Bell Atlantic Encouraged by FCC Decision

Bell Atlantic Encouraged by FCC Decision

Order Recognizes the 'World' in the World Wide Web

February 25, 1999

BACKGROUND -- Some companies are unjustly reaping financial gains
from the system established to share network costs among all telephone
companies. In fact, because of prior regulatory decisions, these
companies are being paid not to compete with local phone companies, like
Bell Atlantic. Hundreds of millions of dollars are being doled out to a few
major carriers.

In October, the Federal Communications Commission (FCC) declared
that calls made over dedicated lines to the Internet are interstate calls.
Today the FCC said it has determined that all calls to the Internet are
interstate and not local calls, and as such, are not subject to the
compensation structure for local calling. The following response should
be attributed to Tom Tauke, senior vice president for government
relations, Bell Atlantic.

Today's decision shows that the FCC recognizes the "world" in the World
Wide Web, by deciding, once and for all, that calls to the Internet truly
reach beyond local boundaries and extend to the global community. The
FCC has taken an important step to deliver on the promise of competition
embodied in the Telecommunications Act of 1996.

This should put an end to misinterpretations of earlier FCC actions meant
to encourage the growth of the Internet. Under those misinterpretations,
certain telephone companies have been collecting large fees for calls to the
Internet - fees that are supposed to be available only to cover the costs of
local calls. What's worse, these companies could only collect these fees if
they avoided providing normal telephone service to consumers.

Bell Atlantic will immediately ask state commissions to correct this
situation and reconsider their decisions on so-called "reciprocal
compensation" because it's clear that these payments apply only to "local"
calls.

We are hopeful they will do so, both because of the language of
agreements between telephone companies, and because paying reciprocal
compensation on this traffic is contrary to the policy objectives of the
states: instead of promoting competition, it deters it; instead of stimulating
investment in new technologies, it deters it.

Bell Atlantic stands ready to work with the states to put local competition
back on track and eliminate the scheme that pays competitors not to
compete.