Local Phone Market is Open, Company Tells New York PSC

Local Phone Market is Open, Company Tells
New York PSC

Bell Atlantic-New York President Says the Proof Is
Competitors' One Million Lines

August 31, 1999

NEW YORK -- Two years of intensive work have undeniably brought competition to local telephone customers in New York, and today Bell
Atlantic told state regulators that one million telephone lines in the state
are being served by competitors.

"The local telephone market in New York is open and our
competitors' lines prove it -- all one million of them," said Bell
Atlantic-New York Group President Paul Crotty today before the New
York Public Service Commission (PSC). "The numbers tell the
story. There are 16 other states in the country that don't even have one
million local phone lines.

"It's time to stop wrestling in the regulatory arena and move
forward," Crotty said. "No telecommunications company in
the United States has delivered on the challenge of the 1996 Telecom Act
as we have. We're miles ahead of the pack."

The PSC conducted oral arguments in Albany today as the last formal step
in its review of Bell Atlantic's compliance with the Telecom Act. The
Telecom Act allows Bell Atlantic to enter the long distance market when
the local telephone market is open to competitors.

Crotty noted that competitors are using all three modes by which
telephone companies can offer local service using all or some of Bell
Atlantic's networks and systems:

• Interconnection, a process that allows a competitor to link its
  network with Bell Atlantic's;

• Unbundled network elements (UNEs), a mechanism under
  which a competitor can purchase at wholesale rates parts of
  Bell Atlantic's network and combine them to offer service to a
  local customer;

• Resale, a process that allows a competitor to purchase Bell
  Atlantic services at wholesale rates and then resell them to a
  local customer.

With the New York process completed following today's hearing, the way
is clear for the company to apply to the Federal Communications
Commission (FCC) for permission to enter New York's $8 billion annual
long distance market.

After Bell Atlantic makes its application, the PSC will then make a
recommendation to the FCC before the federal agency makes a final
decision. Bell Atlantic has been working with the PSC since February,
1997, in order to gain a positive endorsement from the agency. The PSC's
review included an unprecedented third-party test of Bell Atlantic's
operating support systems (OSS), which competitive local companies use
to interact with Bell Atlantic's systems and network. That test was
performed by KPMG.

"The final report concluded 99.4 percent of the KPMG test criteria
were met," Crotty said.

Crotty also emphasized that in addition to the third party test of OSS, Bell
Atlantic is handling high levels of actual commercial orders daily from
more than 70 CLECs.

"Thus, the PSC has two sources of data: the actual commercial
volumes and the third-party test, both of which demonstrate that our OSS
are available to CLECs," Crotty said. "The access we provide
to our OSS affords both large and small CLECs a meaningful opportunity
to compete."

Crotty also outlined the following statistics about the current state of local
telephone competition in New York:

• Bell Atlantic has signed and the PSC has approved 74
  interconnection agreements with local competitors.

• Bell Atlantic has more than 340,000 interconnection trunks and
  over 700 collocation arrangements in place throughout New
  York. Collocation arrangements allow a competitor to locate
  its equipment in Bell Atlantic call-switching centers.

• Each month, Bell Atlantic exchanges billions of minutes of
  local traffic with competitors. In June alone, three billion
  minutes of use were exchanged between competitors' and Bell
  Atlantic's networks.

• Some 180,000 unbundled network elements are now being
  used by competitors.

• Competitors have purchased at wholesale rates and re-sold
  some 310,000 local lines.

• About 180,000 local phone numbers have been moved from
  Bell Atlantic to competitors.

• Close to 1,000 three-digit exchange codes have been assigned
  to CLECs, giving them access to over 10 million local phone
  numbers.

Finally, Crotty noted that Bell Atlantic has agreed to abide by a
performance plan under which it would pay credits to local competitors if
its delivery of service to CLECs does not meet certain standards.

"Bell Atlantic has backed up its performance with money, which
will flow to the CLECs in the form of credits, if our performance departs
from the very high goals set for us," Crotty said.

Bell Atlantic is at the forefront of the new communications and
information industry. With more than 43 million telephone access lines
and nearly 10 million wireless customers worldwide, Bell Atlantic
companies are premier providers of advanced wireline voice and data
services, market leaders in wireless services and the world's largest
publishers of directory information. Bell Atlantic companies are also
among the world's largest investors in high-growth global communications
markets, with operations and investments in 23 countries.