MCI asks PSC to settle money dispute with Bell It wants regulators to decide how much it will pay as part of shift

August 28, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

MCI Communications Corp. yesterday asked the state Public Service Commission to settle the company's dispute with Bell Atlantic Corp. over how much it should pay as part of the shift toward free competition in the market for local telephone service.

MCI is the fourth company to ask Maryland regulators to arbitrate the amount new competitors should pay the traditional local phone monopoly for specific services newcomers will have to buy from Bell Atlantic during at least the early stages of local phone competition.

The sharing of phone networks, a form of legally enforced rental arrangement, is the way the new federal telecommunications law proposes to speed up competition. It gives new local competitors a choice: Build your own call handling networks, buy the local Bell company's service wholesale and resell it to consumers, or build partial networks and buy specific services from the traditional monopoly.

The law allows new competitors to enter the local phone markets before they have enough business to justify the investment needed to complete their own networks, on the theory that partial competition is better than none. The approach is similar to the way the long-distance industry was deregulated during the 1980s. "While MCI is now providing local service to businesses in the Baltimore area, critical issues must be resolved to expand that service," said Jay A. Young, regional policy director for Washington-based MCI.

Specifically, MCI wants a cut in the rate it pays Bell Atlantic to complete calls between customers who use MCI for their local phone service and other customers who use Bell Atlantic. That connection charge now ranges between 0.3 cents and 0.5 cents per minute, said Young, who declined to say how big a cut MCI will seek when the commission actually hears the case.

Another big issue is the wholesale rate MCI pays for the wholesale service, which it will sell mostly to residential customers initially. Bell Atlantic has held out for discounts of less than 10 percent, while MCI contends that new federal rules require wholesale rates 17 percent to 25 percent below retail.

AT&T Corp., MFS Communications Co. and Teleport Communications Group Inc. have all asked the PSC to arbitrate their disputes with Bell Atlantic over the terms of their deals. The commission has until November to act, Young said.

Bell Atlantic said it had no comment on MCI's filing because its attorneys had not yet had a chance to review it. "It's all in an effort to be competitive, and we expect that," Bell Atlantic spokeswoman Sandra Arnette said.

PSC spokeswoman Chrys Wilson said it's too soon to know how much consumers will save as a result of the new arbitrations.

Pub Date: 8/28/96

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