03.05.1996Corporate

Bell Atlantic: bill and keep runs contrary to telecommunications act

Arlington, VA -- A proposal to allow wireless carriers to get a free ride on the land-based local telephone networks would be contrary to the provisions of the Telecommunications Act of 1996, Bell Atlantic asserted yesterday in a filing before the Federal Communications Commission (FCC).

"This proposal is unquestionably at odds with the newly adopted legislation," said Edward D. Young III, Bell Atlantic vice president and associate general counsel. "The new law directs telecommunications companies to negotiate agreements, and the states to approve them, but under this proposal the wireless carriers would have the FCC decide the issue for us. It's clearly a bad idea."

"Furthermore, what the wireless carriers propose is that for every 85 calls we complete for them, they complete 15 calls for us," Young continued. "How is that fair?"

Bell Atlantic argued in its response to the proposal known as "bill and keep" that any attempt to mandate an agreement between telecommunications carriers virtually eliminates the opportunity for negotiation of compensation arrangements.

Such a mandate would also usurp the authority given the states under the new law to review and approve these negotiated agreements.

In support of the Bell Atlantic filing, Robert Crandall, noted economist at the Brookings Institution in Washington, D.C., states that mandating bill and keep would "violate fundamental economic principles and basic property rights." It would be economically inefficient, said Crandall, and "distort both purchasing and investment decisions."

The wireless companies' proposal mandates bill and keep interconnections between commercial mobile radio service providers, which include wireless companies, and local phone companies. Today, wireless companies pay the local exchange company a small fraction of their retail rates to carry their calls to completion. For Bell Atlantic, it amounts to roughly 1.5 cents per minute. Bill and keep would allow the wireless companies to bill their customers for use of their service without paying to use the Bell Atlantic wired telephone network.

Bell Atlantic Corporation (NYSE: BEL) is at the forefront of the new communications, entertainment and information industry. In the mid-Atlantic region, the company is the premier provider of local telecommunications and advanced services. Globally, it is one of the largest investors in the high-growth wireless communication marketplace. Bell Atlantic also owns a substantial interest in Telecom Corporation of New Zealand and is actively developing high-growth national and international business opportunities in all phases of the industry.

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