DoJ ENDORSES VERIZON SEC. 271 PETITION FOR N.J.
Dept. of Justice recommended Mon. that FCC approve Verizon’s application to provide long distance services in N.J., although it raised concerns about “certain changes in prices” charged to CLECs by Verizon there. “Conditions in [N.J.] local telecommunications markets now appear favorable to fostering competition,” DoJ Antitrust Chief Charles James said. However, he suggested that FCC keep eye on 2 facets of local competition in that state: (1) N.J. Board of Public Utilities recently reduced rates for unbundled network elements (UNEs), but it also instituted “significant increase” in Verizon’s one-time charges for “hot cuts.” Several CLECs have said those charges could impede their ability to compete, DoJ said. Hot cut is process in which Verizon physically disconnects customer’s phone line from Verizon’s switch and reconnects it to CLEC’s switch. (2) Department suggested that FCC exercise oversight of Verizon’s wholesale billing functions in N.J. “in view of the problems found last year with Verizon’s [Pa.] wholesale billing systems,” which are same as those used in N.J.
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Verizon said it was “very pleased.” It said consumers in nearby N.Y. were saving millions of dollars as result of its entry into the long distance business there and N.J. residents would see similar savings. However, AT&T said “serious impediments to local competition continue to exist” in N.J. For example, it said, “while Verizon publicly encourages facilities-based competition,” it has raised cost of hot cuts that are “vital to facilities-based competitors” to $160 from $32. AT&T said “that’s outrageous and a tactic only a monopoly could love.” Verizon Assoc. Gen. Counsel Sarah Deutsch responded that increase in hot-cut price was result of more-complex process that had been sought by CLECs. Hot cuts involve “very labor-intensive, time-consuming process, which shouldn’t be surprising to CLECs” that worked with Verizon on how process should be done, she said. N.J. regulators looked at prices and were satisfied they were cost-based, Deutsch said.
Sec. 271 of Telecom Act requires Bell companies to show they have opened their local markets to competition before they can receive approval to enter long distance side. FCC is required to act on N.J. request by March 20.