LETTERS: TELEPHONE COMPETITION

To the editor:

When the Federal Telecommunications Act was adopted earlier this year, it was intended to open up competition at all levels of the telecommunications industry. The goal was to usher in a new era of advanced services at affordable prices for consumers.

Hearings were held recently in Jefferson City that will open up monopoly markets in Missouri to local telephone competition. The case is among the most important the Public Service Commission will hear this year, ultimately deciding whether competition succeeds or fails in the state, and helping to determine how nearly every Missourian uses the phone for years to come.

The PSC hearings are designed to resolve differences between AT&T and the local monopoly (Southwestern Bell, GTE and Sprint, depending on the market) and permit local-service competition. One of the major issues involves the price that the local monopoly wants to charge competitors to connect with its facilities and resell its services.

Reselling is the quickest way to allow competition for local service, permitting a new provider to serve all customers -- residential and business -- statewide. Without reasonable pricing, new providers will not be able to offer competitive local service. Once gaining entry in a market, new providers can eventually establish their own facilities for switching, networks and new services.

A federal appeals court recently continued a freeze on federal pricing rules designed to force monopolies to extend discounts and other advantages to competitors entering their local phone markets. While this ruling was disappointing, it is important to recognize that the only question before the court is whether the FCC had the authority to adopt the pricing rules. Regardless of how that question is ultimately answered, the Telecom Act remains the law of the land. The FCC rules not only follow the intent of that act, they reflect sound public policy. State commissions, like the PSC, should therefore use them as their guide as they continue with their proceedings to open local markets to competition.

The monopoly providers, meanwhile, have already concluded agreements with some companies to provide local service. But from a competitive standpoint, the impact of these agreements is quite limited. Most are niche markets that probably represent less than 1 percent of all consumers in Missouri. They will, in fact, barely dent the current monopoly markets.

As in any other industry, opening up real telecommunications competition statewide will directly benefit customers. An open marketplace with many companies fighting for business means Missourians will enjoy not only more competitive pricing, but also more services and options to fit individual needs. A healthy competitive climate and advanced telecommunications services will also bring in new businesses and more jobs, all of which is good for economic growth in Missouri.

The PSC is expected to rule on pricing and other key issues by the end of the year. That decision, combined with a favorable federal court ruling upholding the pricing rules, will clear the way toward greater choice and value for Missouri consumers.

STEVE WEBER, Director of Government Affairs

AT&T

Jefferson City