Fcc Oks Safeguards For Phone Customers Rules Set Standards For Baby Bells Entering New Businesses

The government prescribed safeguards Tuesday designed to protect phone customers and companies as the Baby Bells enter new businesses, including making phone equipment and providing long-distance service.

The Federal Communications Commission’s rules for regional phone companies are part of a broad telecommunications law enacted Feb. 8 that frees local, long-distance and cable companies to compete on each other’s turf.

In unrelated action, the FCC, as expected, unveiled its so-called access reform proposal which offers two broad options for cutting the $23 billion in fees local phone companies collect for handling long-distance calls.

The Federal Communications Commission said it might allow the local carriers to continue levying access charges until actual local competitors emerge to force charges down.

The FCC expects to make a final decision in April or May. Its action could increase local phone bills and decrease long-distance ones.

Under the safeguards order, the FCC said local phone companies must form separate affiliates to conduct businesses such as making phones and other telecommunications equipment, providing long-distance service or transmitting stock quotes and other information.

The requirement to create separate affiliates for manufacturing and long-distance are set to expire in three years and the one on information services in four years, unless they are extended.

In a related order, the FCC said Bell companies must follow existing accounting standards for all these new businesses.

Early next year Bell companies are expected to begin applying to the FCC to provide long-distance service to their own customers.

Both FCC orders are designed to protect local phone customers from being forced to pay, through higher rates, for Bell company entry into new businesses. And they also are intended to discourage the Bells from abusing their market dominance to keep out potential rivals.