Bell Atlantic, Competitors Propose Settlement To PUC Global Telecom Order

HARRISBURG, Pa. -- A diverse group of telecommunications companies and other interested parties today filed a compromise proposal with the Pennsylvania Public Utility Commission (PUC) designed to accelerate competition and avoid lengthy litigation. If adopted by the Commission, the proposal would increase consumer savings, expand the availability of affordable telephone service for low-income customers, fuel local phone competition in rural areas and hasten full competition throughout the Commonwealth.

The proposal is in response to a November 1999 invitation from the PUC, which called on the parties to negotiate a settlement in lieu of pending court appeals by Bell Atlantic over recent Commission telecommunications decisions. Bell Atlantic filed the appeals after the Commission issued a global telecommunications order Sept. 30 that, among other things, wrongly requires Bell Atlantic to split its Pennsylvania operations into two separate companies. Bell Atlantic filed appeals in state and federal courts.

"This proposed settlement represents a true compromise by all facets of the telecommunications industry - major incumbent and new local phone companies, long-distance providers, and parties representing key consumer interests," said Daniel J. Whelan, president and CEO of Bell Atlantic - Pennsylvania. "The settlement was achieved through intense negotiations over the past month and a half.

"This proposal will bring additional benefits to Pennsylvania consumers and businesses by further reducing prices for our competitors, and it removes the illegal, discriminatory requirement to split Bell Atlantic's Pennsylvania operations into two separate companies," said Whelan. "It also will provide us with a clear path to obtaining Commission support for Bell Atlantic to offer long-distance service in Pennsylvania.

"In short, this proposal will bring certainty and stability to Pennsylvania's telecommunications marketplace, and it will speed full competition in the Commonwealth. We urge the Commission to approve it as quickly as possible."

Following are highlights of the proposal:

• Bell Atlantic will further decrease the prices competing companies pay to lease portions of its network in rural areas by an additional four percent, or 75 cents, per month for two years after Commission approval of the settlement. With this latest reduction, the price for an "unbundled loop" in rural areas will have decreased nearly 30 percent from the original price.
• The "Rural/Residential Resale Promotion" - which offers competitors a deeper discount to resell Bell Atlantic's lines to rural and residential customers - will be available for two years instead of one.
• The fees long-distance companies pay Bell Atlantic for completing long-distance calls on Bell Atlantic's local network will decrease another 17 percent, to .75 cents a minute. This is in addition to the five-year, $300 million decrease in access fees required in the Commission's September 1999 global telecommunications order.
• Bell Atlantic and other local telephone companies will expand a "Lifeline" service offer to customers within 150 percent of the poverty level. Lifeline allows eligible customers to receive monthly reductions of $5.25, and in some cases as much as $9, in their local phone service. In addition, Bell Atlantic will contribute $500,000 over two years to help fund development of an automatic enrollment program for eligible customers.
• Bell Atlantic will form a separate affiliate that will offer high-speed, "packet-switched" services such as DSL (digital subscriber line) and frame relay to customers. Bell Atlantic has agreed to form a similar affiliate to offer such services in New York. This affiliate will use Bell Atlantic's computer systems for ordering and providing service in the same way Bell Atlantic's competitors do today.
• Bell Atlantic will be able to give the PUC 100-day notice that it intends to file with the Federal Communications Commission to offer long-distance service in Pennsylvania any time after KPMG files its draft final report on testing of Bell Atlantic's computer systems. The KPMG report must show that no more than eight percent of the test items are unsatisfactory, and that none of the items can have a material adverse effect on competition.

Timely Commission approval of the proposal will enable Pennsylvania to remain among the first tier of states to gain full telecommunications competition. "We only have to look at New York to see the benefits of full competition. Bell Atlantic today is offering New York consumers some much-needed choice for their long-distance business, and the long-distance companies are competing vigorously for New Yorkers' local phone service," said Whelan.

"Bell Atlantic has consistently gone the extra mile to reach reasonable compromises in the PUC's global telecommunications process," he added. "Our overriding goal has been to hasten full telecommunications competition in Pennsylvania just as Bell Atlantic has done in New York."

Bell Atlantic is at the forefront of the new communications and information industry. With more than 43 million telephone access lines and more than 10 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 23 countries.