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Technology Stocks : Voice-on-the-net (VON), VoIP, Internet (IP) Telephony -- Ignore unavailable to you. Want to Upgrade?

To: Stephen B. Temple who wrote (2320)	1/8/1999 10:58:00 AM
From: Stephen B. Temple	Read Replies (1) \| Respond to of 3178

FCC Telco Mega-Merger Decisions Due In Six Months WASHINGTON, DC, U.S.A., 1999 JAN 7 Federal Communications Commission (FCC) Chairman William E. Kennard said his agency should decide the fates of three gigantic telecommunications mergers by the middle of this year. Kennard, who today detailed the FCC's agenda for the year on the same day the agency moved into its posh new digs at the Portals office building in Southwest Washington, D.C., specifically said he expects the $48 billion merger between AT&T Corp. [NYSE:T] and Tele- Communications Inc. [NASDAQ:TCOMA] to be very "exciting." He would not comment on the other mergers between SBC Communications Inc. and Ameritech Corp., and between Bell Atlantic Corp. and GTE Corp. The Justice Department on Dec. 30 approved the AT&T-TCI merger, which is facing heated opposition from Internet service providers and other telecom companies because of AT&T's refusal to open up the TCI network to competing voice and data providers. AT&T plans to offer local phone and Internet services on TCI's network, with TCI subsidiary At Home Corp.'s @Home Network as the default Internet access package. US West, America Online Inc. [NYSE:AOL] and several other companies said the plans are anti-competitive if the TCI network remains closed. Kennard said the FCC agenda for this year should be to "promote competition, to foster new technologies, to protect consumers and to ensure that all American have access to... the communications revolution." Hinting at upcoming congressional committee scrutiny of the FCC and its effectiveness at promoting competition in the wake of the Telecommunications Act of 1996, Kennard also said the agency will contemplate major changes to its overall structure. A Senate Commerce Committee source recently said, this would be a priority for Commerce Committee Chairman John McCain, R-Ariz. "The top-down, command and control, regulatory model of the Industrial Age is as out of place in the new economy as the rotary telephone," Kennard said. "As competition and convergence develop, the FCC will continue to streamline its operations, eliminate unnecessary regulatory burdens and make it easier for the public to interact with the agency." To promote competition, Kennard said the FCC would reform access charge systems to "preserve affordable rates," take closer looks at merger proposals, promote video competition and "promote alternatives to wire line technology in the local telephone market." He also said 1999 may be the first year that an incumbent local exchange provider (ILECs - baby Bells and GTE) opens up its own network sufficiently to competition and thereby gains access to the long distance market. The Associated Press reports that Bell Atlantic may in fact be eligible to provide long distance service in New York, though the FCC is not commenting on this possibility. Kennard also said consumer protection efforts will continue to increase, including initiatives to "ensure consumer bills are truthful, clear and understandable; show zero tolerance for perpetrators of consumer fraud such as slamming and cramming; (and) simplify the process for consumers to file complaints by phone or over the Internet." The FCC also is expected to release a dispute resolution to the reciprocal compensation argument. Originally pushed for by the ILECs, reciprocal compensation requires local phone company "A" to pay a fee to local phone company "B" when a customer of "A" makes a call to a customer of "B." Since many newer competitive local exchange carriers (CLECs) count Internet service providers as their customers, many of these calls have wound up being to modem banks, which, of course, do not make outgoing phone calls. Therefore, many ILECs are obligated to pay large amounts of cash to the newer companies. Rulemaking at the FCC could change this process, especially by making all Internet access calls subject to long distance rules instead of local rules. Meanwhile, more than 20 states have upheld the current reciprocal compensation arrangement in court, and the FCC has said it would not interfere with those decisions. Baby Bells and other ILECs, however, have complained that they should not owe the reciprocal compensation fee, and have refused to pay out. If the FCC then makes long distance rules apply to Internet access, the ILECs have said, they will consider their obligation to pay to be nullified.