Just two months after U.S. District Court Judge Harold Greene ruled cellular affiliates of regional Bell operating companies would be eligible to provide long-distance services to their wireless customers-deviating from a previous judgment established when AT&T broke up in 1982-RBOCs are rapidly charting their long-distance courses, while awaiting government’s careful consideration.
Greene’s judgment is a victory for telcos, but claiming the prize won’t be easy. “The Justice department said it’s OK, but still there are many restrictions,” said Wendy Carver-Herbert, media relations manager for U S West NewVector Group Inc.
Under the ruling, Bells can market service to wireless customers only, not to utility telephone customers. RBOCs must resell long-distance service from at least three interexchange carriers; they cannot offer facilities-based long-distance services. These companies can offer wireless long-distance only in areas where there is a competitive access provider. Further, Bell wireless subscribers cannot be forced to buy long-distance service from the telephone company. Also, regional Bells must use separate sales personnel to market local and long-distance wireless services.
A company’s first step to market is filing a compliance plan with the Justice Department detailing its long-distance business plans. Within 90 days of filing, an RBOC can expect a response. U S West, Bell Atlantic Nynex Mobile BellSouth Cellular and others currently are in this initial process and haven’t indicated further plans.
Ameritech cellular services has not determined what role it might play in the long-distance arena, said Marybeth Johnson, the company’s director of public relations. It is likely the company won’t announce plans any time soon, she added.
Dashing to market is Southwestern Bell Communications Services Inc., formed under SBC Communications Inc. to offer long-distance services. Based in San Antonio, Texas, the new division seeks to provide intrastate long-distance services. Paul Dusseault, an SBC spokesman, noted the ruling also means competition for cellular customers. A Bell wireless affiliate can seek permission to provide long-distance services to other companies’ wireless customers, he said. As such, SBC has sought permission to resell long-distance services to customers of McCaw Cellular Communications Inc., now AT&T Wireless Services.
Through its AirTouch Cellular division, AirTouch Communications Inc.-a spinoff from Pacific Telesis Group-introduced long-distance services in its Atlanta, Los Angeles, San Diego and Sacramento, Calif., cellular markets last November, said corporate spokeswoman Amy Damianakes, prior to litigation regarding the company’s status as an independent company from PacTel. Judge Greene has not yet announced a decision in that matter. In the event of an unfavorable ruling, Damianakes said AirTouch will take the matter to another court. “It’s critical there be competitive parity among the players,” she said.
Jim Gerace, public relations manager for Bell Atlantic Nynex Mobile, said the newly formed company-a merger of Bell Atlantic Corp.’s and Nynex Corp.’s wireless divisions-will enter the long-distance arena as soon as possible. However, Gerace contends that until regional Bells are authorized to provide more telecommunications services, like telecom giant AT&T Corp., they are restricted from reaching their full competitive potential.
Such competition might exist if government passes a telecom deregulation bill, currently in Congress, which would allow Bellcos and companies in other communications sectors to enter each other’s businesses.
EDS Management Consulting Services reports the Bells could quickly gain 22 percent to 30 percent of the long-distance market with the further deregulation because, desiring simplicity, customers would prefer paying just one bill for a host of services. According to the Federal Communications Commission, AT&T Corp. currently holds about 59 percent of the long-distance market, followed by MCI at 19 percent, Sprint at 9 percent and all others about 14 percent.
