One Down, 49 to Go
Despite Landmark 271 Approval, Bells Have
a Long Haul
By Kim Sunderland
Posted: 02/2000
Give out a Section 271 approval and they will come--the Bells, that is. And they're coming in full force to the FCC, seeking the same "Go Card" the regulated operating unit of Bell Atlantic Corp. got to provide in-region long distance service in New York state.
"The RBOCs are like a herd of sheep," says Royce Holland, chairman and CEO of Allegiance Telecom Inc. (www.allegiancetelecom.com). "When one moves, the others follow."
Bell Atlantic's (www.bell-atl.com) approval arguably marks the most significant development in competition since the Telecommunications Act of 1996 was signed into law four years ago this month. It not only signals the first Bell's entry into in-region long distance, it also serves as a blueprint for other Bells to use to gain such entry.
"It was only a matter of time for the first wall to cave in, so I look for the others to step up their application process and run to the FCC for permission to enter on the heels of [the Bell Atlantic] decision," says Robert E. Knowling Jr., president and CEO of Covad Communications Co. (www.covad.com). His company, with AT&T Corp. (www.att.com), on Dec. 28 asked the U.S. Court of Appeals in Washington to stay the FCC's order on the Bell Atlantic petition (The Court declined to grant the stay).
And here they come. Standing first in line is SBC Communications Inc. (www.sbc.com). In Texas, the PUC (www.puc.state.tx.us) unanimously agreed last December that SBC's Southwestern Bell Telephone Co. has opened its local network to competitors, which cleared the way for the telephone giant to file an application with the FCC to provide in-region long-distance service in the $6.2 billion Texas market. The FCC has a little less than 90 days to rule on it. SBC Chairman and CEO Edward E. Whitacre Jr. says when SBC's application is approved at the FCC, other long-distance applications will be filed by SBC in other states within its region later this year. In California, SBC's operations support systems--which handle such functions as network element and service provisioning for carrier customers of SBC--is undergoing tests to ensure it properly functions with competitors. Federal and state regulators consider these OSS tests a key element in ruling on the Bells' applications.
BellSouth Corp. (www.bellsouth.com), meanwhile, holds the dubious distinction of already having three of its long-distance applications nixed by the FCC. It's clamoring to get out of the dugout and into in-region inter LATA services. The RBOC will file with the FCC its first in-region long-distance application this year during the first quarter; this one for Georgia. "The Georgia PSC is conducting a comprehensive review of our systems to ensure that in their view we also meet the requirements of the Telecom Act," says BellSouth Vice Chairman Jere Drummond. "The PSC has taken an approach that we believe will provide the FCC with indisputable proof that our systems provide our competitors the same level of service we provide to our own customers."
In Florida, BellSouth's systems also are going through "a detailed test plan," says spokesman Bill McCloskey, "that will continue through most of the first half of the year." He estimates the Florida tests are slated to be finished around June, at which time BellSouth will seek long-distance approval from state regulators, and then it's on to the FCC. As for its former failed 271 applications--for South Carolina and Louisiana (twice)--BellSouth plans to update its 271 information, including the latest competitive checklist compliance and OSS results, and then refile these applications at the FCC once BellSouth gets a federal approval for Georgia. BellSouth also may file a multistate application, McCloskey says, because "the beauty of our system is that it's a nine-state OSS system. So if it's adequate in one state, it's arguably adequate in the other eight states of our region."
Bell Atlantic isn't stopping at one. Bell Atlantic will file other in-region long-distance applications early in the second quarter of 2000 in Massachusetts, New Jersey and Pennsylvania for the rest of its region by the end of 2000. "We are going to build on this approval," says Chairman and CEO Ivan Seidenberg.
However, Bell Atlantic's approval in New York won't necessarily open the stadium gates for once-a-week, one-size-fits-all Bell 271 approvals at the FCC, telecom experts say. For one thing, they reason, no other market is as open as New York, except maybe Texas. In these two states, Bell Atlantic and SBC have lost tens of thousands of telephone lines to rivals, while in states with less competition, the Bells continue to dominate. Another reason, according to analysts, is the road to 271 approval at the FCC was long and winding for Bell Atlantic. This isn't a game for second stringers.
Even the Bells' lobbyist, the United States Telecom Association (USTA) (www.usta.org) acknowledges while Bell Atlantic's 271 approval is great, "we still have 49 other regulatory jurisdictions to deal with where all the markets are different," says USTA President Roy M. Neel.
Now that Bell Atlantic's 271 in New York has been approved, the CLECs take on the role of vigilant protector of the Telecom Act. "We've been waiting for the [Telecom Act's competition] rules to be fleshed out," says Jonathan Askin, vice president of law for ALTS (www.alts.org), "and now that they have, we'll put more of a push on enforcement." He says ALTS will file contract and antitrust claims to hold the Bells to the provisions of Section 251 interconnection requirements of the Telecom Act. The post-271 world "is all new to us," Askin says, "and we're all building up our legal departments in order to deal with it."
There will be plenty of areas for the CLECs to monitor during their upcoming negotiations with the ILECs on expiring interconnection agreements. For instance, FCC Chairman William E. Kennard acknowledged he would have opposed Bell Atlantic's approval in New York if the company hadn't agreed to create a separate affiliate to provide high-speed lines to ISPs. Commissioner Susan Ness actually said some Bell Atlantic efforts to meet the act's 14-point competitive checklist "barely received passing grades." The CLECs will be making sure they get what's coming to them.
