RBOC counter-point: <A> Two Years After Telecom Act - Local Markets Open, Long Distance Markets Shut Tight; Bell Atlantic Executive Urges New FCC to Unleash Real Competition Now
WASHINGTON -- Two years after the passage of the Telecommunications Act, only half the goals of the landmark legislation are accomplished, a Bell Atlantic executive told the Economic Strategy Institute today.
Local telephone markets are open to scores of competitors today, thanks to aggressive efforts by Bell Atlantic and other regional companies, according to James G. Cullen, president and CEO of Bell Atlantic's Telecom Group. Meanwhile, he said, the nation's long distance markets continue to be locked tight, and customers are held in the iron grip of AT&T, MCI and Sprint.
"While WorldCom, MCI, AT&T and others are free to compete anywhere, five of this country's most capable companies are still in jail, serving an indeterminate sentence for violations committed by our parent, AT&T, over a generation ago," Cullen said. "Public policy -- especially at this critical time in our industry, must encourage as many players and competitors as possible."
Cullen called on the new Federal Communications Commission (FCC) to abandon the outmoded policies of the past and let the Telecom Act work. He said a new approach will allow Bell Atlantic to meet customer demands and keep pace in an industry experiencing an explosion in technology, growth, mergers and new alliances.
Debunking six myths perpetuated by MCI and the other long distance giants is critical to understanding the true state of competition in local and long distance markets, Cullen noted:
Myth No. 1: Local markets are closed to competition. "Any competitive carrier can offer a full suite of local communications services to any home or business in our territory through a number of means," Cullen said. "New York is a prime example, where over 400,000 customers now get their phone service from one of our competitors."
Myth No. 2: Bell Atlantic is dragging its feet in opening up local networks. Cullen noted that Bell Atlantic has every incentive to open local markets ASAP and qualify to enter long distance markets. "That's the entire basis of the Telecom Act," he said. The company is spending $1 billion to complete the job.
Myth No. 3: The only true test of open markets is that competitors offer local residential service. Cullen argued that the long distance giants have every incentive not to provide local residential service. "It allows Bell Atlantic into long distance," he said. "Only the top 10 to 20 percent of residential customers are attractive to competitors, and most of those, as WorldCom recently pointed out, are less attractive than most business accounts."
Myth No. 4: Consumers need protection from local providers offering long distance service. Cullen pointed out that GTE, Sprint, and Southern New England Telecommunications (SNET) all are providing local and long distance service to customers. In Connecticut, SNET is saving its customers $7 a month on their long distance rates.
Myth No. 5: Consumers need to be protected from the Bells offering Internet transport. "Three of the nation's top four long distance providers control the bulk of the nation's Internet traffic," Cullen said.
"If you've been bothered by sluggish Internet connections, you might ask what public policy benefit is created by barring Bell Atlantic from investing in long distance Internets or Extranets to serve our customers."
Myth No. 6: Regional Bell companies like Bell Atlantic are slow and inefficient monopolists who are unable and unwilling to compete. "My response is, give us a chance," Cullen said. "Open all markets -- the new FCC can make it happen. It's time to re-examine public policies that focus on the 1970s -- and move us forward."
The new Bell Atlantic -- formed through the merger of Bell Atlantic and NYNEX -- is at the forefront of the new communications, information and entertainment industry. With 40 million telephone access lines and 5.8 million wireless customers worldwide, Bell Atlantic companies are premier providers of advanced wireline voice and data services, market leaders in wireless services and the world's largest publishers of directory information. Bell Atlantic companies are also among the world's largest investors in high-growth global communications markets, with operations and investments in 21 countries.
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/CONTACT: Shannon Fioravanti of Bell Atlantic, 703-974-5455, or
shannon.l.fioravanti@bell-atl.com/
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