WorldCom Urges OCC to Bring Real Local Phone Choice to Oklahoma

Testing Crucial Computer Links Is Vital To Ensuring Competition

OKLAHOMA CITY, Okla., August 18, 2000 -- WorldCom yesterday urged the Oklahoma Corporation Commission (OCC) to force Southwestern Bell to continue to take the steps necessary to crack open the state's residential local phone market before it endorses Bell's bid to sell long-distance in Oklahoma.

"It is both a requirement of the federal Telecom Act and good policy for Oklahomans that Southwestern Bell not be allowed to put the cart before the horse on the critical issue of telecommunications competition," said Neal Larsen, regional director for WorldCom Public Policy.

In a filing yesterday, WorldCom asked the Commission to base its review of Southwestern Bell's application to provide long distance here on the status of competition in Oklahoma's unique local phone market, not on what Bell is doing in other states. WorldCom also appealed to regulators to require third-party testing of Southwestern Bell's Operations Support Systems (OSS), the electronic ordering systems and interfaces crucial to establishing a truly competitive local phone market. Finally, the company asked the OCC to implement detailed measurements and meaningful penalties to track Southwestern Bell's service to competitors and provide incentives to maintain high-quality performance as mandated by the Federal Telecommunications Act of 1996 and the Federal Communications Commission (FCC).

"The OCC has an opportunity -- and a responsibility to Oklahomans -- to use long distance entry as an incentive to compel Southwestern Bell to release its monopoly hold on the local phone market," Larsen said. "Businesses and consumers here deserve the same benefits of competition, including lower prices, improved customer service and new, innovative services that customers in Texas and New York are enjoying today."

Under the federal Telecommunications Act, all Bell companies are required by law to prove their local phone markets are open to competition before they are allowed to offer long distance services in their current monopoly markets. So far, Bell companies in only two states have received long distance authorization -- Verizon in New York, and Southwestern Bell in Texas.

"Despite what Southwestern Bell would like regulators to think, an open local phone market in Texas does not automatically mean it is open in Oklahoma - or any other SBC state," Larsen said. "Anyone can see that the average residential customer still has only one choice for local phone service in Oklahoma. Whatever happened in Texas just isn't relevant to Oklahoma and Southwestern Bell must prove to regulators, consumers and competitors that its market is irreversibly open here. The things we're asking the OCC to do today will force Bell to do that."

As a crucial part of its review of Southwestern Bell's long distance bid, the OCC must certify that Bell's Operations Support Systems, the automated, electronic database and information systems and manual processes that Southwestern Bell uses to serve its customers, are fully functional.

The FCC has said that intensive OSS testing or actual commercial experience is critical to determining whether it ultimately will approve a Bell company long distance application. Neither has occurred here.

"In Texas and New York, the FCC ruled that fully functional OSS are critical to opening local markets and allowing companies like WorldCom to come in and begin providing broad-based local residential service," Larsen said.

Southwestern Bell claims that its OSS in Oklahoma is identical to the Texas systems, that the FCC has already blessed the Texas systems and therefore the OCC must give them a passing grade. But the OCC should not just accept this claim without question.

"Southwestern Bell's word alone isn't good enough for market entry; the law requires that they prove their case," Larsen said. "And Southwestern Bell has admitted that the computer processors that were tested in Texas are not the same as the processors that will handle orders in Oklahoma. In fact, the processors are located in different states; Texas orders are processed in Dallas and Oklahoma orders are processed in St. Louis. Because the computer systems for Oklahoma were not included in the Texas OSS test, the OCC needs to conduct a comprehensive, independent third-party test to determine whether these two different systems really are 'identical,' as Southwestern Bell now claims."

Finally, WorldCom told the OCC that simply opening its market to competition isn't enough -- Southwestern Bell should be required to prove going forward that it is providing service to competitors at parity with its treatment of its own retail customers as the Telecom Act and the FCC require.

"Bell needs strong incentives to treat competitors fairly and stiff penalties if it subsequently backslides," Larsen said. "WorldCom is prepared to work hand-in-hand with the OCC and all parties to help bring about real local phone competition in Oklahoma."

WorldCom (NASDAQ: WCOM) is a global leader in "all-distance" communications services with operations in more than 65 countries. Revenues in 1999 were $37 billion, with more than $15 billion from high-growth data, Internet and international services. WorldCom provides facilities-based and fully integrated services to facilitate e-business and e-commerce in the digital generation. For more information go to http://www.worldcom.com/.

Download WorldCom's comments to the Oklahoma Corporation Commission on Southwestern Bell's pending Section 271 application.