Businesses Pay the Price of Outdated Telecommunications Regulation

Businesses Pay the Price of Outdated
Telecommunications Regulation

Bell Atlantic Asks FCC to Drop Price Restraints
in White-hot Market for Special Access Services

January 20, 1999


Susan Butta,

WASHINGTON -- Businesses are denied the best deals on
telecommunications services used for such things as Internet access and
data communications because outmoded regulation prevents Bell Atlantic
from competing in this hotly contested market, the company said today.

In a filing with the Federal Communications Commission (FCC), Bell
Atlantic called for an end to archaic rules that prohibit the company from
offering businesses better deals on special access services.

"These policies discourage vigorous price competition and prevent
business customers from selecting the carrier best able to meet their
needs," said Frank Gumper, vice president -- long range public policy,
Bell Atlantic. "This highly competitive market no longer needs
government micro-management to come between customers and the
companies that serve them."

Bell Atlantic said the multi-million dollar battle for business voice and
data services currently is fought among dozens of telecommunications
companies. In this white-hot arena, Bell Atlantic tariffs provide "price
umbrellas" which encourage competitors to offer bids just below Bell
Atlantic's tariff rates. In addition these tariff-filing requirements cause Bell
Atlantic to disclose its prices in advance.

Long distance companies and large, telecommunications intensive
businesses use special access services to interconnect office buildings or
connect office buildings to long distance carrier facilities. Through the
1980s, special access facilities were used primarily to carry voice
conversations, but today they are also used extensively for e-mail, Internet
access and other data applications like graphics and video. Explosive
demand for these services has created a fiercely competitive environment.

Competitors have built state-of-the-art, fiber-optic facilities to attract
customers and leverage their selling capabilities by merging with
providers that go head-to-head with Bell Atlantic.

In the states covered by the Bell Atlantic petition, 90 percent of the special
access market is subject to competition, and savvy telecommunications
managers are playing numerous suppliers against one another in the quest
for the best deal. Bell Atlantic does not dominate this market and
maintains that this relief will allow it to compete more vigorously to the
benefit of consumers.

"Customers are denied the best bargains as long as regulation creates an
artificial barrier to real competition," Gumper said. "Freedom from price
regulation will allow us to introduce new services and foster business innovation.
It's time for the FCC to honor the spirit of the Telecommunications Act and lift the
shackles from a market that no longer needs regulatory supervision."

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.