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Ma Bell's Legacy: Time for a Second Divestiture?

Fortnightly Magazine - June 15 1998

W. Huber, Michael K. Kellog, and John Thorne, "Joint Explanatory of the Committee of Conference" in the Telecommunications Act of 1996 - Special Report, 1996 (p. 277).

2 Seth Schiesel, "Court Sets Back F.C.C. Efforts to Open Local Phone Markets," New York Times, July 19, 1997.

3 "Supreme Court to Hear Petitions on FCC's Interconnection Order," Telecommunications Reports, TR Daily, Jan. 26, 1998.

4 "Rochester Tel Debuts 'Frontier' Corporate Identity," Telecommunications Reports, Oct. 24, 1994.

5 "Connecticut DPUC OKs SNET Restructure Plan," Telecommunications Reports, TR Daily, June 25, 1997.

6 In the Matter of: Petition for Expedited Declaratory Ruling, Petition of LCI International Telecom for Expedited Declaratory Rulings. Filed at the FCC Jan. 22, 1998, p. 3.

7 LCI petition, p. 29.

8 LCI petition, p. 28.

9 LCI petition, p. 28.

10 SBC Communications Inc. (formerly known as Southwest Bell) filed a motion for summary judgement with a federal district court July 1997 seeking relief from the Act on the grounds it discriminates against RBOCs. A favorable ruling in this case would gut the quid pro quo by immediately allowing RBOC interLATA authority. At the time of this writing, the outcome of this request is unknown. (See, "SBC's Challenge to Telecom Act Could Hinge on Ruling that Separate Treatment of Bells is Punitive," Telecommunications Reports, July 7, 1997).

11 The LCI petition, p. 32.

12 While states often retain jurisdiction over new services, they are likely to treat these services as "discretionary" and to allow for large margins. For example, the cost of providing call waiting or caller ID is typically a few cents per month. These services are often priced (with regulatory blessing) with mark-ups of several thousand percent.

13 This possibility is further complicated by the Act's enabling of the RBOCs to re-enter the equipment manufacturing business. The Act does require that the RBOCs establish a separate subsidiary for equipment manufacturing, however, the potential NetCo and the potential "EquipCo" would remain wholly owned subsidiaries of the RBOC. 47 C.F.R. §273(d)(3).

14 LCI petition, p. 21.

15 Initial RBOC response to LCI's "fast track" proposal has been negative. See, "BOCs Say LCI's 'Fast Track' Plan Conflicts with Act," Telecommunications Reports, TR Daily, March 24, 1998.

16 See, Gerald R. Faulhaber, Telecommunications in Turmoil: Technology and Public Policy, 1987.


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