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Bell Atlantic poised for competition

The Baby Bell's bid for long distance service in New York brings the telco closer to competing head-to-head with AT&T and its bundled services, including high-speed Net access.

Bell Atlantic has approached New York state regulators to ask for their endorsement of the company's bid to enter the lucrative long distance market.

If the state regulators approve, and federal regulators follow suit later this year, Bell Atlantic would be the first Baby Bell to be able to offer long distance services.

The step is a critical one for the telco. It will allow Bell Atlantic to compete directly with AT&T by offering bundled packages of high-speed Internet, as well as local and long distance telephone service, similar to the service the long distance giant currently offers over its cable networks.

The Bell companies have been pushing since 1996 for permission to enter the lucrative long distance market, but are required by law to prove they have opened their local markets to competition first.

The big local providers have asked the Federal Communications Commission to approve their efforts in five different states over the last few years. Yet each time federal regulators have denied the requests, saying the companies' still had far to go in opening their local markets to competitors.

Bell Atlantic has been working with New York state regulators for the last two years to make sure its application is approved, however. As a result of this process, which included an exhaustive test of its operations systems by an outside consulting group, analysts have long expected it to be the first telco to win the coveted green light for long distance service.

"No American telephone company has been subjected to the stringent performance standards that Bell Atlantic has been subjected to in New York," said Shannon Fioravanti, a company spokeswoman. "There is no going back. These markets are open."

About 130 companies now compete with Bell Atlantic in New York, she added. The company will not divulge how many customers these competitors have taken away from the Baby Bell, however.

The big long distance companies--which will face steep new competition if Bell Atlantic is allowed in their markets--say the company still hasn't finished the job of opening its local markets.

AT&T called last night's filing "premature," and said the company still needs to fix connectivity problems between its systems and rivals' networks. A spokeswoman for MCI WorldCom said Bell Atlantic still had another several months of work to do on its operations systems before state regulators would be likely to approve the application.

If Bell Atlantic is finally allowed into long distance markets, it will be able to put together a package of services that will rival the data, voice, and wireless service bundles now being pushed by companies like AT&T and MCI WorldCom.

The company is rolling out high-speed DSL Internet services across its region, but the services are still slightly more expensive than cable Net access services from AT&T and others. Bundling high-speed Net service with a full suite of local and long distance plans will make the offerings that much more attractive, analysts say.

The company expects to have an answer from the New York state regulators by late May or early June, Fioravanti said. Bell Atlantic will then take its bid to the FCC, which will have 90 days to rule on the request.