RBOCs Eye High-Speed Data with FCC Plan

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Washington -- Three regional Bell operating companies could
enter the long-distance phone market without complying with current statutes if the
Federal Communications Commission approves an application, according to lawyers for the
cable and long-distance telephone industries.

But the RBOCs claim that offering long-distance phone
service is not the reason they would build the network.

"That's not our intent," said Nanci
Bernstrom, director-information and federal relations at U S West Inc. "Our intent is
for high-speed Internet service."

Bell Atlantic Corp., Ameritech Corp. and U S West have
asked the FCC for permission to provide long-distance, high-speed Internet service.

The most controversial aspect of the application involves
the breadth of the network Bell Atlantic is asking to build. This network would cross LATA
(local access and transport area) boundaries, which determine regional service. The 1996
Telecommunications Act forbids companies from crossing these boundaries without first
complying with several of its provisions.

"The slow pace at which high-speed broadband services
are becoming available to Americans today, two years after passage of the Act, confirms
that existing regulatory restrictions have slowed investment in the necessary advanced
services," stated Bell Atlantic in its January filing to the FCC.

But critics are attacking Bell Atlantic's request as
absurd, especially because the phone companies have asked the FCC to use one provision of
the 1996 act, Section 706, to waive the requirements of two other sections. They also say
that approval of the applications would allow the RBOCs access to the long-distance phone
market through a "back door."

"The FCC does not have the power to do what the Bell
companies are asking them to do," said Mark Rosenblum, AT&T Corp.'s vice
president for law and public policy. "It would allow them [RBOCs] to expand their
monopoly."

Bell Atlantic will respond to this claim in its filing May
6, which is when replies to opponents' concerns must be filed.

Bell Atlantic also has applications pending with the FCC to
enter the long-distance market, but it must first open local service to competition
through a 14-point checklist, which is mandated under Sections 251 and 271 of the 1996
act.

Long-distance telephone calls can be made over the
Internet, so approval of the infrastructure application would mean that the RBOCs would
not have to comply with Sections 251 and 271 before organizing their long-distance data
network.

Opponents say that the RBOCs' track record makes their
claims of just wanting to provide Internet service hardly believable.

"The Bell companies have a long tradition of slightly
skewing the facts and changing things to fit their reality," said Wayne Jackson,
spokesman for AT&T. "Once the facilities are in place, it gives them the
technology to provide all telecommunications services."

The RBOCs also argued that a new network would help relieve
Internet congestion.

But Barbara Dooley, executive director of the Commercial
Internet eXchange Association, attacked the RBOCs, saying, "The largest backbones are
doubling capacities every four to six months. The provisioning patterns, getting the
circuits in, is what causes congestion."

Rural areas in six of the 14 states U S West serves
don't have high-speed access to the Internet, Bernstrom said, which is another reason
why the applications should be approved.

"We serve the majority of rural customers in this
country," Bernstrom said. "If we can't get them the services, there
isn't a competitor who can get it to them."

But AT&T doesn't buy that argument.

"If there is no other competitor there, that is all
the more reason that they should not be allowed in our view," Jackson said.

Other motives might be at work here, said Christopher
Savage, head of the telecommunications and Internet practice at Cole, Raywid and
Braverman, which represents several cable companies.

"It's always possible that they made these
filings to get the FCC to deny them, thereby giving them another thing to complain to
Congress about," Savage said.

The RBOCs could then claim that they need congressional
relief under a bill that stymies competition, Savage suggested, adding that the Baby Bells
might also see a market that they want to dominate.

"Bell Atlantic and other RBOCs are realizing that the
Internet represents both a big opportunity and a big threat, and they are using this
process to declare their interest in becoming real Internet players," Savage said.
The RBOCs "show an interest in controlling as much of the high-bandwidth
Internet-access market as they can."

States News Service

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