FCC OKAYS SEC. 271 BIDS BY BELLSOUTH AND SBC FOR 3 STATES

Action makes BellSouth first Bell to have all of its states approved to offer long distance services. Latest 2 states represent 9.4 million of its phone lines and 38% of its network. BellSouth CEO Duane Ackerman said company would begin its long distance offerings in Fla. and Tenn. Dec. 30. BS said it would offer customers one bill and “one call to customer service” for local and long distance services. “We believe that over time we can capture a 20%-25% market share” of $4.5-$5 billion market in Fla. and Tenn., spokesman said. “Experience has demonstrated that in those states where Bell companies have been authorized to provide long distance service, competition has increased both in the local market and for long distance service,” he said.

SBC’s application for Cal. ran into heightened opposition by competitors earlier this week, raising some doubt among industry observers about its outcome. As recently as Tues., AT&T and SBC were filing dueling ex parte letters, debating such issues as service outages, local number portability and terms for CLEC resale of advanced services. “It certainly wasn’t the slam dunk that some had anticipated,” Legg Mason analyst Blair Levin said in report issued Thurs. Cal. PUC all along had questioned SBC’s compliance with several state law provisions and didn’t sign off on one of federal checklist items because of questions about number portability, which SBC since has fixed. Cal. PUC issued draft order last week on remaining issues, mainly SBC’s compliance with state public interest test, but wasn’t expected to vote on it for another week or 2. Entry into Cal. long distance market is “huge opportunity,” with number of SBC’s access lines available for long distance service doubling from 30% today, company spokesman said.

AT&T said it’s “notable” that decision, like other Sec. 271 approvals, took into account CLEC entry by leasing unbundled network elements (UNEs). “The significance of today’s approvals in tandem with upcoming FCC decisions on the availability of the unbundled network element platform should not be underestimated,” spokeswoman said: “The Bells are in the final stretch of gaining access to the country’s long distance market, while at the same time continuing their domination of the local telephone marketplace. The balanced long distance/local telecom landscape envisioned by Congress is teetering on a precipice.”

FCC said that with approval of these 2 applications, 68.3% of Bell lines have been approved for long distance entry.

Meanwhile, Verizon filed application with FCC Thurs. to offer long distance service in Md., W.Va. and D.C., last remaining states it needed to have Sec. 271 authority throughout its original territory. “We have no doubt that, when the FCC reviews our comprehensive filing, the Commission will agree it’s time for consumers and businesses in [those 3 jurisdictions] to join the many others around the country who now enjoy the benefits of full telecom competition,” Verizon Senior Vp Tom Tauke said. Company already has won Sec. 271 approval from FCC for 11 other Northeast and Midatlantic states, including N.Y., which was first state in country to get FCC approval in Dec. 1999. Verizon said that with its former GTE properties, it already was offering long distance service in 47 states. It said adding long distance service to its other offerings was “a $2.2 billion opportunity in these 3 markets.”

Commission asked for comments on Verizon’s application by Jan. 9 and said deadline for evaluation by Dept. of Justice would be Jan. 27. Statutory 90-day deadline for agency to act is March 19, FCC said.