSS) - the electronic ordering systems and interfaces vital to establishing a truly competitive local phone market. This type of testing and systems validation was critical in opening the residential local phone markets in Texas and New York. There is no evidence - either through intensive OSS testing or actual commercial experience - that Southwestern Bell-Kansas' OSS will support the order volumes that a truly competitive market will generate.

(This statement should be attributed to C.K. "Chip'' Casteel Jr., Vice President, WorldCom Public Policy.)

TOPEKA, Kan., October 4, 2000 —"WorldCom is disappointed that the KCC, which had otherwise appeared to be diligently implementing the federal Telecom Act's requirements for effective local phone competition, has found that Southwestern Bell has already opened its market to competition. To the contrary, the facts show that Bell has not yet removed all obstacles to full-scale competition in Kansas.

Southwestern Bell claims that its OSS in Kansas are identical to the Texas systems, which have passed muster with the FCC. The KCC should not accept this claim without verifying it.

"The FCC has made it repeatedly clear that thorough OSS testing or actual commercial experience is critical to determine whether it will approve a Bell company's long distance application. With lingering questions about the adequacy of Southwestern Bell's OSS, and other concerns, we are confident the FCC and the Justice Department will recognize there is more work to be done. WorldCom looks forward to addressing these critical issues as part of the FCC and DOJ review."