WHITACRE SAYS CAL. IS NEXT TARGET FOR SEC. 271 ENTRY
SBC Chmn. Edward Whitacre said company’s next petition for long distance entry would be for Cal. and probably would be filed at FCC in summer. Answering questions after National Press Club speech Wed., he said coming up after Cal. were states in Ameritech region. SBC hopes to have won Sec. 271 entry in all of its states by end of 2002, Whitacre said. He said he hoped process would be completed sooner but he was trying to be realistic, considering how long it had taken Bells to gain entry in handful of states so far.
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In speech, Whitacre made pitch for Tauzin-Dingell bill (HR- 1542), saying it would even disparity in regulatory treatment between 2 main players in broadband marketplace -- Bells and cable companies -- by lessening regulation faced by phone companies. With Tauzin-Dingell, Congress has opportunity “to remove the single greatest threat to competition facing America’s telecommunications consumer, the cable stranglehold that is developing in the broadband marketplace,” he said. Cable has “lion’s share” of broadband market and yet faces none of the regulatory obligations placed on telecom industry, he said. While phone company must offer access to all competitors, cable provider “faces no obligation to make the pieces of its networks available to others,” doesn’t have to resell its services or make its operating systems conform to competitors’ systems, Whitacre said. Cable companies can offer lower prices because regulation has raised SBC’s costs, he said: “It shows you why AT&T, the world’s largest cable monopoly, is working so hard to block legislation that would remove their advantage.”
In answer to other questions, Whitacre said company wasn’t in expansion mode now because of market conditions. Along same vein, when market improves, SBC and BellSouth “probably will go forward” with long-planned IPO for Cingular wireless company, he said. “I'm frequently asked, who will we buy,” he said. “I'm not thinking of that now. We're concentrating on execution.” When reporter asked whether SBC planned to sell Americast, cable system overbuilder, he said “yes” and, when asked when, he said “soon, I hope.” Systems have been on block for about 2 years and there have been rumors that buyer has been found. Asked about his views on state efforts to require separate subsidiaries for Bell companies, Whitacre said it would be “disaster to force us to split up.” Separate subsidiaries eliminate economies of scale and raise costs, he said. Asked about penalties SBC has been paying for missing targets set by SBC-Ameritech merger, Whitacre said company had to meet 3 million performance measures each month: “No one can make 3 million [measures] a month perfectly. That’s what we think is too much regulation.”