BALTIMORE, Md. -- The Maryland Public Service Commission today agreed to abandon outmoded regulation in favor of new rules that cap Bell Atlantic-Maryland's prices rather than its earnings. The change represents one more step toward creating telecommunications competition in Maryland.
"We are pleased that the Commission has moved Maryland toward open telecommunications markets," said Daniel J. Whelan, president and CEO, Bell Atlantic - Maryland. "However, we are disappointed that the Commission ignored the realities of the marketplace and required us to reduce rates by $32 million. That's money that could have been reinvested further in economic development in Maryland."
Whelan's comments followed the Commission's decision to apply the rate reductions to access charges that the long distance carriers pay to Bell Atlantic to complete calls through the company's local telephone network.
"We're pleased the PSC required long distance carriers to pass along these savings to their customers," Whelan said. "We hope those savings are shared with all residential long distance customers, especially those who subscribe to basic, no-frills service. For far too long, these customers have subsidized programs like 'Friends and Family' and 'True Savings'."
Whelan estimated that the average Maryland residential customers could save nearly $2 on their monthly long distance bills if the long distance companies pass the $32 million reduction on to customers.
Arbitration decision positions Bell Atlantic-maryland for long distance market
In a separate order, the Commission also set a wholesale discount rate of approximately 20 percent for companies reselling Bell Atlantic's local service to customers. The Commission also set interim rates for unbundled network services that can be purchased on a piecemeal basis by competitors. In the coming months, all competitors will submit economic studies to the PSC so that it can establish permanent rates. Whelan said that many of the interim rates were set artificially low.
"Bell Atlantic favors full, fair and open competition, but that doesn't mean my company should underwrite my competitors' foray into the marketplace," Whelan noted.
By opening its network to competition and agreeing upon the resale rates, Bell Atlantic takes a crucial step toward meeting the 14-point checklist established in the Telecommunications Act of 1996. Once that checklist is met and approved by state and federal regulators, Bell Atlantic can provide long-distance service to Maryland customers.
"We believe we can meet the checklist soon," said Whelan. "I'm sure the commission will move promptly on our application to provide long-distance service. If the FCC moves as quickly, we could begin serving customers in mid-1997."
Bell Atlantic Corp. (NYSE: BEL) is at the forefront of the new communications, entertainment and information industry. In the mid-Atlantic region, the company is the premier provider of local telecommunications and advanced services. Globally, it is one of the largest investors in the high-growth wireless communication marketplace. Bell Atlantic also owns a substantial interest in Telecom Corp. of New Zealand and is actively developing high-growth national and international business opportunities in all phases of the industry.