Structural Separation Sunk By Illinois Legislature

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BLOOMINGTON, Ill. - An AT&T-backed initiative that would have saddled Illinois consumers with higher phone costs, diminished network investment and massive customer confusion has failed to advance in the Illinois legislature.

Several attempts to introduce the concept of structural separation - splitting Verizon and Ameritech into wholesale and retail companies - as part of that state's new telecommunications bill recently failed to advance in the legislative process. Illinois now joins a growing list of states in which legislative bodies and state commissions have rejected or ignored the idea of splitting the local phone company into two companies.

"Several bills calling for the breakup of Verizon and other telephone companies were considered by the Illinois General Assembly as part of a comprehensive modernization of the state's telecommunication laws," said John O. Dudley, Verizon Great Lakes Region president. "In the end, neither the House nor the Senate adopted such a crazy idea and rightfully so - it's an idea that ATT is trying to sell across the country solely in an effort to slow down competition. This ultimately would be bad for consumers."

Since 1984, the Federal Communications Commission has rejected structural separation at least four times. This year, Pennsylvania regulators realized it was a bad idea, and in Maryland a structural separation bill was withdrawn when it was headed for certain defeat. In fact, no state has required it.

"This failure by AT&T to move its self-serving legislation through the Illinois General Assembly should send a message across the country," said Dudley. "The road to full telecommunications competition isn't a U-turn to increased regulation and legislated inefficiency; it advances to open markets where all companies are free to compete by providing all services to all consumers."

When attempts to introduce structural separation were made in Pennsylvania, Verizon estimated that splitting its company operations there would cost more than $1 billion to implement, increase phone rates, threaten thousands of jobs, diminish network investment and create tremendous customer confusion.

AT&T hopes to gain a business advantage over local companies like Verizon at the expense of consumers, Dudley said. As part of this effort, AT&T has sponsored television and full-page newspaper ads and mobilized front groups to spread the company's misinformation.

"We're pleased that, despite an intense and well-funded lobbying campaign by AT&T and its allies, the Illinois bills failed to advance," Dudley said.

Verizon Communications

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