Telephone giants argue over local-market access Prices, terms at core of case before PSC


January 10, 1998|By Mark Ribbing | Mark Ribbing,SUN STAFF

Bell Atlantic Corp. and the big long-distance phone companies sharply disagree over how to let long-distance firms break into Maryland's local-service market.

Yesterday, the parties took their disagreement to the Public Service Commission.

This clash of telephone titans is all about market access. Long-distance providers like AT&T Corp. and MCI Communications Corp. want to compete with Bell Atlantic in providing local-calling service.

There's just one problem with that: Bell Atlantic owns most of the state's local-service network, and duplicating that network would both inefficient and expensive.

So, companies that want to compete with Bell Atlantic generally would have to buy access to elements of Bell Atlantic's network, such as wiring, switching facilities or calling features.

At yesterday's hearing, Bell Atlantic and the long-distance companies battled over the prices and terms of that access.

"Bell Atlantic proposes that network elements be ripped apart so that new entrants have to recombine them," MCI attorney Allen Freifeld said.

MCI and other would-be local-service providers want Bell Atlantic to put the network elements together into tidy bundles when it sells those elements to competitors.

In a statement to the commission, Donald E. Albert, a network director for Bell Atlantic, called this argument "simply a ruse to get cheaper resale prices." Bell Atlantic would prefer that competitors combine unbundled elements themselves.

AT&T regulatory director G. Blaine Darrah III called Bell Atlantic's plan "hocus-pocus" and said, "There's no valid technical reason for it. It just thwarts us from competing."

The state People's Counsel sided with the long-distance companies. Assistant People's Counsel Theresa Czarski called the bundling of elements "a necessary component for competition to take place in all areas of Maryland."

The Federal Communications Commission had required the Bell companies to bundle network elements. However, a federal appeals court in St. Louis overturned those rules in a series of decisions last year.

The court found that state utilities regulators, not the FCC, had the authority to decide the terms of local-services competition. That's why the big phone companies were pleading their cases yesterday before the PSC.

On Wednesday, AT&T announced its intention to merge with Teleport Communications Group Inc., a company that uses its own high-capacity network to provide local-calling services. However, TCG's lines serve businesses, not residences. At the hearing, AT&T's Darrah said the merger "doesn't solve the problem of how we reach residential markets."

Ray Bourland, the PSC's chief hearing examiner, said Joel M. Bright, the examiner at yesterday's hearing, had not issued a DTC formal decision. Bourland said Bright hoped to issue a decision within one week.

Bright's decision would bind the parties unless the commission decides the case should go before more than one hearing examiner. Bourland said that such a procedure is rare.

Pub Date: 1/10/98

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