Verizon Sees 8th Circuit Court Victory as Good for Competition

BACKGROUND -- The U.S. Court of Appeals for the 8th Circuit today issued a rulling striking down the FCC's so-called Total Element Long Run Incremental Cost (TELRIC) pricing rules for network elements provided by incumbent local exchange carriers to their competitors. Specifically, the 8th Circuit ruled that the Telecommunications Act of 1996 requires that the prices of network elements must be based on the actual costs of the incumbent local exchange carrier providing the network element.

The following response should be attributed to William P. Barr, Verizon executive vice president and general counsel.

STATEMENT: "Today's ruling is an important victory for genuine competition and vindicates our view that TELRIC unlawfully denies incumbent carriers recovery of their real-world costs. The 8th Circuit has determined that the prices of network elements must be based on the actual costs of the incumbent local exchange carrier providing the network element, not on the hypothetical costs of some imaginary carrier.

"The court's decision recognizes that Congress in the 1996 Act called for incumbent local exchange carriers to be compensated fairly. Real competition will thrive and deliver benefits to all Americans only if incumbent local exchange carriers have the incentive to continue to invest to provide innovative, high-quality services."

Verizon Communications

Verizon Communications (NYSE:VZ), formed by the merger of Bell Atlantic and GTE, is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 95 million access lines and 25 million wireless customers. A Fortune 10 company with more than 260,000 employees and approximately $60 billion in 1999 revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com .