MCI Communications Corp. Chairman William G. McGowan yesterday said the Federal Communications Commission is in too much of a "rush" to deregulate the long-distance marketplace.
McGowan also said American Telephone & Telegraph Co., the dominant long-distance player and MCI's chief competitor, "continues on a relentless drive for immediate deregulation, even though it exerts monopoly power through upwards of 85 percent of the market."
McGowan told 1,100 business executives at a luncheon sponsored by the Greater Washington Board of Trade, "If you can imagine what it would be like if a single bank or a single department store had an 85 percent market share of all the bank revenues or retail dollars in America, you begin to see what it is like to compete with AT&T."
MCI, with headquarters in the District, is the third-largest private employer in the District and the largest private employer in Arlington, he said.
Howard Crane, MCI senior vice president of corporate affairs, said after McGowan's speech that "we continue to be concerned about the speed of deregulation . . . the FCC tends to confuse competitors with competition while we're the only ones making money."
The FCC's actions to deregulate the long-distance marketplace were called "ad hoc" by Gerald Kovach, MCI senior vice president of public and regulatory policy. "They have never put together a comprehensive overview of where the industry is going. They are acting as an impediment to the realization of a viable competitive marketplace," Kovach said.
MCI's comments reflect a common complaint of some AT&T competitors -- complaints that have prompted an ongoing debate among company officials and the FCC.
Responding to MCI's comments, AT&T spokesman Herb Linnen said in a telephone interview yesterday that the whole point of deregulation is that "the customer gets services faster."
As far as deregulation is concerned, there is "intensive competition in the long-distance marketplace," he said. But AT&T remains the "only long-distance carrier pervasively regulated," he noted.
"The FCC is committed to introducing competitive policies; the only whining has been from AT&T's competition, which would like to keep us hemmed in as much as possible," he said.
The FCC has implemented a number of actions in recent months, including allowing AT&T to jointly market services and equipment and to introduce new business services that appeal to the largest users. The FCC said it "devotes tremendous attention to these questions."
Decisions taken "in no way constitute deregulation of AT&T" and have been allowed only in instances where AT&T has justified new services on the basis of cost, said Albert Halprin, chief of the FCC's common carrier bureau. "The FCC's goal is to serve the public interest, and our balanced decisions have done that," he said.
Analysts gave the FCC's policies mixed reviews.
"The FCC is deregulating AT&T while it still dominates the market and that's ultimately not good for consumers," said David Aylward, managing partner at National Strategies and Marketing Group, a Washington firm that has represented AT&T's competitors. "It threatens the development of real competition in long distance."
Richard Wolf, executive vice president at LaBlanc Associates, a New Jersey consulting firm, said, "In some instances, the competitors are crying wolf." His firm has represented AT&T and competitors.
"There is going to be a [long-distance] shakeout, and the FCC's action is going to make the shakeout earlier, and you will have more viable companies sooner," he said.