When MCI Communications Corp announced its losses in the local market could hit $800 million this year and exceed that amount in 1998, Timothy Price, MCI president and chief operating officer, placed the blamed the efforts of the local carriers across the US to block the opening up of the $100bn local phone business. The move, part of a long-running war of words between long-distance carriers and local service providers, was clearly an attempt to use the losses as a sign of MCI’s sincerity in wanting to enter the local markets as well as providing a scapegoat in the guise of the regional carriers. As part of the announcement Price called for tougher regulation of the Regional Bell Operating companies (RBOCs), and now he looks to have got his way. The FCC now says it has created a government task force to probe charges that regional Baby Bell companies are unfairly stifling competition in the. The agency said its enforcement task force will identify trouble spots and mete out penalties, if necessary, in an effort to open the local market to new competitors after passage of last year’s telecommunications law. There’s an immediate need for swift and certain enforcement actions to ensure delivery of the benefits of competition of the 1996 act to the public, FCC Chairman Reed Hundt said. “Enforcement will be fast, fair and predictable.” MCI had suggested that the FCC had not been sufficiently hard on RBOCs that were failing to conform to the aims of the Telecommunications Act. Following the move to set up the task force the company said it applauded Hundt’s move and reiterated its calls for regulators to impose strict deadlines and financial penalties in an effort to pry open local phone monopolies nationwide. MCI stance regarding its start-up losses in the local markets was dismissed by BellSouth Chief Financial Officer Ron Dykes. He said Any start-up business tends to lose money at the beginning, The remarkable part of this saga is MCI’s brazen attempt to turn this fact of business life into something more than it is in order to gain political advantage. Regulators shouldn’t be fooled by this ploy,” he said.
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