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To: Anthony Wong who wrote (3393)	10/14/1998 12:33:00 AM
From: Anthony Wong	Read Replies (1) \| Respond to of 11568

BellSouth's Latest Long-Distance Bid Blocked by FCC (Update2) Bloomberg News October 13, 1998, 7:20 p.m. ET BellSouth's Latest Long-Distance Bid Blocked by FCC (Update2) (Adds details, analyst comments.) Washington, Oct. 13 (Bloomberg) -- U.S. regulators rejected BellSouth Corp.'s latest bid to enter the $70 billion-a-year U.S. long-distance telephone market, saying the company's local phone markets still aren't open to competition. The Federal Communications Commission, in turning down the company's second application to offer long-distance service to customers in Louisiana, said BellSouth had met only six of the 14 competitive steps required to prove its local phone market is open to competitors. The decision marks the fifth time the FCC has nixed a Baby Bell's bid to sell long-distance service in its own region. The failure to approve any such application has sparked criticism from legislators who say the agency keeps moving the bar while consumers are shortchanged. FCC Chairman William Kennard, for his part, said today's decision offers the most comprehensive road map so far and should guide future long-distance applications. The agency is ''trying to respond to this ongoing criticism that the FCC is leaving the Bells in the dark,'' and ensure that future applications ''are more serious in the eyes of the commission,'' said Paul Glenchur, an telecommunications analyst with Charles Schwab & Co.'s Washington Research Group. Yet the FCC's road map may be bumpy for the Bells, said Scott Cleland, managing director of Legg Mason Inc.'s Precursor Group. ''It creates more certainty so that the Bells don't feel the goal posts are being moved on them all the time,'' he said. ''However, the detail can create surprises of new requirements that people hadn't been aware of.'' Wireless Service Eyed The sweeping telecommunications law enacted in 1996 allows Baby Bells to offer long-distance service to customers in their regions only if they convince the FCC they've fully opened their local phone markets. The failure to approve any Bell's application has fueled congressional and company complaints that the FCC's standards are too rigid. ''Louisiana customers continue to be denied the benefits of lower prices for long-distance calls,'' Sid Boren, a BellSouth spokesman, said as the FCC found BellSouth didn't meet all the market-opening conditions. ''Competition in local phone markets is alive and well in BellSouth's region.'' Even as the FCC rejected BellSouth's bid, the agency said next-generation wireless phone service, known as personal communications service or PCS, could be a viable competitor in the local phone market. That's key because the Bells must prove to the FCC that they're facing real competition for both residential and business customers before they are allowed to break into the long-distance business in their regions. Another alternative is to show the FCC that they've opened their local market, but no one wants to compete. The FCC released its decision after the stock market closed. Shares of Atlanta-based BellSouth rose 2 1/2 to close at 77 7/16. Checklist The interpretation of the 14-point checklist the Bells must meet to show they face competition is a major point of contention between the companies and federal regulators. The FCC ruled against BellSouth's first application to offer long-distance in Louisiana last February. At the time, the FCC spelled out specific actions the company needed to take to ensure Louisiana consumers would really benefit, according to Jonathan Sallet, chief policy counsel for MCI WorldCom Inc., which opposes BellSouth's entry into the Louisiana long-distance market. BellSouth reapplied, saying it had taken new steps to encourage competition in the state. Louisiana regulators agreed. Yet while FCC must consider state regulators' recommendations, it also must weigh the findings of the Justice Department -- and that federal agency said BellSouth's latest Louisiana proposal fell short in key ways. The FCC found, among other things, that BellSouth had still failed to give new competitors access to key computer systems that process customer service orders. It also said the Baby Bell hadn't proved that competitors could easily lease pieces of BellSouth's network, like lines going from a customer's home to the routing system, on ''reasonable'' terms and conditions, as required by the telecommunications act. Court Fight ''For the third time in less than a year, BellSouth has flunked the local competition test,'' Sallet said. ''In baseball, fans would have called BellSouth's performance a strikeout.'' BellSouth ''is confident it can obtain FCC approval of the other checklist items fairly quickly,'' Boren countered. BellSouth and SBC Communications Corp. are fighting the FCC in court, challenging provisions of the Telecom Act that keep them out of the long-distance market. Legislators in Congress have pressed the FCC to approve a Baby Bell application to encourage the competition Congress envisioned when it passed the landmark 1996 telecommunications law. Senate Commerce Committee Chairman John McCain, an Arizona Republican, and others say the FCC's standards in reviewing long- distance applications are too rigid. Last week, Representative Billy Tauzin, a Louisiana Republican and chairman of the House telecommunications subcommittee, introduced a bill that would limit the FCC's ability to block the Bells' efforts to enter the long-distance market and give much of that decision-making power to state regulators. McCain has introduced similar legislation.

To: Anthony Wong who wrote (3393)	10/14/1998 12:36:00 AM
From: Anthony Wong	Read Replies (1) \| Respond to of 11568

AT&T Loses 5.3 Points of Market Share as 26 Mln Homes Switch Bloomberg News October 13, 1998, 4:44 p.m. ET AT&T Loses 5.3 Points of Market Share as 26 Mln Homes Switch New York, Oct. 13 (Bloomberg) -- AT&T lost 5.3 percentage points of the $70 billion-a-year long-distance market as more than 26 million U.S. homes switched services this year, 2 million more than last year, the Yankee Group said. The shifts benefited smaller carriers like Excel Communications Inc., GTE Corp., and Qwest Communications International Inc., said Yankee Group, a Boston-based consulting firm that analyzes telecommunication markets. Companies other than the ''Big Three'' of AT&T, MCI WorldCom and Sprint now account for more than 20 percent of the market, it said. New York-based AT&T was the long-distance carrier for 62.2 percent of the 2,000 homes that participated in the survey, which was completed earlier this week. MCI WorldCom was second with 12.3 percent, and Sprint came in third with 5.1 percent. ''The company has 16 million customers that spend less than $3 a month in long distance calls,'' said Brian Adamik, Yankee's senior vice president, and AT&T is trying to shed such customers. ''To make them more profitable, it charges them a $3 fee, which a lot of customers are not pleased to pay and prefer to switch to other carriers,'' he said. ''AT&T made a decision of retaining valuable customers who have larger bills with us (rather) than the ones leaving. We've been successful in doing that,'' said Mark Siegel, an AT&T spokesman. He said it's hard for a company with 70 million customers to draw general conclusions from a survey of only 2,000 people. Excel Communications, GTE, and Qwest/LCI benefited both from AT&T's decision to cast off less-profitable accounts and from their own aggressive marketing efforts, the Yankee Group said. These efforts include television, print, direct mail and Internet advertising, and direct calls in which the companies offer lower fees to customers. AT&T's shares rose 1/4 to 58 7/8. --Karina Paladin in the New York newsroom (212) 312-2300 /rw