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Bell waits to flip long-distance switch

Federal regulators will announce their long-awaited verdict tomorrow on whether Bell Atlantic should be allowed to enter the lucrative long-distance market.

Federal regulators will announce their long-awaited verdict tomorrow on whether Bell Atlantic should be allowed to enter the lucrative long-distance market.

Analysts expect the Federal Communications Commission to approve the local phone company's application, allowing the Baby Bell to directly compete with companies such as AT&T and Sprint. The initial approval would cover only the New York market, leaving Bell Atlantic to apply separately for its other coverage areas.

Bell Atlantic and the other big local phone companies have sought entry into the $90 billion long-distance market since 1996, when Congress used this possibility as an incentive for firms to open their own local phone markets to competitors.

Local phone companies see this service as key in offering one-stop shopping packages of voice and high-speed data services that can compete with similar offerings from telecommunications giant AT&T.

But the FCC has refused to approve any previous applications, saying the Bells as a whole had not yet sufficiently allowed local competitors into their home turf.

"Someone has to be the first through the gate," wrote Prudential Securities analyst Susan Lynner in a research report yesterday. "We think that [New York regulators] have presented the FCC with the sort of massive, detailed record on which the FCC can hang its hat."

The approval of Bell Atlantic's application is likely to set off a flood of similar tests and applications, as other local phone companies use New York as an example, analysts say. SBC Communications is expected to file for long-distance approval in Texas next.

New York represents about 25 to 30 percent of Bell Atlantic's network traffic, making it a lucrative place to begin testing a full range of services.

The company has said it would begin selling long distance service almost immediately after getting the green light from the FCC.