Originally created 01/20/99

FCC considering plan to boost high-speed phone service.

WASHINGTON -- Regulators are considering letting major local phone companies provide high-speed data services within their states as long as they do so through a separate subsidiary.

The move is being prompted because popularity of the Internet is causing congestion on telecommunications networks. While a voice phone call lasts, on average, three or four minutes, when people go online, they average 28 minutes.

Existing regulations bar the nation's five regional Bell companies from moving data across local calling boundaries -- known as LATAs -- within their states because that would constitute "long-distance" service.

But the Federal Communications Commission later this month will decide whether to ease those restrictions for the regional Bell telephone companies. It would be part of a larger proposal to give local phone companies incentives to build faster connections to America's homes and ease Internet congestion.

The agency is expected to adopt a final plan on Jan. 28.

But some Bell companies aren't all that interested.

"We are not at all enamored by it," said Robert Blau, vice president at BellSouth Corp. "It doesn't buy you much in terms of offering data services which are inherently interstate."

Other Bells have made similar comments.

And long-distance companies don't like the idea either.

Bell companies currently have to open their local phone markets to competition if they want the "carrot" of providing long-distance service -- be it data or telephone.

The FCC proposal "would let the Bells eat half that carrot without opening their markets to competitors," complained AT&T vice president Leonard Cali. "It permanently reduces their incentive for opening markets for other services."

The Bells also have complained about having to set up a separate affiliate to provide high-speed data services to get regulatory relief. They argue this would be burdensome and increase the costs of providing the services.

But AT&T, MCI WorldCom and other long-distance providers complained that the separate affiliate provisions weren't strong enough to prevent the Bells from extending their current monopolies into the data services business.


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