THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, October 11, 1996 TAG: 9610110486
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 53 lines
The State Corporation Commission on Thursday began a series of hearings to help pave the road toward competition in local-exchange telephone service in Virginia.
Right away, the commission took up what is perhaps the thorniest issue as it tries introducing competition: the terms by which upstarts can lease the networks of current local-phone providers.
Companies like long-distance provider AT&T Corp. want steep wholesale discounts so they can profitably resell the phone services of Bell Atlantic Corp. and GTE Corp. to consumers. They say fair resale terms are critical to breaking up the current local-exchange monopolies.
But Bell Atlantic and GTE say AT&T and other aspiring providers of local services are asking for too much. They say if the three-member commission approves the big discount requests, those companies will go on reselling leased services undertheir own brands - without building ``local loops'' of their own that are crucial to full-fledged competition.
Overhanging the hearings is doubt about how far the commission can go without having its actions overturned. Bell Atlantic, GTE and other local phone providers around the country have appealed the Federal Communications Commission rules that Virginia's and other states' regulators are following to usher in local-exchange competition.
In the competitive free-for-all that's developing throughout telecommunications, local phone services looms as the biggest battleground of all. Americans spend an estimated $90 billion a year for local services, compared to about $75 billion annually for long distance.
It's important for providers like AT&T, MCI Communications Corp. and Cox Communications Corp. to have local phone offerings to accomplish their goals of being one-stop communications providers.
John Langhauser, an AT&T regional vice president, said eventually his company will build its own local-exchange network in Virginia to go along with its extensive long-distance network. In the meantime, he said, ``resale is absolutely key. It's the entry vehicle that enables us to enter statewide.''
AT&T wants 27.5 percent off Bell Atlantic's basic rates.
Paul Miller, a Bell Atlantic spokesman, said his company isn't disputing AT&T's or any other carrier's right to a discount. It's the amount of discount that's in question. Bell Atlantic's latest calculation calls for a 15.6 percent wholesale discount.
``We're optimistic the commission will agree that our finding is reasonable,'' said Paul Miller, a Bell Atlantic spokesman.
The commission's staff last week recommended a 24.2 percent wholesale discount.
The local-phone hearings, which are being held at the commission's headquarters in downtown Richmond, are scheduled intermittently through Dec. 10.
KEYWORDS: SCC TELEPHONES by CNB