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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: SteveG who wrote (3711)	2/5/1998 1:35:00 AM
From: SteveG	Read Replies (1) \| Respond to of 12468

<A> The Telecommunications Act: Keep The Faith (Are these scared noises by AT&T?) DALLAS -- Following is AT&T's position re. the Telecommunications Act of 1996, on its second anniversary, and an analysis of what remains to be done to make competition work in the local phone market. As the Telecommunications Act of 1996 undergoes its obligatory second anniversary scrutiny, critics will no doubt observe that while competition for local phone service has yet to start -- especially for residential customers -- legal wrangling over the Act hasn't stopped. While no one should be pleased by the progress so far, now would be the worst time to give up on the Act. In fact, now is the time for regulators and policy makers to let the Act work by making sure it's implemented properly. Local telephone companies have been entrenched monopolies for the past 100 years and it'll take more than a couple of years to tear down the barriers so others can compete. The Act simply needs more time. So why hasn't the Act been as productive as everyone wanted? First, a bit of history. Before the Act was signed into law on February 8, 1996, telecommunications policy largely rested with Judge Harold Greene, who presided over the consent decree that broke up the old Bell System. Under the decree, the local Bell telephone companies were barred from entering new lines of business, including long distance, for good reason. Decades of Bell system behavior had shown that phone monopolies have every incentive to stifle competition if allowed into competitive markets. But the local Bell monopolies began to chafe under those restrictions and soon began making the argument in Washington that telecom policy should be determined by Congress, not a federal judge. Eventually, after years of industry lobbying, the Telecom Act emerged. The warring industry heavyweights, the local Bell companies vs. the long distance companies, saluted the Act at its passage. Both sides agreed it set the right course, giving the Bells an entry into long distance after they opened their local markets to competitors. Praise for the Act was downright effusive, such as SBC Chairman Ed Whitacre's statement soon after it passed that the Act "is good for consumers, it is good for SBC, and it is good for our shareholders." How do both sides feel 24 months later? We at AT&T believe the Act is fundamentally sound. The Bells? Look no further than their legal departments, which have unleashed a barrage of court challenges in the past year to try to overturn, disrupt, delay or gut the Act. The latest example was the New Year's Eve decision by a federal court judge in Texas, who sided with the Bells' argument that they are being unconstitutionally punished by the Act. It's inexplicable to us that a law that the Bells ardently supported and that gives them a clear path to enter long distance could also constitute unfair punishment. Obviously, it cannot. Why does the Act deserve more time to work? First of all, breaking open 100-year-old monopolies wasn't going to be easy even if the Bells had decided to cooperate. A monopoly just doesn't give up its power overnight. Second, while progress has been slow, companies like AT&T have spent huge sums to enter local markets and plan to spend much more. We've already spent about $4 billion over the past two years on our entry efforts and we've just announced plans to acquire Teleport Communications Group (TCG), with its local service operations for business customers, in a deal valued at $11 billion. Third, the government, and more importantly customers, cannot be held hostage to the Bell companies incessant litigation and delaying tactics. To change the Act now would reward the Bells for this conduct and chill hopes of real choice for local service. So the Act isn't at fault. The Bells and the other big local monopolies like GTE are. If they hadn't challenged the Act itself and every Federal Communications Commission effort to implement it, we'd probably have pockets of viable local phone competition now. Policy-makers, including the FCC and members of Congress, should resist pressure to give in to the Bells or to reward their efforts to undercut Congress' intent in passing the Act. Instead, they should hold the Bells to their word when they agreed to support the Act just two years ago. The bottom line of the Telecom Act is the right it promises for all Americans to choose their own local phone service provider, instead of remaining captive customers of the local phone company monopolies. We've all seen the vast expansion of choice due to competition in telecommunications equipment and long distance service; that's what the Telecom Act will deliver for local service as well. Instead of giving in to the monopolists, we need to give the Telecom Act the time and support it needs to work. /CONTACT: Jim Van Orden, Media Relations Director of AT&T, 972-778-4936/