[RCN Corporation Sees Positive Economic Impacts From Today's FCC Ruling]
PRINCETON, N.J., Aug. 5 /PRNewswire/ -- RCN Corporation announced today that it foresees positive impacts from today's Federal Communications Commission (FCC) ruling adopting new rules reforming the access charges paid by long-distance carriers for use of the facilities of local exchange carriers (LECs).
The FCC today adopted new rules establishing a framework through which LECs can obtain pricing flexibility for special access services. "Special access" services are dedicated, high-capacity transmission facilities typically used by other telecommunications carriers. As a customer of special access facilities, RCN believes it may soon be able to obtain reduced prices from LECs and other vendors as a result of this new pricing flexibility.
"As a user of high-capacity telecommunications facilities, we are always interested in obtaining more competitive prices from our vendors," said Bruce C. Godfrey, RCN Executive Vice President and Chief Financial Officer. "However, we hope the FCC will take care to limit this pricing flexibility to those markets in which competitive alternatives to LEC services really exist -- which include the markets currently served by RCN's facilities-based alternative to the incumbent local phone providers. Otherwise, LECs could engage in discriminatory pricing that would harm, not promote, real competition."
Separately, the FCC is also considering a plan recently filed by a coalition of long-distance carriers and LECs for the restructuring of access charges. Among other things, this proposal would increase the monthly subscriber line charge paid by residential consumers to $5.50 as of January 1, 2000, with phased increases to $7.00 by July 1, 2003. The plan would also eliminate so-called "PICC" charges on residential lines, and reduce (eventually by half) the per-minute access charges paid by long distance carriers. The proposal is supported by a coalition of six large telecommunications companies, including Bell Atlantic and SBC Corporation, the parent company of Pacific Bell.
RCN's preliminary analysis shows that the coalition plan would be beneficial to RCN. "In this proposal, our largest competitors are basically offering to increase their prices for one of our core services, residential local phone lines," Godfrey said. "This will make our services even more attractive to consumers. The proposed reduction in per-minute access charge revenues, which would be phased in over several years, should be offset by a reduction in access costs for our long-distance operations as well as increased usage volume."
Godfrey cautioned, however, that all of the impacts of the access reform proposal are not yet known, and that the proposal could face substantial opposition and possible changes during the process of FCC consideration. |
