I was doing some research from the prospective of companies that may fit well with FNET (DCIC_&_FTEL) in providing long distance calls and paying local charges. Appearantly long distance carriers want access to local call business and vice versa. I have attached an article which highlight the market potential of FNET. Notice that the market is long distance to local (and vice versa) is very difficult to crack. FNET will crack this market through NEW TECHNOLOGY. Once this is universally known, I suspect a lot of big companies will e FNET this technology and see how they can make money from it. It's clear from reading this article that the long distance carriers can not play well with the local call providers.
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Here is the article.
LCI's Ending Talks Shows Local-Svc Mkts Tough To Crack
NEW YORK (Dow Jones)--LCI International Inc.'s (LCI) announcement that it has temporarily stopped negotiating with several local telephone carriers over breaking into their markets is typical of the difficulties other long-distance companies have faced.
And while the announcement was no surprise, analysts and industry insiders said, it could indicate that opening local telephone markets to competition won't happen without major outside intervention.
''I think it's going to be an arbitrated process,'' said Simon Flannery, an analyst with J.P. Morgan Securities Inc. ''It's just too important. The stakes are too high.''
LCI, a small, fast-growing long-distance company based in McLean, Va., said earlier it would end formal negotiations with 10 local-service companies - including the seven Baby Bells - because the parties couldn't agree on terms for allowing LCI to compete for their customers.
Under the Telecommunications Act of 1996, signed into law in February, local-service providers must open themselves to competition. Later, those companies also will be able to compete for long-distance customers.
But LCI complained that at least seven of the local carriers wouldn't even provide basic technical and pricing information necessary for talks to move forward.
That isn't surprising, said Lee Weiner, LCI's vice president and general counsel.
''Keep in mind these are people who have had local-exchange monopolies for the better part of 100 years, and now they're being confronted with having to foster local-service competition,'' he said.
A spokesman for Ameritech Corp. (AIT), one of the companies talking with LCI, denied that generalization and said his company was happy to deal with competitors.
''I guess what we would naturally point to is the 17 agreements that we've already made for resale and interconnection with
other companies,'' said Ameritech's George Stenitzer. ''Clearly we can come to an agreement.''
LCI said Ameritech was one of three companies that did comply with some of its requests.
Still, in the wake of LCI's announcement, officials with two other long-distance companies said they shared LCI's frustrations about breaking into local telephone markets and predicted more roadblocks to local-market competition.
Bernie Tylor, a spokesman for MCI Corp. (MCIC), said his company has had trouble getting pricing information from many local phone carriers. MCI is currently in mediation with Ameritech in Ohio, Wisconsin and Michigan to try to find a way to open that market.
AT&T Corp. (T) has had to resort to mediation with U S West Communications Group Inc. (USW), spokesman John Heath said. Talks with BellSouth Corp. (BLS) in Alabama also broke down, Heath said, and BellSouth requested mediation with AT&T. Ameritech has asked for mediation with AT&T as well, Heath said.
AT&T issued a statement saying LCI's announcement ''is not surprising. We share the same frustration, but will continue to negotiate with incumbent phone monopolies on how to bring choice to customers for local phone service.''
Although some companies are providing local service inside Baby Bells' service areas, no Baby Bell has yet signed an agreement with a major long-distance company to compete for local customers. Eventually, long-distance companies will buy space on local networks and resell it.
An official with the Federal Communications Commission, which is helping to implement the telecommunications legislation, said the law anticipated such struggles between local and long-distance companies. That's why lawmakers included a provision for state-sponsored arbitration over the issue, she said.
LCI said it bailed out of its talks partly to avoid arbitration. Under the law, companies have a 25-day window to ask for arbitration if they haven't reached an agreement after 135 days.
LCI's Weiner said the company would continue informal talks with the Baby Bells, Cincinnati Bell Inc. (CSN), GTE Corp. (GTE) and Sprint United, a unit of Sprint Corp. (FON). LCI's stock fell 5.5% today on news of the breakdown in negotiations.
Moreover, negotiations between all phone companies are expected to get even more complicated next month when the FCC releases much-anticipated ''interconnection rules'' regulating local-service competition.
But few expect the recent clashes to significantly delay the opening of those markets, set for late 1996 or early 1997.
By Rebecca Buckman |
