Bell Atlantic Sues Maryland Public Service Commission Over Pricing Order

Bell Atlantic Sues Maryland Public Service Commission Over Pricing Order

Company Calls Order Major Blow to Fair Competition

December 3, 1998


Sandra Arnette,
(410) 393-7109

BALTIMORE -- Bell Atlantic - Maryland late yesterday filed suit in
federal court against members of the Maryland Public Service Commission
(PSC) to reverse a recent commission order that violates the Federal
Telecommunications Act of 1996 . The order is directly at odds with an
earlier decision of the United States Court of Appeals for the Eighth
Circuit which rejected the Federal Communications Commission's attempt
to do the same thing.

In the filing, made in United States Federal District Court in Baltimore,
Bell Atlantic said the decision has dealt a sharp blow to fair competition in
Maryland and undermined Congress' intent when it passed the
Telecommunications Act of 1996.

The commission, as well as Bell Atlantic's competitors, were all parties to
the earlier federal case, in which the Eighth Circuit ruled that regulators
cannot obliterate the statutory distinction between competitors reselling
Bell Atlantic's services and competitors using Bell Atlantic's network to
provide their own services. In the words of the Eighth Circuit, any such
requirement "cannot be squared with" the federal Telecommunications Act.

"Instead of fostering investment in the state's telecommunications market,
the PSC has made it clear that Bell Atlantic's competitors in Maryland do
not have to invest or build their own networks," said Sherry F. Bellamy,
president and CEO of Bell Atlantic - Maryland. "That is not good for
Marylanders, and it is not what Congress intended."

The PSC's order, which overturned its own hearing examiner's
recommendation, declares that the PSC is not bound by federal law or the
Eighth Circuit decision. "As the hearing examiner found, the PSC has no
authority to take such action after the Eighth Circuit ruled, and the PSC's
actions must be consistent with federal law," said Bellamy.

"The PSC decision would force Bell Atlantic to subsidize our competitors'
entry into the local market by allowing them to use our network at rates
that are significantly below our costs or the costs they would incur if they
built their own network.," said Bellamy. "This action is designed to benefit
a handful of companies -- including long distance giants AT&T, MCI-
WorldCom and Sprint -- who need no such subsidies. It is flatly against
the public interest, it's illegal, and it's patently unfair to Bell Atlantic."

Bell Atlantic is at the forefront of the new communications and information
industry. With 42 million telephone access lines and eight million wireless
customers worldwide, Bell Atlantic companies are premier providers of
advanced wireline voice and data services, market leaders in wireless
services and the world's largest publishers of directory information. Bell
Atlantic companies are also among the world's largest investors in high-
growth global communications markets, with operations and investments in
23 countries.