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Bells to wait for new FCC rules

Baby Bell companies agree to abide by existing contracts with competitors while the FCC plans to craft new rules governing local phone competition.

Baby Bell companies have agreed to abide by existing contracts with competitors while the Federal Communications Commission crafts new rules governing local phone competition, according to the nation's top regulator.

In a speech to a telephone industry trade association meeting yesterday, FCC chairman William Kennard said that each of the regional Bell operating companies and GTE would maintain their relationships with competitors until the FCC revises current law later this year.

The Bells could have challenged existing contracts, after a recent Supreme Court decision called into question FCC rules forcing local companies to lease their networks to rivals at wholesale rates.

Kennard said his agency would work quickly to draft new rules in an effort to boost the momentum behind local phone competition.

"I am committed to finalizing the standard for the network elements by early summer," Kennard said. "We've got to put this matter to rest. The marketplace needs stability."

The issue is critical to companies that lease elements of a local Bell company's network to provide competing telephone or data services. These companies range from small local startups to long distance giants such as MCI WorldCom which are attempting to enter local markets.

These companies have benefited from the 1996 Telecommunications Act's requirement that Baby Bell companies lease "unbundled network elements," in an effort to create local competition in the business and consumer market. Late last month, the Supreme Court upheld the FCC's power to make rules based on the Act, but nevertheless questioned the commissions' actual rulings over competition issues so far.

Industry growth
Separately, the U.S. Council of Economic Advisors released a report yesterday detailing the growth in telecom industry, much of it since the passage of the 1996 law.

U.S. Commerce Secretary William Daley said last month's Supreme Court ruling, which solidified the FCC's power to interpret and enforce the Act, would help speed the industry's growth.

"Critics are right that it has taken too long for consumers to benefit from competition," Daley said in prepared remarks for the release of the report. "The problem, in part, has been that the industry and the FCC have been tied up in lawsuits."

"Following the Supreme Court ruling on the FCC's authority, we expect to see more competition in local markets around the country, as the FCC moves quickly to enforce market opening regulations," Daley added.