Kansas regulators yesterday gave a thumbs down to Southwestern Bell's bid to move into the long distance market in that state, saying the company has not opened its markets enough for competition. Meanwhile, Oregon regulators ruled that US West and GTE must open their local networks directly to competition.
The decisions parallel other recent rulings that are slowly forcing open the once monopolistic Bell networks. Yesterday, Colorado regulators told US West to open its network to at least one other competitor in that state.
Southwestern Bell, which is owned by SBC Communications, had asked state regulators to endorse its efforts to enter the long distance market in Kansas. But utilities commissioners released a report yesterday that said the Bell had only completed about half of a checklist of items measuring how much it has opened its markets. Regulators could not approve the company's applications until it had completed this checklist, they said.
SBC officials put a positive spin on the report, saying the extra work would help them once the company makes its final long distance application at the federal level.
"In order for us to compete in this market, the 1996 Telecommunications Act requires us to open our local networks to competitors, and we have done that," said Shawn McKenzie, president of Southwestern Bell's Kansas operations. "We look forward to working with the [Commission] to address the remaining issues in our application."
SBC's future rivals in the long distance market, most of which have actively lobbied against similar Bell applications across the country, took predictable delight in the decision.
"MCI Worldcom wholeheartedly agrees with the Kansas [regulators'] decision to hold Southwestern Bell's feet to the fire," said C.K. Casteel, regional executive for MCI WorldCom public policy. "The commission's ruling sends a crystal clear message to Southwestern Bell: Comply with the law and open your local phone monopoly to competitors, or it will be a long time before you see long distance entry."
Although the Federal Communications Commission has the last say in these decisions, many of the baby Bells are first trying to win state regulators' approval, hoping to improve their chances in Washington. As yet, the FCC has turned down applications in four different states.
US West, GTE lose network access fight
Meanwhile, Oregon regulators have taken a long step forward in their own eight-year effort to kick-start competition in local telephone markets.
State utility commissioners once planned to force incumbent companies to offer competitors network elements in ready-to-use packages. This would have given rivals near-painless access to the pieces needed to start up a competing local phone service.
A recent court decision blocked regulators from doing this, however. Instead, regulators have now decided to give new local telephone companies the power to tap directly into US West and GTE networks.
The regulators' decision goes well beyond what both companies had wanted. Both had said they would allow competitors to install equipment in their central offices, as mandated by the 1996 Telecommunications Act. But the direct access plan would force them to spend more even money to help their competitors, they argued.
"It mandates that we make additional investments to accommodate our competitors when we already have a system in place that allows them to access the network," said Emily Harrison, a US West spokeswoman.
But the plan will make it easier and cheaper for competitors to gain network access, and should boost competition in the state, Oregon officials said.
"It's like the difference between you reaching into your pocket and taking out some change for somebody, and someone reaching in your pocket and getting the change for themselves," said Ron Karten, public information officer for the Oregon Public Utilities Commission. "They'll have the ability to get right in there. We think this will really get the process moving."
Oregon officials said they expected the companies to appeal the ruling. Harrison said US West has not had time to fully review the decision, and had not decided what its plans would be.