Originally created 09/17/97

BellSouth, competitors take expansion hopes to PSC



ATLANTA (AP) - BellSouth is making a new pitch to the Georgia Public Service Commission to enter the long-distance market.

The PSC began a weeklong hearing on local and long distance telephone service on Monday. While BellSouth is seeking long-distance service, rivals like AT&T and MCI have been complaining about the rates BellSouth would like to charge for connecting to its network for local market service.

Both markets are lucrative.

Long-distance - which BellSouth has been forbidden to offer since being created in 1984 - represents a $10 billion market in the nine-state BellSouth region and $2.5 billion in Georgia. BellSouth Chief Executive Duane Ackerman has said he thinks the company would get about $1.6 billion a year of that business.

Local service accounted for $14.8 billion in BellSouth revenue last year.

BellSouth wants the PSC to recommend to federal officials that it be permitted into long-distance - an endorsement already made by regulators in South Carolina and Louisiana. The PSC, which rejected BellSouth's request in March, is scheduled for another vote next month.

First, the PSC must decide what BellSouth can charge competitors for using pieces of its network.

BellSouth says its studies show the basic "loop" that connects a customer home to a central switch costs $25.28 a month. Competitors say their studies show the same loop costs $14.42.

Alphonso Varner, BellSouth senior director for regulatory affairs, told the PSC that the company would have to make up the difference, likely to come from rate hikes.

"The competitor benefits but the end-user loses," Varner said.

He said customers in rural areas most likely would see their local rates rise because it costs more to provide them service. It's also an area where the company probably would face the least competition.

AT&T attorney James Lamoureux said BellSouth plans to charge competitors up to $150 in one-time fees for connecting every customer.

"Wouldn't that cost be a barrier to entry?" Lamoureux said.

About 40 companies have signed agreements to offer local service in Georgia by connecting to BellSouth.