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BELLS' LONG-DISTANCE CHAINS LOOSENED

WASHINGTON-The telecommunications reform bill introduced in the House last week would give the seven regional Bell telephone companies more freedom to offer wireless long-distance service than offered by the waiver granted late last month by U.S. District Judge Harold Greene.

The House measure, sponsored by Commerce Committee Chairman Thomas Bliley, R-Va., and a handful of Democrats, would let Bells offer wireless long distance immediately with few strings attached. The Senate telecommunications bill would do much the same.

Telecommunications bills in both houses leave commercial wireless carriers largely deregulated. Nevertheless, Greene’s ruling is seen as a big victory for the Baby Bells in light of the uncertain fate of telecommunications legislation in the 104th Congress.

“Our wireless customers now will be able to make long-distance calls, regionally or coast-to-coast*…*We intend to compete toe-to-toe with AT&T Corp. and others to provide long-distance services to wireless customers,” said Jim Young, vice president and general counsel for Bell Atlantic Corp.

AT&T, the leading U.S. cellular carrier since acquiring McCaw Cellular Communications Inc. last year, is not subject to any geographic restraints but is required by a court consent decree to provide long-distance equal access.

It is unclear, though, whether regional Bells will have as wide a latitude to offer long-distance wireless service as envisioned by Young. Before they can do anything, each regional Bell must submit to the Justice Department a plan for how it plans to comply with conditions that must be met before long-distance wireless can be provided.

The restrictions were imposed because Greene believes Bells can leverage their monopoly landline bottlenecks to thwart long-distance competition. As such, Bells are limited to reselling long-distance service from at least three interexchange carriers. The regional telephone giants cannot offer facilities-based long-distance service.

Second, Bells can offer wireless long-distance only in areas where there is an alternate access service provider. Today, long-distance carriers rely primarily on local telephone companies for access to customers. While competitive access providers bypass the Bells, there are not many of them.

Bell wireless subscribers cannot be forced to buy long-distance service from the telephone company, either. They can select the long-distance carrier of their choice. Furthermore, the court decision requires the regional Bells to use separate sales personnel to market local and long-distance wireless service.

“Such restrictions effectively allocate the wireless long-distance market among the top three long-distance companies” and “deprive consumers of benefits they would otherwise receive from the effects of unbridled competition,” said BellSouth Corp.

AT&T and MCI Communications Corp., the nation’s two largest long-distance telephone companies, respectively, applauded the safeguards set by Greene. While Bells prefer the long-distance wireless provision in telecommunications reform legislation over the Greene waiver, there is no guarantee Congress will pass a bill this year.

A telecommunications bill, which would allow regional Bells, long-distance carriers and cable TV operators into each other’s business, passed the House but died in the Senate last year when Democrats ruled Capitol Hill.

This year, legislation once widely described as bipartisan has again become increasingly embroiled in partisan debate. Even Republicans, who now run Congress, are at odds with each other.

House Judiciary Committee Chairman Henry Hyde, R-Ill., wants a telecommunications bill that gives the Justice Department a prominent role. Neither the House nor Senate measure does so. The Clinton administration also believes Justice should have more responsibility in telecommunications reform.

In the Senate, Communications Subcommittee Chairman Bob Packwood, R-Ore., and John McCain, R-Ariz., intend to offer a series of deregulatory amendments to the bill championed by Commerce Committee Chairman Larry Pressler, R-S.D., when it reaches the floor.

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