Bell Atlantic Executive Challenges Regulators to Stick to Intent of Telecommunications Act

Bell Atlantic Executive Challenges Regulators to Stick to Intent of
Telecommunications Act

December 6, 1996

Media contacts:

Michel Daley 202-392-1021


ARLINGTON, Va. -- Bell Atlantic Vice President and
Associate General
Counsel Edward
D. Young, III
today challenged newly-elected state
legislators to forego Federal Communication Commission (FCC)
interconnection guidelines, and to get back on track with the intent
of the Telecommunications Act of 1996.

Speaking at an American Legislative Exchange Council conference this
afternoon in Washington, D.C., Young said, "Congress gave the FCC
authority to develop certain standards and guidelines applicable to
all networks, and the states were entrusted with overseeing prices and
ensuring potential competitors acted in good faith. At this
point...it is fair to say that things have not gone as Congress
intended. Instead of reducing regulation on telecommunications
companies...the FCC issued a 700 page order that inserted itself into
the state's price-setting process."

Young said the FCC prescribed a formula for states to use that ignores
actual costs and investment strategies that local companies and state
commissions jointly developed over the past 60 years. "The FCC
imposed a one-size-fits-all solution in an effort to artificially jump
start competition, instead of allowing the state commissions to work
with companies to develop solutions that met the specific needs of

The solution, Young said, is for state regulators to "exercise their
authority, empowerment and legal responsibility to ensure that the
intent of Congress is carried out." This will promote a
"flurry of
competitive action up front, and ongoing competition among healthy
industry players."

Young said large, profitable companies, such as AT&T, MCI and Sprint,
benefit the most from the FCC's methodology and philosophy, at the
same time these companies are raising rates while paying lower access

"Under the FCC formula, no competitor in his or her right mind would
ever construct their own network," Young said. "It's like
McDonald's to make space available in its store to Wendy's at prices
so low that Wendy's would never build its own store."

"The regional Bell companies have cut access charges for long
companies by 73 percent since 1985, and since 1994, AT&T, MCI and
Sprint have all raised their basic rates--by as much as 20 percent
according to some studies."

In closing, Young said that state commissions must ensure that policies
that promote infrastructure construction and economic development
continue. He added, commissions must also take steps to allow local
companies to offer long-distance service quickly--to bring real
competition to the market--and must adopt rules that do not give
competitors a free ride at the expense of their constituents.

"Taking this long-range view is the only way to ensure that the
consumers you represent--not the long-distance companies--will be the
ultimate beneficiaries of the Telecommunications Act of 1996," Young

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