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July 21, 1997updated 04 Sep 2016 12:56am


By CBR Staff Writer

The US Federal Communications Commission has created a government task force to probe charges that regional Baby Bell companies are unfairly stifling competition in the local phone business. Its move follows news that MCI Corp’s proposed merger with British Telecommunication Plc has been thrown into doubt because MCI is facing escalating losses starting at $800m this year – which it blamed on being blocked out of local markets. The FCC 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 regional Bell operating companies that failed to conform to the aims of the Telecommunications Act. Following news of the task force it said it applauded Hundt’s move and called for regulators to impose strict deadlines and financial penalties in an effort to pry open local phone monopolies nationwide. MCI stance on its losses 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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