Us West Is Closer To Long-Distance Venture Company Receives Backing Of Justice Department In Effort To Compete In More States
US West would be allowed to provide long-distance service outside its 14-state region if customers also buy local phone service from the company, according to a plan unveiled Wednesday by the Justice Department.
The first of its kind, the plan would generate competition to regional Bell companies, which in many areas of the country continue to be the primary provider of local phone service to residential and business customers.
The plan must be approved by U.S. District Judge Harold Greene, who oversees a consent decree that broke up AT&T in 1984 and barred the Bell offspring from a number of businesses, including long-distance. AT&T agreed to the US West plan.
It marks the second time the Justice Department has backed a regional Bell company’s request to provide long-distance service. In April, the department endorsed a plan for Ameritech to provide long-distance service to two cities - Chicago and Grand Rapids, Mich. - located within its local phone territory. That plan also must be approved by Greene.
David Turetsky, deputy assistant attorney general for regulatory matters in the Justice Department’s antitrust division, contends that the US West plan would benefit residential and business customers by expanding choice and lowering prices for local, long-distance and other communications services.
US West plans to offer the services only in markets where it has cable systems, said spokesman Steve Lang.
US West has financial interest in Time Warner Entertainment, which operates cable systems in 24 of the top 50 markets, serving 9.2 million customers.
Those cable markets include Atlanta; Rochester, N.Y.; New York; Orlando, Fla.; and northern Ohio, Lang said. Atlanta may be one of the first markets to receive local and long-distance services from US West, assuming the necessary federal and state regulatory approvals are received, Lang said.
William Barfield, associate general counsel of BellSouth, which offers local phone service in nine states, called the plan “pro-competitive.”
BellSouth is not afraid to compete against another Bell company for local phone customers, he said. “We have good services that are fairly priced and that’s what competition is all about.”
Nynex vice president of federal policy Jeff Ward said his company also supports the plan.
Both executives said changes are needed in federal communications laws. The House and Senate passed telecom reform bills this year but have not reconciled differences between them.
Depending on the market, US West would need state regulatory approval to provide local phone service outside its territory, but it doesn’t need federal permission to do so.
The plan is important to US West because it would free the company to offer millions of customers outside its 14-state territory one-stop shopping for local, long-distance and cable television services, Lang said.
To be capable of carrying telephone calls, the cable systems have to be upgraded with expensive, and, in some cases, experimental technology and equipment.