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Telecommunications industry

Bell Atlantic Gains Conditional Support for Long-Distance Service Expansion

Strategic Insights

— 1 min read

Telecommunications companies have been working to simplify customer services by offering a one-stop shopping experience, but regulatory barriers have limited this option to large corporations. Yesterday's announcements by the Justice Department's antitrust chief and New York State's top utility regulator gave conditional support to Bell Atlantic's bid to sell long-distance telephone service, moving the company closer to its goal of offering integrated local and long-distance services.

Key Takeaways:

  • Bell Atlantic, the dominant local telephone company in New York, has conditional support from the Justice Department and New York State's top utility regulator to sell long-distance telephone service.
  • The company has agreed to open its local network to competitors as part of its plan to offer national and international long-distance calling throughout the state.
  • The Justice Department's antitrust division will review the company's plan to ensure that the local telephone market is fully and irreversibly open to competition before making any recommendation on Bell Atlantic's long-distance hopes.
  • Bell Atlantic has control of over 90% of New York's 12.3 million local phone lines, according to the F.C.C.
  • The company will take until August to fulfill the plan, with the intention of filing its long-distance application with the FCC in the fall.
  • The FCC would then have three months to issue a ruling on the application.

Statistics:

  • 12.3 million: the number of local phone lines in New York, over which Bell Atlantic has control of more than 90%.
  • 80 billion: the size of the long-distance market, which the Bells are seeking to enter.
  • 1996: the year in which the Telecommunications Act was passed, allowing the Bells to get into the long-distance market after convincing the FCC that they had opened their local networks to potential competitors.
  • December 31, 1983: the date on which the independent Bell companies were forced out of the long-distance market as part of the court-supervised antitrust settlement.

Sources:

  • The New York Times, "Bell Atlantic Gains Conditional Support for Long-Distance Service Expansion"
  • Federal Communications Commission (FCC), data on the number of local phone lines in New York
  • Telecommunications Act of 1996, text of the law
  • Bell Atlantic, press release announcing the company's plan to open its local network to competitors
  • Justice Department, press release announcing the department's support for the Bell Atlantic's long-distance application

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