No playground-level snipe was intended.
I didn't intend that to be directed at you but the infamous MacLellan who never misses a chance to make himself look small.
The only contract announcement I've heard mentioned is the one Alan mentioned at the AGM, saying it would come next quarter. The PR set to come out could be anything. Of course I'm hoping one is the new EVP, but I've no knowledge that it is. At any rate, I would imagine the company will save the best for InterOp.
For those who follow the machinations of the FCC, this came out in tonight's WSJ:
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The Wall Street Journal Interactive Edition -- October 13, 1998
Supreme Court Set to Review
FCC's Landmark Phone Order
By STEPHANIE N. MEHTA and EDWARD FELSENTHAL
Staff Reporters of THE WALL STREET JOURNAL
The U.S. Supreme Court Tuesday will review federal rules that were designed to open the $100 billion local-phone market to rival operators but that have largely been stymied by a logjam of litigation.
At issue is the Federal Communications Commission's landmark "interconnection" order. Essentially a playbook for implementing the Telecom Act of 1996, the order requires the local companies -- such as the Bells and GTE Corp. -- to offer discounts to rivals seeking to use their networks, with much of that pricing jurisdiction going to the FCC and not the states.
Much of the order was suspended in September 1996 and the following year was thrown out by the Eighth Circuit Court of Appeals in St. Louis. The states then began setting their own pricing rules, which prompted even more litigation: In more than 100 cases, the Bells or their rivals have appealed those pricing agreements to federal district courts.
The high court's ruling, due next spring, could smooth the competitive landscape by assigning final pricing authority to either the states or the FCC. But the court must also decide whether the Bells can be forced to "recombine" all of their network elements (switches, lines and the like) and offer them at deep discounts to rivals -- an eventuality that could give the big long-distance carriers a quick way to deliver services to residential customers.
It is unlikely that the court's ruling alone will open the floodgates to widespread competition for local phone services. "Even if we win at the Supreme Court, the incumbents have shown they can and will do anything to keep from releasing their stranglehold on the local telecommunications market," says Timothy Price, president of the U.S. operations of MCI WorldCom Inc., which is a party to the litigation.
'Cherry-Picking'
The Bells counter that they steadily have been losing business to competitors, including MCI WorldCom, that are "cherry-picking" the more-profitable corporate customers. "There's competition where there is money to be made," says James Ellis, general counsel of SBC Communications Inc.
The Supreme Court's ruling isn't likely to clear away all the litigation related to the Telecom Act, either. The Eighth Circuit Court of Appeals didn't take a position on the FCC's price-setting methodology, which slashes prices for network elements by 70% in some cases; it simply said the agency didn't have pricing authority. So even if the justices uphold the FCC's authority, further challenges to the rules themselves are inevitable.
In addition, further litigation is likely to emerge over restrictions in the act on Bell-company entry into the long-distance business. Additional lawsuits could also sprout from the debate over state mechanisms for subsidizing phone service for isolated rural customers.
Rep. Billy Tauzin, a Louisiana Republican, who supported the Telecom Act, and others in Congress are talking about possibly reviewing the legislation, a move that could further damp the impact of the Supreme Court's ruling. "We owe it now to the consumers of America to go back in and be very precise about what we meant," says Rep. Tauzin. But with Congress preoccupied with impeachment proceedings, many observers consider such action unlikely.
At the heart of the dispute are questions over how local competition will materialize. The local telephone infrastructure, which extends to virtually every home and business in the country, would be impossible for even the biggest carriers to replicate. To facilitate competition in the residential market, the FCC's interconnection order sought to create a national pricing structure that would allow rival carriers -- the large long-distance companies in particular -- quick entry into the local residential markets.
But the Bell telephone companies believe local competition in the residential market will be slow to materialize, even if the Supreme Court decides to reinstate the FCC's rules. The Bells have long maintained that rivals are staying out of the residential market because it is more profitable to serve businesses. "If the our opponents are successful in the Supreme Court with regard to the [recombined network element] platform, that still would only result in local competition for business customers," says William B. Barfield, associate general counsel for BellSouth Corp.
Not Waiting for Ruling
Furthermore, some executives believe that the free market -- not regulation -- has started to chip away at the local-competition logjam. Competitive local-exchange carriers have started to grab significant market share from the incumbents. "We're not sitting on the edge of our seats, waiting for the Supreme Court ruling," says Jack E. Reich, chief executive officer of e.spire Communications Inc., a Bell rival.
And rather than wait for the Bells to create a pathway for rivals, AT&T Corp. has agreed to acquire cable operator Tele-Communications Inc. as an alternate way to reach homes. MCI has merged with WorldCom, which has amassed local assets over the years through its aggressive acquisition strategy.
"The industry has moved on with its life," says Scott Cleland, a telecommunications-policy analyst in Washington. "The resale vision on a grand scale has died a quiet death." Mr. Cleland, however, is predicting that the Supreme Court will uphold the states' right to set prices for the local carriers' network elements.
Indeed, some states are making progress in opening their markets to competition. New York, for example, extracted FCC -- like discounts and recombinations from Bell Atlantic Corp. In exchange, the state's public-utilities panel has signaled conditional support for Bell Atlantic's application to offer long-distance services in New York.
The Supreme Court case combines eight different lawsuits involving almost every major provider of traditional local and long-distance phone service. Briefs have been filed by a slew of the country's most prominent lawyers, including Harvard Law School professor Laurence Tribe, telecommunications specialist Michael Kellogg, former White House counsel Lloyd Cutler, Washington lawyer Paul Cappuccio and First Amendment advocate Bruce Ennis.
The court has slated two hours for arguments, double the normal allotment. U.S. Solicitor General Seth Waxman will argue in favor the FCC rules, sharing time with Messrs. Ennis and Carpenter. Prof. Tribe and GTE general counsel William Barr, along with Diane Munns, a lawyer for the state of Iowa, will argue for the Bell companies.
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