Regulators Order New Rules for Bell
Company Challenges Long Distance Carriers to Pass on
$32 Million in Savings to All Their Customers
November 8, 1996
BALTIMORE, Md. -- The Maryland Public Service Commission
to abandon outmoded regulation in favor of new rules that cap Bell
Atlantic-Maryland's prices rather than its earnings. The change
represents one more step toward creating telecommunications
competition in Maryland.
"We are pleased that the Commission has moved Maryland toward open
telecommunications markets," said HREF="http://www.ba.com/homes/whelan.html">Daniel J. Whelan,
president and CEO,
Bell Atlantic - Maryland. "However, we are disappointed that the
Commission ignored the realities of the marketplace and required us to
reduce rates by $32 million. That's money that could have been
reinvested further in economic development in Maryland."
Whelan's comments followed the Commission's decision to apply the rate
reductions to access charges that the long distance carriers pay to
Bell Atlantic to complete calls through the company's local telephone
"We're pleased the PSC required long distance carriers to pass along
these savings to their customers," Whelan said. "We hope those
savings are shared with all residential long distance customers,
especially those who subscribe to basic, no-frills service. For far
too long, these customers have subsidized programs like 'Friends and
Family' and 'True Savings'."
Whelan estimated that the average Maryland residential customers could
save nearly $2 on their monthly long distance bills if the long
distance companies pass the $32 million reduction on to customers.
FOR LONG DISTANCE MARKET
In a separate order, the Commission also set a wholesale discount rate
of approximately 20 percent for companies reselling Bell Atlantic's
local service to customers. The Commission also set interim rates for
unbundled network services that can be purchased on a piecemeal basis
by competitors. In the coming months, all competitors will submit
economic studies to the PSC so that it can establish permanent rates.
Whelan said that many of the interim rates were set artificially low.
"Bell Atlantic favors full, fair and open competition, but that
doesn't mean my company should underwrite my competitors' foray into
the marketplace," Whelan noted.
By opening its network to competition and agreeing upon the resale
rates, Bell Atlantic takes a crucial step toward meeting the 14-point
checklist established in the Telecommunications Act of 1996. Once
that checklist is met and approved by state and federal regulators,
Bell Atlantic can provide long-distance service to Maryland customers.
"We believe we can meet the checklist soon," said Whelan.
the commission will move promptly on our application to provide
long-distance service. If the FCC moves as quickly, we could begin
serving customers in mid-1997."
Bell Atlantic Corp. (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 Corp. of New Zealand and is actively developing high-growth
national and international business opportunities in all phases of the