SBC FILES SEC. 271 APPLICATIONS FOR 4 MORE MIDWEST STATES
SBC filed an application with the FCC Thurs. to offer long distance service in its remaining 4 Midwest states -- Ill., Ind., Ohio and Wis. -- delivering more than 175 boxes of regulatory material to the Commission. SBC said it had received “strong endorsements” from PUCs in 3 of the states and “a preliminary indication” from the Ind. Utility Regulation Commission that it would support SBC’s long distance entry. “This multistate filing is the climax of 7 years of effort to bring competition, lower prices and more choice to consumers and businesses in our Midwest region,” SBC Pres. William Daley said. The 4 states, plus Mich., comprise the old Ameritech territory before the SBC-Ameritech merger.
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The FCC called for comments on the 4-state filing by Aug. 6, with a DoJ evaluation due Aug. 26. The deadline for Commission action will be Oct. 15 under the statutory 90-day review requirement for Sec. 271 applications, the agency said.
Analysts at Legg Mason predicted the filing’s fate would be tied to that of SBC’s pending Mich. application. “If SBC is approved in Michigan, then we believe the 4-state application will have a very good chance of success,” Legg Mason said in a report issued Thurs. “If for some reason the [Mich.] bid is rejected, we believe the multistate filing would also be vulnerable.”
The Mich. application, SBC’s first Sec. 271 filing for a state in its Midwest region, hasn’t had an easy ride. The carrier withdrew an earlier application in April after the Dept. of Justice and the FCC indicated concerns about it. It refiled the Mich. application June 19 and Wed. DoJ, while finding improvement in SBC’s operations, said it still couldn’t support the application because of concerns about the wholesale billing process SBC used for local competitors (CD July 17 p11). The Telecom Act requires a Bell company to show its local operations are open to competition before it can gain approval to offer long distance service. The Mich. application is due for FCC action by Sept. 17.
Legg Mason analysts said they were “struck by the continuing intensity of DoJ’s resistance” to the SBC Mich. application and questioned why the company hadn’t been able to more fully address Justice’s concerns. Legg Mason said in the report that this 2nd attempt might be “much closer to a toss-up than a slam dunk, with SBC needing to submit more and better evidence that it has resolved the problems.” Nonetheless, “at the end of the day, we suspect SBC will be able to convince the FCC that it has complied with the requirements and merits approval,” Legg Mason said.
An AT&T spokeswoman said SBC had “gall” to file a 4- state application with “the same critical defects” the day after the DoJ had raised concerns about the Mich. application. SBC should fix those “defects… including its flawed billing system” before filing more applications, she said.