Coming Soon SBC Long Distance

September 22, 2003
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SBC Communications Inc. plans quickly enter the long-distance telephone market in Michigan, now that federal regulators have backed the move.

The Federal Communications Commission’s Sept. 17 decision, in a unanimous 5-0 vote, enables SBC Communications to now offer customers a full range of telecom services by bundling local and long-distance telephone service, as well as other offerings such as wireless phone and high-speed Internet, into a single product package.

The FCC’s order allows SBC Communications to begin offering long-distance phone service as of Sept. 26.

Gail Torreano, president of SBC Communications in Michigan, says it’s too early to tell exactly when that will occur, although “it’ll be very soon,” perhaps a matter of days from when the FCC’s order takes effect.

“We’re moving as fast as we can,” Torreano said. “We’ve waited for this for a long time, as have our customers. We’re ready.”

The FCC’s approval of SBC’s long-distance bid 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, before they may enter long distance markets, to prove they have opened previously monopolized markets to competition 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, up from just 4 percent in 1999, according to the Michigan Public Service Commission that supported SBC’s long-distance bid.

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 it’s 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.

Competing phone companies that opposed SBC’s bid – including telecom giants AT&T and MCI - now want to state regulators to ensure that the company works to maintain the competition that has emerged in Michigan. The Michigan Alliance for Competitive Telecommunications (MiACT) wants to see state regulators push SBC to make further system improvements and maintain “reasonable” wholesale rates.

SBC presently has a request pending before the state Public Service Commission to more than double wholesale rates charged local competitors. SBC claims it loses money on leasing its network at existing rates; competitors contend otherwise and say an increase would drive them out of business, virtually eliminating competition for local phone service that MiACT estimates has saved consumers $135 million in 2003 through lower phone bills.

“Competition is working in Michigan today,” MiACT Executive Director Greg Boyd said. “Now we must remain vigilant to ensure that competition thrives in the future.”

In its ruling, the FCC emphasized that SBC must continue to comply with all conditions to ensure competition remains for local phone service.

“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 state due by Oct. 15.

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