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To: Stephen B. Temple who wrote (1986)	11/25/1998 8:02:00 AM
From: Stephen B. Temple	Respond to of 3178

Go ahead overcharge, ITSPs are heading for the border! This would make a great partical press-release in the area with ___?<gg> FOCUS-U.S. FCC knocks Sprint, Telmex venture@ (Adds AT&T and MCI WorldCom comment, grafs 9-12) November 25, 1998 WASHINGTON (Reuters) - Reuters [BR] via NewsEdge Corporation : The Federal Communications Commission Tuesday dealt a sharp blow to a joint venture between Sprint Corp. and Telefonos de Mexico, saying Americans calling Mexico were overpaying by $700 million a year. FCC Chairman William Kennard said U.S. consumers calling people in Mexico were paying far more than they would if Telmex had lowered rates as promised in August when his agency conditionally approved the deal. ''We granted the Sprint-Telmex application in a spirit of good faith,'' Kennard said. ''But I'm running out of patience. We want to be good neighbors with Mexico, it's important that we have a good relationship with that nation, but we can't do it at the expense of U.S. consumers.'' Telmex, the former government-owned monopoly carrier, had promised to lower the rate it charged carriers in other countries for completing calls in Mexico to 19 cents per minute by Jan. 1, 2000. Mexico also was to eliminate a number of other anti-competitive policies, such as a 58 percent surcharge on inbound international calls. But most of the practices remain in place, and Telmex had proposed lowering its so-called settlement rate by only a few cents until Jan. 1, 2000. ''I wish I had a dollar for every time someone has told me in the last year that the surcharge is going to be reduced,'' Kennard said. ''It's always tomorrow, the next week, next month, and it's just not happening and it's having a devastating impact on competition.'' Sprint said the FCC ought to take its complaints to the Mexican government, but not punish the joint venture. The joint venture and Sprint ''have little, if any, control over the conditions with which the FCC is dissatisfied,'' Sprint said in a statement. The companies ''appear to be caught in a much larger struggle between the U.S. and Mexican governments over settlement rates and the conditions for competition in Mexico.'' The FCC said it acted following complaints from the top two U.S. long-distance companies, AT&T Corp. and MCI WorldCom Inc., that Telmex was continuing to discriminate against other companies in Mexico. AT&T applauded the ruling, saying it was the kind of tough action needed to ensure a level playing field. ''We applaud the FCC and particularly Chairman Bill Kennard for cracking down on Telmex's anti-competitive abuses, which are carried out with the acquiescence of the Mexican government,'' it said in a statement. ''This is the kind of tough and decisive action that is needed to help level the playing field for carriers trying to crack the Mexican market.'' MCI accused Telmex of repeatedly breaking promises and said the Mexican government should step in to ensure free competition in Mexican telecommunications. ''It's time for the Mexican authorities to take firm and rapid measures to apply regulatory controls on Telmex with the aim of ensuring that a real competition is able to develop in Mexico,'' said Michael Rowny, Director of Alliances and International Joint Ventures for MCI WorldCom. On Tuesday, the FCC rejected the company's interim settlement rates of 37.5 cents for 1998 and 34.5 cents for 1999. The agency also told Telmex and Sprint to address the delay in completing market-opening reforms within 30 days or face further sanctions, including possibly revoking authority for the joint venture. In August, the FCC approved the venture, known as Telmex-Sprint Communications LLC, over the objections of AT&T and MCI but said its OK was conditioned on continued reforms to allow more competition. The joint venture offers long-distance service between the United States and Mexico and other international locations. REUTERS@ [Copyright 1998, Reuters]