FCC Telco Mega-Merger Decisions Due In Six Months
WASHINGTON, DC, U.S.A., 1999 JAN 7
Federal Communications
Commission (FCC) Chairman William E.
Kennard said his agency should decide the
fates of three gigantic telecommunications
mergers by the middle of this year.
Kennard, who today detailed the FCC's
agenda for the year on the same day the
agency moved into its posh new digs at the
Portals office building in Southwest
Washington, D.C., specifically said he
expects the $48 billion merger between
AT&T Corp. [NYSE:T] and Tele-
Communications Inc. [NASDAQ:TCOMA] to
be very "exciting."
He would not comment on the other mergers
between SBC Communications Inc. and
Ameritech Corp., and between Bell Atlantic
Corp. and GTE Corp.
The Justice Department on Dec. 30 approved
the AT&T-TCI merger, which is facing heated
opposition from Internet service providers and
other telecom companies because of AT&T's
refusal to open up the TCI network to
competing voice and data providers.
AT&T plans to offer local phone and Internet
services on TCI's network, with TCI
subsidiary At Home Corp.'s @Home Network
as the default Internet access package. US
West, America Online Inc. [NYSE:AOL] and
several other companies said the plans are
anti-competitive if the TCI network remains
closed.
Kennard said the FCC agenda for this year
should be to "promote competition, to foster
new technologies, to protect consumers and
to ensure that all American have access to...
the communications revolution."
Hinting at upcoming congressional
committee scrutiny of the FCC and its
effectiveness at promoting competition in the
wake of the Telecommunications Act of
1996, Kennard also said the agency will
contemplate major changes to its overall
structure. A Senate Commerce Committee
source recently said, this would
be a priority for Commerce Committee
Chairman John McCain, R-Ariz.
"The top-down, command and control,
regulatory model of the Industrial Age is as
out of place in the new economy as the
rotary telephone," Kennard said. "As
competition and convergence develop, the
FCC will continue to streamline its
operations, eliminate unnecessary regulatory
burdens and make it easier for the public to
interact with the agency."
To promote competition, Kennard said the
FCC would reform access charge systems
to "preserve affordable rates," take closer
looks at merger proposals, promote video
competition and "promote alternatives to wire
line technology in the local telephone
market." He also said 1999 may be the first
year that an incumbent local exchange
provider (ILECs - baby Bells and GTE) opens
up its own network sufficiently to competition
and thereby gains access to the long
distance market.
The Associated Press reports that Bell
Atlantic may in fact be eligible to provide
long distance service in New York, though
the FCC is not commenting on this
possibility.
Kennard also said consumer protection
efforts will continue to increase, including
initiatives to "ensure consumer bills are
truthful, clear and understandable; show zero
tolerance for perpetrators of consumer fraud
such as slamming and cramming; (and)
simplify the process for consumers to file
complaints by phone or over the Internet."
The FCC also is expected to release a
dispute resolution to the reciprocal
compensation argument. Originally pushed
for by the ILECs, reciprocal compensation
requires local phone company "A" to pay a
fee to local phone company "B" when a
customer of "A" makes a call to a customer
of "B." Since many newer competitive local
exchange carriers (CLECs) count Internet
service providers as their customers, many
of these calls have wound up being to
modem banks, which, of course, do not
make outgoing phone calls. Therefore, many
ILECs are obligated to pay large amounts of
cash to the newer companies.
Rulemaking at the FCC could change this
process, especially by making all Internet
access calls subject to long distance rules
instead of local rules.
Meanwhile, more than 20 states have upheld
the current reciprocal compensation
arrangement in court, and the FCC has said
it would not interfere with those decisions.
Baby Bells and other ILECs, however, have
complained that they should not owe the
reciprocal compensation fee, and have
refused to pay out. If the FCC then makes
long distance rules apply to Internet access,
the ILECs have said, they will consider their
obligation to pay to be nullified. |
