Bell Atlantic CEO Calls for New Regulatory Approach for Digital Era

Bell Atlantic CEO Calls for New Regulatory Approach for Digital Era

February 26, 1998

WASHINGTON -- After 15 years of watching the U.S. economy enjoy the
benefits of a more competitive communications industry, governments
all over the world are looking to ignite the same cycle of growth,
innovation and investment through sweeping deregulatory agreements,
according to Ray Smith, Bell Atlantic chairman and chief executive
officer.

In an address today at the Federal Communications Bar Association in
Washington, D.C., Smith said the next 18 months will be crucial in
determining whether the United States will continue to be a world
leader in an industry that will be central to our economic prosperity
in the 21st century.

"Near term that means taking a fresh look at how we implement the
Telecommunications Act of 1996 and taking immediate action to fully
deregulate markets that are already competitive," Smith said.
"Further down the road, it means looking beyond the specifics of the
act to envision a regulatory framework fit for the digital era - a
framework that treats communications as an industry governed by the
same unstoppable market forces that are re-making the global economy."

Smith went on to examine the role of the Telecommunications Act in
opening all communications markets. "The rate of change in the local
circuit-switched market has been dramatic," he said.

Pointing to Bell Atlantic's extraordinary efforts to exceed the
requirements of the act, Smith said nearly $1 billion is being
invested and more than 1,000 Bell Atlantic employees are devoted
solely to opening its networks to competition. Smith said, "Bell
Atlantic is holding itself to a higher standard than is required by
law to ensure that our markets are open and accessible to
competitors."

While progress is being made toward full competition, Smith said Bell
Atlantic still has concerns with the details of how the legislation is
being implemented. He believes several steps can be taken to
accelerate the opening of all markets.

For example, Bell Atlantic believes that Congress may wish to provide
clearer direction to the Federal Communications Commission (FCC) about
the size and scope of the universal service fund. He also called for
the FCC to remove the regulatory restrictions that are inhibiting
investment in wide-scale data networks and for state regulators to
deregulate business and data markets, which "by any measure, are
already hotly competitive.

"Ultimately, we will have to stop thinking about the communications
industry as a stepchild of monopoly and begin regulating it like we do
other businesses: by focusing on consumer protection and antitrust
compliance rather than economic regulation," Smith said. "That is the
best protection for the American consumer who will benefit from a fair
and open marketplace."

Smith said the reward for changing regulatory policy to fit the
digital age will be continued U.S. leadership in the most critical
industry in the global economy and a new cycle of investment,
innovation and growth.

Bell Atlantic -- formed through the merger of Bell Atlantic and NYNEX
-- is at the forefront of the new communications and information
industry. With 40.5 million telephone access lines and six million
wireless customers worldwide, Bell Atlantic companies are premier
providers of advanced wireline voice and data services, market leaders
in wireless services and the world's largest publishers of directory
information. Bell Atlantic companies are also among the world's
largest investors in high-growth global communications markets, with
operations and investments in 21 countries.