Bell Atlantic Corp., the nation's largest local telephone company, yesterday asked federal regulators for the right to sell long-distance service in New York--the latest signal that the telecommunications world may be increasingly dominated by giant companies able to offer a full array of services.
Bell Atlantic's chairman and chief executive, Ivan Seidenberg, hailed the move toward long-distance as a good one for consumers. He asserted that it would spark more competition while allowing the company to deliver every piece of the modern spectrum--local, long-distance and wireless phone service, as well as high-speed Internet access.
"You'll now see the reformatting of the industry around what makes sense to the consumer," Seidenberg said at a Washington news conference.
But Bell Atlantic's competitors, joined by consumer groups, derided the move as premature, arguing that the company's entry into long-distance would give it an unfair advantage and undercut competition. Under the Telecommunications Act of 1996, local companies may expand into long-distance only after opening their own markets to competition--something Bell Atlantic's critics say the company has not fully done.
Now it falls to the Federal Communications Commission to decide if New York is a competitive marketplace for local phone service. That question is at the center of the 90-day review Bell Atlantic triggered yesterday. Though local companies have pursued the right to offer long-distance in five other states--asserting that their own markets are open to competition--none has persuaded the FCC.
"Whoever gets in and gets FCC approval, it will be a road map or an indication for others what it takes to get in," said Selim Bingol, a spokesman for SBC Communications Inc., which is pressing for approval in Texas.
For Bell Atlantic, New York is merely the beginning of a global strategy. The company has filed to enter the long-distance markets in Massachusetts, New Jersey and Pennsylvania.
Even Bell Atlantic's critics concede the company has done more than any other to open the doors to competition in New York. The chairman of the New York Public Service Commission, Maureen O. Helmer, yesterday released a statement expressing pleasure that "Bell Atlantic's progress in meeting the terms" of the telecom act "has reached the point of filing with the FCC."
Helmer's views carry weight. During the next 20 days the FCC must ask her commission for advice on whether to approve the application. For more than two years the Public Service Commission has worked with Bell Atlantic on the filing, extracting concessions from the company aimed at fostering greater local competition in exchange for the promise the commission would eventually support the application.
"The cooperation of all the parties during the course of this review has facilitated a tremendous amount of progress by the company in opening its local market to competition," Helmer said. "If the filing is consistent with the terms and commitments that we have established, and the record we have developed over the past 2 1/2 years, I am optimistic that I could offer my support."
The FCC is expected to lean heavily on the New York commission's findings. Yesterday, FCC Chairman William E. Kennard appeared to buttress that view with his own statement, even as he avoided a prognosis. "I applaud the New York Public Service Commission for their work on Bell Atlantic's application," Kennard said. "We share the same commitment to increased local competition."
In an interview, Seidenberg, the Bell Atlantic chairman, declined to offer specifics on the company's conversations with the New York commission, but he expressed confidence the commission would support the application.
"I don't believe we're rolling the dice," Seidenberg said. "We know what they believe. We've answered their questions."
Meanwhile, long-distance companies, and those that compete for local business, maintain Bell Atlantic has yet to develop systems capable of processing thousands of orders from customers who want to change local carriers.
"They're just not there yet," said H. Russell Frisby Jr., president of CompTel, which represents some three dozen competitive local phone companies, including AT&T Corp. and MCI WorldCom Inc.
Bell Atlantic says otherwise. "Our systems are ready," said James G. Cullen, Bell Atlantic's president and chief operating officer, dismissing his competitors as "serial whiners."