SBC Gets Long Distance Nod

September 18, 2003
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Federal regulators have backed SBC Communications Inc.’s bid to enter the long distance telephone market in Michigan.

Wednesday’s decision by the Federal Communications Commission, in a unanimous 5-0 vote, will enable SBC to bundle local and long-distance phone service, as well as other telecommunications services such as wireless phone and high-speed Internet, into a single package for consumers.

“The real winners are those who live and work in Michigan,” said Gail Torreano, president of SBC Communications in Michigan. “True competition is now only days away. Michiganians can look forward to better values, more innovative products and services, greater convenience, and a new, reliable choice for all their communications needs.”

The FCC’s approval of SBC’s long-distance bid, announced late Wednesday afternoon, came a little more than five months after the San Antonio-based telecom giant withdrew a previous request at the last minute when it appeared regulators were prepared to reject it over lingering concerns about wholesale billing procedures.

Federal law requires the Baby Bells like SBC to open up previously monopolized markets to competition before they may enter long distance markets by leasing space on their telecommunications networks to companies offering a competing local phone service.

Competitive local exchange carriers controlled about 22 percent of the phone lines in Michigan as of Dec. 31, according to the Michigan Public Service Commission.

But competitors in Michigan, in opposing SBC’s request, claimed that wholesale billing errors between SBC and the competitive local exchange carriers persist and that granting SBC approval to offer long-distance service would negate any incentive for the company to fix the problems and allow it to re-monopolize phone service in Michigan.

In its re-filing of this case this summer, SBC argued that wholesale billing errors had been addressed. The FCC, in approving SBC’s request, agreed.

“Despite some past difficulties in this area, the record does not demonstrate that there are ongoing violations that call into question the current openness of the local market in Michigan,” FCC Commissioner Michael Copps said.

In its ruling, the FCC emphasized that SBC must continue to comply with all requirements on a checklist to ensure competition remains.

“I believe that moving ahead now is the right thing to do, but our approval must be combined with essential, rigorous and sustained follow-through if we are serious about serving the public interest,” Copps said.

SBC is now allowed to offer long distance in nine of the 13 states in which it operates. Requests are pending in Illinois, Indiana, Ohio and Wisconsin, with an FCC decision for those states due by Oct. 15.      

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