AT& Asks PUC to Arbitrate Negotiations With SBC/Pacific Bell.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 31, 2000

Citing a host of unresolved issues, AT& has asked the California Public Utilities Commission to arbitrate renewal of its local telephone service interconnection agreement with SBC/Pacific Bell. This agreement is required for competitive carriers such as AT& to provide local exchange service in competition with Pacific Bell. Interconnection agreements enable AT& and other companies that offer local telephone service to use the facilities of the monopoly carriers - SBC/Pacific Bell or GTE - to reach customers.

&uot;We are very disappointed that negotiations have reached an impasse on so many issues,&uot; said David Condit, AT& Law and Government Affairs Vice President. &uot;It's clear that SBC/Pacific Bell only wants to provide the absolute minimum provisions of interconnection required by law, instead of treating AT& as a valued customer, as would be the case in a truly competitive environment. This is a prime example of the very practice the Commission criticized in its order denying Pacific Bell's 1998 draft application to provide long distance service.&uot;

In that order, the Commission expressed its concern that SBC/Pacific Bell does not deal with the competitive local carriers as customers of a wholesaler but instead treats them as competitors in the midst of litigation.

AT& negotiated its first interconnection agreement with Pacific Bell in 1996, following passage of the Telecommunications Act of 1996, and prior to the SBC/Pacific Bell merger. That, too, resulted in CPUC arbitration. The current contract expires this month, but will continue until a new agreement is reached.

In current negotiations, SBC/Pacific Bell has tried to withdraw several key business arrangements resolved in the initial contract, said Mr. Condit, who also noted that AT& does not believe SBC/Pacific Bell is making a good faith effort to resolve differences. On many key business issues, SBC/Pacific Bell is taking the position that the business relationship should be governed by its tariffs or internally generated handbooks rather than the type of inclusive arms-length negotiated contract that guides most businesses in the competitive world.

&uot;We had to resort to arbitration in the first round of contracts, even though SBC wasn't a player,&uot; said Mr. Condit. &uot;Now that SBC has entered the picture and is controlling the process from San Antonio, it's apparent they have no intentions of rolling up their sleeves and sitting down to fair negotiations.

&uot;It is clear to AT& that the CPUC and the courts will have to continue rigid enforcement of the Telecommunications Act,&uot; said Mr. Condit. &uot;SBC/Pacific Bell is only interested in maintaining a local service monopoly. This is terribly unfortunate for Californians, who richly deserve the competitive pricing, improved services and new technology that a competitive local service marketplace will bring.&uot;