Legislators' Statements Don't Square With Facts on Telecom Competition in Pennsylvania

HARRISBURG, Pa. - State Reps. T. J. Rooney (D-Lehigh/Northampton) and Mike Veon (D-Beaver Falls) today called for drastic cuts in the wholesale rates companies pay Verizon to lease parts of Verizon's network in providing local phone service. The Pennsylvania Public Utility Commission (PUC) currently is reviewing these wholesale rates. The following response should be attributed to Harry Mitchell, Verizon director-media relations:

"The statements by Reps. Veon and Rooney parrot AT&T's position and, as a result, don't square with the facts.

"Competition is flourishing in Pennsylvania. Verizon's wireline business now serves only about half the total lines in the state, with competing wireline and wireless companies serving around 6.3 million lines. Verizon Pennsylvania faces competition in each of the 339 local telephone exchanges we serve across the state.

"In addition, contrary to the representatives' characterizations, Verizon has met - and will continue to meet - its many commitments under Pennsylvania's Chapter 30 alternative regulatory structure. Verizon employs nearly 20,000 men and women in this state and has invested more than $6 billion in the commonwealth's rural, suburban and urban telecommunications infrastructure over the past few years.

"Similarly, the representatives' claims that Pennsylvania's wholesale rates are too high don't withstand scrutiny. The Federal Communications Commission has found that AT&T and WorldCom could enjoy a 30 percent or greater margin under Verizon's current wholesale rates in Pennsylvania. Our proposed wholesale rates reflect federal- and state-required forward-looking costs and are an accurate reflection of what it costs us to actually provide the service.

"The representatives want it both ways - ever-lower wholesale rates that won't allow Verizon to cover its costs of investing in and operating a network, along with accelerated investment in the telecom network in rural areas. However, below-cost wholesale rates destroy the incentive to invest by either Verizon or any other companies who have built their own networks.

"And that would be very damaging, not only to Pennsylvanians and Verizon, but also to equipment suppliers such as Agere Systems, which has a major presence in the Lehigh Valley and has been severely affected by the current industry slump.

"It's truly unfortunate that AT&T continues to compete by working the backrooms of the Capitol rather than by meeting us in the marketplace. Pennsylvanians deserve better."