The combined GTE-Bell 
Atlantic company, called Verizon Communications, said it signed an agreement with the Federal Communications Commission yesterday to make the voluntary payment of $2.7 million to end an FCC investigation. The company said it will step up its efforts to comply with FCC rules that require larger telephone carriers to provide smaller, local carriers with equipment space in their central offices.
Dominant carriers typically allow smaller, rival phone companies to use equipment storage space in their central offices, usually with dividers or walls to separate each company's equipment.
In March 1999, the FCC issued new rules that require dominant phone carriers to let the smaller companies set up equipment wherever they find available space in the offices to get the equipment installed faster.
For example, rival companies no longer need to set up their equipment with dividers or walls. The industry calls the lack of dividers or walls a "cageless" collocation. The FCC set a June 1, 1999, deadline for this change.
A Verizon spokeswoman said that GTE had every intention of abiding by the new requirements but that the two-month window to change the way the company typically deals with collocation just wasn't enough prep time.
"We were working on trying to implement the new rules...but two months was not enough time to get everything in place," said Briana Gowing, a spokeswoman for the company. She said that at the time, the company was figuring out the best way to provide the space for its competitors while still protecting the safety of its own network and equipment. She also said the company was working on other issues such as how to price the new requirement.
Separately, the U.S. Court of Appeals in the District of Columbia yesterday unanimously rejected an appeal by AT&T to reverse the FCC's approval of Bell Atlantic's rights to sell long-distance phone service in New York.
AT&T, a longtime Bell Atlantic rival, filed a complaint with the FCC last month, claiming that Bell Atlantic markets its service illegally to customers inquiring about long-distance alternatives.
For some time, local phone giants such as Bell Atlantic, SBC Communications and other Baby Bells were forbidden from offering long-distance service until certain competitive requirements were met. Some of those requirements include informing potential customers that they have a right to choose their own long-distance provider.