OT> BellSouth Files Comments on Access Reform
October 27, 1998
ATLANTA, Oct. 26 /PRNewswire/ via
NewsEdge Corporation -- Background: On
October 5, the FCC released a Public Notice
to update and refresh the record in the
Commission's ongoing access reform
proceedings. This action is initiated in light of
petitions and ex partes filed proposing
significant changes to the market based
approach and the 6.5% X-factor adopted in
the Access Reform Order and Price Cap
Fourth Report and Order released originally in
May, 1997. BellSouth (NYSE: BLS) is
supportive of the FCC's market-based
approach to access charge reform and is
hopeful that the Commission doesn't consider
actions that will move this process
backwards. This would include the
implementation of any prescriptive regulation
on access charges or unnecessary
adjustments to the X-factor.
The following statement is in connection with
BellSouth's comments (to be submitted Oct.
26) in response to the FCC's Public Notice.
The following statement may be attributed to
William (Whit) Jordan, BellSouth vice
president, federal regulatory:
"Price cap regulation is the starting point of a
market-based approach for access prices
-not the ending. If the FCC gives in to the
calls for a " prescribed" approach to access
charges, they will in one step undo the
progress that has been made to reform
regulation and take a giant step backward in
time. While retro-music, clothes and cars
may be chic; retro-regulation is not the way
to establish public policy or the proper
foundation for telecommunications in the
21st century.
"The Commission's adoption of price cap
regulation has provided the public with the
benefits the FCC anticipated. Since price cap
regulation was implemented in 1991, access
prices have decreased by $11 billion
nationwide. For BellSouth alone, access
reductions amount to $2 billion.
"If the FCC's ultimate intention is to again
reduce access charges, we fear the only
outcome will be to pad the big long distance
companies' balance sheets while weakening
investment in services for everyday American
consumers. As noted in a recent study
released by the United States Telephone
Association, in spite of the reduction in their
costs, the Big Three long-distance carriers -
AT&T, MCI Worldcom and Sprint - all
increased their residential long-distance
rates from late 1997 to April 1998.
"From 1991 to the first of this year, AT&T
raised basic interstate rates over 70 percent
and instituted a $3 per month surcharge on
customers whom they decided do not make
enough long distance phone calls.
"Even as BellSouth has reduced its access
charges, we continue to invest significant
amounts in network infrastructure - to the
tune of over $21 billion since 1991. If
regulators want everyday consumers to reap
the benefits of advanced, high-speed
services, why are they attempting to reduce
the return companies get on their
investments? By doing so, regulators damage
companies' incentive to spend money on
networks to deliver to customers advanced
services, such as faster Internet access
through high-speed lines.
"Dramatic reductions in access charges could
hurt universal service. Any decision on
access reform should only be made after the
FCC resolves the critical issues surrounding
the universal service fund. To try and solve
these complex items concurrently increases
the risk of negative impacts on telephone
rates paid by everyday American consumers,
particularly those in rural and high-cost
telephone service areas.
"Reductions in access charges will also
directly impact incentives for other potential
local providers to build their own facilities,
undermining one of the key foundations of
the Telecom Act - the emergence of viable
facility-based competition for local telephone
customers.
"Finally, why not fully recognize that market
forces have become the most reliable means
of formulating access charges? Competition
in local access is exploding. Today there are
more competitive local exchange carriers
(CLECs) than there are incumbent providers.
CLECs took 5 percent of the business local
exchange market in 1997 and will capture
nearly 12 percent in 1999. It's clear
flexibility, not regulation, in addressing
access charges is the best method to
continue competition and rational pricing."
SOURCE BellSouth Corporation
/CONTACT: John Schneidawind,
202-463-4183, or Joe Chandler,
404-927-7420, both of BellSouth
Corporation/
[Copyright 1998, PR Newswire] |
