FCC Approves Bell Atlantic Application to Provide Long Distance Service in New York

(December 23, 1999) The Federal Communications Commission approved Bell Atlantic's application to provide long distance telephone service in New York State. This is the first Section 271 application which the FCC has approved.

The Federal Communications Commission announced its landmark decision on December 22, 1999, three years after the Telecom Act of 1996 authorized the FCC to permit the Regional Bell Operating Companies (RBOCs) to provide in region InterLATA service, if they first meet the checklist of requirements in Section 271 of the Act.

The FCC rejected all five previous section 271 applications, stating that the local phone companies had not sufficiently opened their local service monopolies to competition. The Commission's vote was 5-0.

"This is an historic moment for the American consumer, and it is an historic moment in the history of the Telecommunications Act," said FCC Chairman William Kennard in a prepared statement.

William Kennard

Kennard continued that "while this action concerns long distance, the real story here is about opening up the local market for voice and broadband services. Today's action begins the delivery of one of the central promises of the Telecommunications Act of 1996 -- consumer choice in local telephone service and in new choices in the technologies of the 21st Century."

"I look forward to repeating this day for the consumers in every state," concluded Kennard.

Commissioner Michael Powell stated that "Contrary to some pundits’ speculations, our eyes were not suddenly opened by political pressure, industry coercion, or impatience but by the relentless efforts of the applicant and the New York Public Service Commission to identify and resolve the myriad issues involved in demonstrating compliance with the statutory requirements."

Bell Atlantic was pleased with the decision. It plans to begin offering long distance service on January 5. The phone company issued a press release, but it contained little information about the new services that it will provide, except that it will be "a stream of innovative new products at competitive prices."

BellSouth Vice Chairman Jere Drummond praised the FCC. BellSouth will soon be filing its own Section 271 application to provide long distance service in Georgia.

"Our markets are wide open in Georgia and have been for some time," Drummond said in a press release. "Competitors are entering, competing for customers and winning them. That's the standard the FCC should use when it evaluates BellSouth's upcoming request to offer competitive long-distance service to Georgia consumers."

U S West also wants to provide long distance service. Mark Roelling, a U S West Vice President stated that "This is good news for consumers, who want the ease and potential savings of choosing a full package of services from the provider of their choice. As the big long distance companies merge with each other, the industry will finally have some real competition from companies like Bell Atlantic, and soon, U S WEST."

Long distance provider MCI WorldCom also welcomed the decision. Michael Salsbury, MCI WorldCom General Counsel stated that "MCI WorldCom looks forward to competing against Bell Atlantic."

"Bell Atlantic's imminent entry into long distance in New York clearly illustrates what MCI WorldCom and Sprint explain in their merger application to the FCC - that the telecom market is shifting quickly toward global carriers providing bundles of voice, wireless and broadband Internet access services," said Salsbury in a prepared statement.

"Bell company long distance market entry, coupled with AT&T's plans to provide local and broadband service nationwide through its closed cable systems, demonstrates why the combined MCI WorldCom-Sprint will be a pro-competitive force in providing a third connection to homes and businesses."

AT&T was not pleased with the decision, and will likely file a court appeal to block the FCC decision.