ALTS Warns Ohio Regulators That S.B. 235 Will Discourage the Growth of Competition in Ohio.

Business Editors

COLUMBUS, Ohio--(BUSINESS WIRE)--Feb. 9, 2000

Key Driver of Advanced Services is not Promise of &uot;Relief,&uot; but the

Threat of Competition from CLECs Driving Today's DSL Explosion

In testimony before the Ohio Senate Ways and Means Committee yesterday, the Association for Local Telecommunications Services (ALTS) expressed strong opposition to S.B. 235, proposed legislation that would deregulate incumbent local telephone companies.

In testimony delivered in person to the Committee, ALTS President John D. Windhausen, Jr. called S.B 235 a &uot;sledgehammer that will fundamentally alter the telecommunications landscape in Ohio.&uot; He said the competitive local telecom industry opposes the bill because it:

-- Grants premature regulatory relief to incumbents in exchange for

&uot;commitments&uot; to deploy an advanced services network;

-- Removes advanced services from oversight of the Public Utilities

Commission of Ohio (PUCO);

-- Falsely contends that competition by a single carrier will keep

incumbents' behavior in check;

-- Effectively eliminates PUCO from any meaningful review of key

regulatory reforms that would be implemented under the bill -

giving incumbents the right to adopt &uot;optional regulation&uot; that

lets them change prices and service packages at will.

&uot;A lot has changed in the local telecommunications market, but one thing has stayed the same - the telephone companies' tired arguments that there is so much competition that they should be deregulated,&uot; said Windhausen. &uot;These arguments did not work in 1984 and do not work today.&uot;

&uot;S.B. 235 would allow the incumbents to raise rates for residential customers and lower rates below costs where they face competition. This is a double whammy on the Ohio marketplace. Ohio legislators should stay the course by enforcing the current pro-competitive policies, and broadband services will continue to be deployed.&uot;

As evidence, ALTS cited FCC documentation showing that the incumbents now are responding to CLEC advanced services deployment with significant large-scale DSL rollouts of their own, and said it would be &uot;poor public policy&uot; to reward incumbents with regulatory freedom for something they are already doing.

ALTS further criticized S.B. 235's proposal to remove the incumbents' advanced services from the authority of PUCO and effectively bar Ohio regulators from oversight of any key regulatory reforms.

&uot;In order to deploy DSL, CLECs require essential, non-competitive services and facilities from the incumbents, such as unbundled copper loops,&uot; said Kim Kirby, ALTS Vice President - State Regulatory Affairs. &uot;In our view, PUCO must retain oversight authority to ensure that the incumbents do not give preferential treatment to their own retail advanced service units for these facilities.&uot;

In the same vein, S.B. 235 would grant the incumbents unprecedented power to invoke &uot;Optional Regulation,&uot; giving them the ability to changes prices, package services and charge different rates for the same services within different portions of their local exchange areas. Further, after two years, if competition exists as defined by S.B. 235, most if not all services would be deregulated.

&uot;The incumbents would be entitled to these new freedoms without any review by the PUCO to determine if this flexibility is warranted, and with no assessment of the impact on the public interest or competition,&uot; said ALTS' Windhausen. &uot;This would be devastating to consumers and to the CLECs.&uot;

ALT is the leading national industry association whose mission is to promote facilities-based local telecommunications competition. Created in 1987, ALTS has offices in Washington, D.C. and Irvine, California and now represents almost 200 companies that build, own, and operate competitive local networks.

For more information on ALTS, contact Crawford Public Relations at 703/318-5461 or visit the ALTS Web site at www.alts.org.