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To: Stephen B. Temple who wrote (1661)	10/27/1998 1:08:00 PM
From: Stephen B. Temple	Read Replies (1) \| Respond to of 3178

OT> BellSouth Files Comments on Access Reform October 27, 1998 ATLANTA, Oct. 26 /PRNewswire/ via NewsEdge Corporation -- Background: On October 5, the FCC released a Public Notice to update and refresh the record in the Commission's ongoing access reform proceedings. This action is initiated in light of petitions and ex partes filed proposing significant changes to the market based approach and the 6.5% X-factor adopted in the Access Reform Order and Price Cap Fourth Report and Order released originally in May, 1997. BellSouth (NYSE: BLS) is supportive of the FCC's market-based approach to access charge reform and is hopeful that the Commission doesn't consider actions that will move this process backwards. This would include the implementation of any prescriptive regulation on access charges or unnecessary adjustments to the X-factor. The following statement is in connection with BellSouth's comments (to be submitted Oct. 26) in response to the FCC's Public Notice. The following statement may be attributed to William (Whit) Jordan, BellSouth vice president, federal regulatory: "Price cap regulation is the starting point of a market-based approach for access prices -not the ending. If the FCC gives in to the calls for a " prescribed" approach to access charges, they will in one step undo the progress that has been made to reform regulation and take a giant step backward in time. While retro-music, clothes and cars may be chic; retro-regulation is not the way to establish public policy or the proper foundation for telecommunications in the 21st century. "The Commission's adoption of price cap regulation has provided the public with the benefits the FCC anticipated. Since price cap regulation was implemented in 1991, access prices have decreased by $11 billion nationwide. For BellSouth alone, access reductions amount to $2 billion. "If the FCC's ultimate intention is to again reduce access charges, we fear the only outcome will be to pad the big long distance companies' balance sheets while weakening investment in services for everyday American consumers. As noted in a recent study released by the United States Telephone Association, in spite of the reduction in their costs, the Big Three long-distance carriers - AT&T, MCI Worldcom and Sprint - all increased their residential long-distance rates from late 1997 to April 1998. "From 1991 to the first of this year, AT&T raised basic interstate rates over 70 percent and instituted a $3 per month surcharge on customers whom they decided do not make enough long distance phone calls. "Even as BellSouth has reduced its access charges, we continue to invest significant amounts in network infrastructure - to the tune of over $21 billion since 1991. If regulators want everyday consumers to reap the benefits of advanced, high-speed services, why are they attempting to reduce the return companies get on their investments? By doing so, regulators damage companies' incentive to spend money on networks to deliver to customers advanced services, such as faster Internet access through high-speed lines. "Dramatic reductions in access charges could hurt universal service. Any decision on access reform should only be made after the FCC resolves the critical issues surrounding the universal service fund. To try and solve these complex items concurrently increases the risk of negative impacts on telephone rates paid by everyday American consumers, particularly those in rural and high-cost telephone service areas. "Reductions in access charges will also directly impact incentives for other potential local providers to build their own facilities, undermining one of the key foundations of the Telecom Act - the emergence of viable facility-based competition for local telephone customers. "Finally, why not fully recognize that market forces have become the most reliable means of formulating access charges? Competition in local access is exploding. Today there are more competitive local exchange carriers (CLECs) than there are incumbent providers. CLECs took 5 percent of the business local exchange market in 1997 and will capture nearly 12 percent in 1999. It's clear flexibility, not regulation, in addressing access charges is the best method to continue competition and rational pricing." SOURCE BellSouth Corporation /CONTACT: John Schneidawind, 202-463-4183, or Joe Chandler, 404-927-7420, both of BellSouth Corporation/ [Copyright 1998, PR Newswire]