Bells and GTE hope to win by losing at Supreme Court

Article Abstract:

Some local telephone players may hope to lose a Supreme Court case over the FCC's plan for competition, because it could possibly result in the repeal of a 'forward-looking' pricing model. The FCC introduced this system shortly after implementation of the Telecommunications Act of 1996, which forces local telephone incumbents to open their networks to rivals that seek to enter the approximately $100 billion local market. All 50 states then received an FCC order on establishing prices for local phone companies' networks that might interest new competitors. The forward-looking model allows local incumbents to collect charges based on the most modern and efficient type of network. This prompted the five Bells and GTE to sue the Government for lack of authority on the matter. The US Court of Appeals for the Eighth Circuit in St. Louis agreed with the plaintiffs in 1997, but many states have since adopted similar pricing schemes. Returning jurisdiction to the Eighth Circuit could allow it to review the FCC's uniform pricing rule.

United States. Federal Communications Commission, Litigation, Lawsuit/litigation

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U.S. opposes application by BellSouth: long-distance proposal said to be premature

Article Abstract:

The US Justice Department recommended prohibiting BellSouth from offering long-distance service in South Carolina. BellSouth failed to open its local network sufficiently to earn permission for competition with long-distance carriers such as AT&T, according to the department. The FCC is expected to follow the department's recommendations when it rules on the BellSouth application by late Dec 1997. This marks the third rejection of a Baby Bell's effort to enter the $80 billion long-distance market in as many applications. Baby Bells first must open their local systems to competitors before receiving permission to offer long-distance service within their regions, according to the Telecommunications Act of 1996. Atlanta-based BellSouth demonstrated 'important progress' in opening its local markets but needs to show more improvement, said Joel I. Klein, chief of the Justice Department's antitrust division.

Domestic Voice Telephone Service, United States. Department of Justice, Long distance telephone services, BellSouth Corp., BLS, Domestic telephone services, Long-distance telephone service

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Upstarts' risky challenge to Baby Bells

Article Abstract:

Competitive local exchange carriers seek to sell businesses wholesale quantities of local telecom service at a rate lower than the Regional Bell companies. Participants in this market include RCN Communications, ICG, Telignet Inc., McLeodUSA Inc. Because these businesses are borrowing to build up their infrastructure, their stocks are very sensitive to small changes in interest rates, and have high volatility ratings. Some analysts say if the Internet succeeds as the medium for future telecom services, these companies will do well.

United States, Telecommunications, Financial analysis, Securities

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