97% Control of 17.4 Million California Phone Lines is Not
Competition
SAN FRANCISCO, July 16, 1999 -- MCI WorldCom is calling Pacific
Bell's second application to offer long distance service in
California extremely premature.
Under Section 271 of the Federal Telecommunications Act of 1996,
Pacific Bell must completely satisfy a "competitive
checklist" of 14 requirements before it can be authorized to
provide long distance in California. The law requires the local phone
market to be competitive first, before Pacific Bell can be eligible for
long distance entry. The ability to sell long distance is the only
incentive for Pacific Bell to end its monopoly control of local phone
service in the state. Allowing it to offer long distance before
competition takes hold would close the door on the future of
competition.
In December, the California Public Utilities Commission (CPUC)
denied the local phone monopoly's first bid to offer in-state long
distance service after an exhaustive nine-month investigation by
commission staff experts and a CPUC administrative law judge found that
Pacific Bell fell well short of meeting the checklist requirements.
"One would have to assume that something has changed in the
past seven months to justify this sequel," said Richard Severy,
director, MCI WorldCom Public Policy. "But the fact is nothing
significant has changed. Local phone competition hasn't advanced at
all since last year. Consumers still do not have a meaningful choice
for their local service."
Chief among the competitive barriers that Pacific Bell has yet to
satisfy are:
· Improving its operations support systems (OSS) in order to
efficiently and accurately confirm customer account data, place orders,
provision service, provide billing or initiate repairs. Pacific
Bell's OSS have not been proven to be fully capable of quickly and
reliably allowing customers to change carriers.
· Reducing the prices of network facilities needed by competitors.
Today, many of Pacific Bell's rates are among the highest in the
nation and have discouraged competitive entry by firms seeking to serve
California residents. Although the CPUC is considering lowering prices
for some network elements, that hasn't happened yet, and reasonable
prices for collocation arrangements and other network capabilities
needed to provide advanced digital subscriber line (DSL) services have
yet to be set.
· Failing to offer competitors efficient and nondiscriminatory
opportunities to provide California consumers with innovative DSL
services, and
· Improving its ability to "port" a customer's
telephone number from Pacific Bell's network to the competitor
serving the customer. Too often, Pacific Bell fails to timely and
accurately transfer the customers' phone numbers, resulting in
service disruptions and customer inconvenience.
"Despite Pacific Bell's exaggerated claims of robust
competition, it has still not met the legal requirements and opened its
market to competition. Nor will it, unless the CPUC forces it to do
so," Severy said.
After first supporting the Telecommunications Act, then filing a
lawsuit to declare it unconstitutional, Pacific Bell is now
disingenuously claiming again that it has met its legal obligations and
opened its local telephone monopoly to competition. Despite the best
efforts of the CPUC and new entrants to foster local competition,
Pacific Bell still controls around 97% of its local market, and is
doing all in its power to keep it that way.
MCI WorldCom urges the CPUC to closely scrutinize Pacific Bell's
latest application, and encourages it to "stay the course" by
insisting on open, robust local competition before it considers Pacific
Bell's premature plea for long distance entry.
"We're committed to providing local service for all
Californians," Severy said. "We've invested millions of
dollars to provide facilities-based service, and we've found a big
demand from customers for choice. Unfortunately, at this point, we are
forced to limit our facilities-based local offerings to business
customers. Create an environment for competition, and you'll see
real competition, which includes offering all customers access to more
choices, innovative new products, improved customer service and
competitive prices."
MCI WorldCom offers facilities-based local service to California
businesses in San Francisco, Los Angeles, San Diego, Sacramento,
Oakland, San Jose, Bakersfield, Fresno, Orange County, Santa Rosa,
Stockton and Vallejo-Fairfield-Napa.
MCI WorldCom is a global leader in communications services with 1998
revenues of more than $30 billion and established operations in over 65
countries encompassing the Americas, Europe and the Asia-Pacific
regions. MCI WorldCom is a premier provider of facilities-based and
fully integrated local, long distance, international and Internet
services. MCI WorldCom's global networks, including its
state-of-the-art pan-European network and transoceanic cable systems,
provide end-to-end high-capacity connectivity to more than 40,000
buildings worldwide. MCI WorldCom is traded on NASDAQ under WCOM. For
more information on MCI WorldCom, visit the World Wide Web at
http://www.wcom.com.
