CFA Smokescreen of the Day


"Dedicated to truth, justice, and the disclosure of utrageous claims regarding competition in the local phone markets"

January 22, 1998

Smokescreen of the Day

Media contacts: For more information, contact: Eric Rabe at Bell Atlantic 215-963-6531 or Susan Butta at Bell Atlantic in Washington at 202-336-7883.

A study recently released by the Consumer Federation of American (CFA), "Stonewalling Local Competition: The Baby Bell Strategy For Subverting The Telecommunications Act of 1996," makes several broad brush generalizations about the Bell companies, which are either false or do not apply to Bell Atlantic.

There is competition in Bell Atlantic's market, it is growing and Bell Atlantic is doing everything it can to open its local markets. New York State, where Bell Atlantic has filed with the NY PSC in advance of its long distance filing with the FCC, is widely regarded as the most competitive local phone market in the country. In fact, as the CFA itself has said of Bell Atlantic's efforts in New York: "It is clear on the basis of the record in New York that, unlike the vast majority of states, significant effort has been made to open the local network to competition."

Bell Atlantic appreciates the support and recognition that has it received from CFA in the past, but wants to set the record straight on its commitment to opening local markets in the context of this recent study.

CFA CLAIM: There is very little competition in the local phone market.

FACT: Competition in Bell Atlantic's local markets is real and it is growing. Bell Atlantic has 393 interconnection agreements with competitors and has assigned 20,000,000 phone numbers to competitors in local phone service. That's more phone numbers than exist in the entire state of New York.

At the current rate of growth, the number of additional minutes of conversation, data and faxes that will pass between Bell Atlantic and its in-region competitors over 12 months is more than all the phone traffic in Washington, D.C. and Vermont in a given year.

Further, the recent moves by AT&T, SBC Communications and WorldCom to acquire Teleport Communications, Southern New England Telephone (SNET) and Brooks Fiber respectively are a strong signal of how competitive these markets are, and how much more competitive they will become.

The fact that companies such as AT&T are willing to spend billions to acquire local phone companies shows that the markets are open to anyone who wants to enter them and that the companies who want to compete have the economic incentive to do so.

CFA Claim: Market share is the best measure of competition in local markets and Bell Atlantic still has a strong hold on its market share in the local markets.

FACT: That may by CFA's opinion, however there is no market share requirement in the Telecommunications Act of 1996. Bell Atlantic is only required to open its markets. Congress correctly determined that existing local service providers could not make competitors enter their markets. Bell Atlantic also cannot control the fact that when the long distance providers have chosen to enter the local market it has only been to compete for business customers.

In New York State, where Bell Atlantic has filed with the NY PSC in advance of its long distance filing with the FCC, Bell Atlantic has met the 14-point checklist required in the Act. Bell Atlantic has interconnection agreements with all three of the long distance giants. However, Bell Atlantic cannot force AT&T, MCI and Sprint to offer local residential phone service.

In New York State, Bell Atlantic is processing between 1,000-2,000 resale orders a day, with the capacity to process five times this amount. If the long distance companies are not offering local phone service it is not because they can't; it is because they won't.

CFA CLAIM: Consumers are not recognizing the cost benefits they should from increased competition in local phone markets.

FACT: Basic residential phone service is already a great bargain for consumers. Currently, the rates for customers are set by the state public service commissions and the prices are set below the actual cost of the service to ensure universal access to basic phone service.

Where customers will see the greatest cost benefits will be in the packaging of services. Once companies, such as Bell Atlantic, are allowed into the long distance market, providers will be able to assemble packages of telecommunications services at more competitive prices.

CFA CLAIM: The Bell companies are subverting the Telecommunications Act.

FACT: Bell Atlantic is not only complying with the Telecommunications Act, the company is exceeding it. In addition to spending over $1 billion to ready its market for competition, Bell Atlantic is offering all its competitors services including:

  • access to Bell Atlantic databases and ordering systems;
  • interconnection at various points in the Bell Atlantic network;
  • collocation of equipment in Bell Atlantic central offices;
  • interconnection to other companies;
  • number portability; and
  • access to what are commonly called "unbundled network elements."

The Smoke Detector from Bell Atlantic is designed to give you early warning anytime "smoke" shows up in the advertisements, press releases, public statements or reports, issued by public interest groups or the long distance companies who claim that local competition does not exist.

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