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To: ALTERN8 who wrote (17385)12/1/1999 1:01:00 PM
From: 10K a day  Read Replies (2) | Respond to of 29970
 
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RTHM
34 9/16
-11/16

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Wednesday December 1, 11:48 am Eastern Time
Company Press Release
SOURCE: Rhythms NetConnections Inc.
Texas PUC Finds SBC Discriminates Against Rhythms and Other DSL Competitors
Commission Forces SBC to Dismantle Barriers to Rhythms' Ability To Meet Customer Needs
ENGLEWOOD, Colo., Dec. 1 /PRNewswire/ -- Based on the first thorough examination anywhere in the nation of a telephone company's own internal documents, the Public Utilities Commission of Texas, in a landmark decision, found yesterday that SBC Communications Inc.'s attempts to limit competition based on artificial ''technical'' explanations were not justified. The Texas Commission ordered SBC to discontinue those policies and practices, which the Commission found impeded competition. The Commission's decision was based on evidence gathered by Rhythms NetConnections Inc. (Nasdaq: RTHM - news) during more than 25 depositions of SBC's technical experts, thousands of pages of documents and internal SBC electronic messages. Rhythms is a North American provider of digital subscriber line (DSL)-based, high-speed Internet access and networking solutions.

''This order allows customers to select which broadband services and providers they want, instead of allowing SBC to decide for them,'' said Steve Stringer, President and COO of Rhythms. ''The clear winners here are broadband customers in Texas. We fully expect that when other state commissions look at similar evidence, broadband customers in their states will be winners as well.''

''This decision sends a clear signal that the state commissions have the expertise and commitment to look behind telephone company slogans to find the truth buried in the telephone company documents,'' said Jeffrey Blumenfeld, Chief Legal Officer and General Counsel of Rhythms. ''SBC has been claiming for more than a year that its limits on competitors were based on serious technical concerns. Now we know from their own documents that these were just 'electro-political engineering' excuses for anti-competitive policies and actions.''

Specifically, the Commission validated every position of Rhythms, and ordered that:

SBC must provide clean copper loops on demand;
SBC may not impose arbitrary length restrictions on loops for CLECs;
SBC must allow Rhythms to provide any DSL technology over loops
purchased from SBC;

SBC must dramatically lower SBC's conditioning charges to a range of $15 - 25, from SBC's proposed charges, which were roughly 40 times higher;
SBC must give competitors the same chance to use internal ordering and provisioning information that SBC gives itself;
SBC must provide information to CLECs on a timely, electronic basis so that customers can order services in minutes rather than days;
SBC must eliminate all efforts to segregate and reserve the best loops for itself for its own ADSL service;
SBC must dismantle all procedures that ensure competitors will be forced to pay conditioning charges to remove interfering devices from loops left over after SBC chooses the best loops for itself;
SBC must eliminate its costly, inefficient ''loop qualification'' screening process, and instead give competitors access to raw data regarding the technical characteristics of loops;
SBC must allow competitors to decide for themselves the best xDSL services to provide to customers, rather than imposing SBC's own internal criteria.
After this decision, SBC must remove the many forms of discrimination it has employed to erect barriers to competition, or to limit competitors' ability to provide service superior to those SBC chose to offer. The Commission ordered the parties to submit an interconnection agreement consistent with the decision by year's end.

About Rhythms

Rhythms NetConnections Inc. (Nasdaq: RTHM - news) is a North American provider of DSL-based, high-speed Internet access and networking solutions. Rhythms was chosen by FORTUNE magazine as one of its ''Cool Companies for 1999.'' Based in Englewood, Colo., Rhythms currently serves 33 markets, covering 56 MSAs. Telecommunications services for Rhythms are provided by Rhythms Links Inc., a wholly owned subsidiary of Rhythms. For more information, call 1-800-RHYTHMS (1-800-749-8467), or visit the company's Web site at www.rhythms.com.

This news release may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially because of various risks. These risks include risks associated with the demand and competition for the services and products to be sold by Rhythms, the continued availability of adequate financing to support our activities, the timing of roll outs in additional regions, the number of potential customers who could access such services, and our dependence on third parties for services such as providing collocation and transmission facilities, providing marketing and sales efforts, and supplying and installing equipment. For an expanded discussion on these and additional risks associated with Rhythms' business, please see the documents filed by Rhythms NetConnections Inc. with the U.S. Securities and Exchange Commission.

SOURCE: Rhythms NetConnections Inc.