The US Federal Communications Commission (FCC) yesterday adopted a new set of rules to end local telephone companies’ monopolies and open up the $100bn market to long-distance carriers and others. The rules say the seven Baby Bells must lease at least part of their networks and give up a portion of the fees they charge cellular and wireless firms to complete calls. But local providers will now also be able to enter the $70bn long-distance market. The ruling stems from the telecommunications law passed earlier this year. Overall, long-distance companies cheered the chance for new business, while local providers grumbled about how specific interconnection arrangements would affect their revenues. Long-distance provider MCI Communications Corp says it will spend $6bn for access services to local Bell companies, which it claims only cost the Bells $1bn to provide themselves. MCI says under the new rules, it could pass savings on to customers. AT&T Corp approved of the overall plan, but said it was disappointed that the FCC has postponed cost-based access reform for up to 10 months. It’s particularly outrageous that during a transition period, the local companies will continue to collect access fees from new entrants who buy unbundled network elements, even when the local companies no longer provide any service to the new entrants’ customers, AT&T said. Meanwhile, in the local provider camp, BellSouth Corp said the FCC’s terms and conditions would impede the process to competition and was concerned with the commission’s handling of services such as voice mail. Local provider Teleport Communications Group (TCG) said the improved interconnection arrangements would help its business, but yesterday also announced it had filed petitions asking regulators in nine states to arbitrate its interconnection negotiations with GTE Corp TCG has filed similar petitions in 21 states against Nynex Corp, Bell Atlantic and others.
