Dial tone update: what's the status of competition for local telephone service? (Communications).When Congress passed the Telecommunications Act There are several laws named the Telecommunications Act
Six years down the road, Mike Leppert, executive director of the Indiana Utility Regulatory Commission says, "The Telecommunications Act has allowed companies like Time Warner Midwest Telecom, Choice One and other upstart companies to get into the market and provide competitive choices. The commission's goal is to see these companies flourish."
The local phone companies that wired your home and office prior to the Telecommunications Act--called incumbent local exchange carriers ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the break up of AT&T into the Regional Bell Operating Companies (RBOCs) also known as the "Baby Bells". (ILECs), Indiana's biggest being SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Ameritech, Verizon and Sprint--want to keep their customers, and the post-Telecommunications Act competitive local exchange carriers (CLECs) are vying for a share of your business.
And business is the operative word here. CLECs have concentrated on the more lucrative and viable business market, where they now provide 17 percent of service, as opposed to 2 percent of the residential pie. Overall, because residential lines vastly outnumber out·num·ber
tr.v. out·num·bered, out·num·ber·ing, out·num·bers
To exceed the number of; be more numerous than.
to exceed in number: business lines, only 8 percent of Indiana customers bought their service from CLECs at year-end 2000, the latest numbers available from the IURC IURC Indiana Utility Regulatory Commission .
John Koppin, president of the Indiana Telecommunications Association, a 40-member industry trade group, says if the current rate of increase continues, 10 to 12 percent of local service could be provided by CLECs when the calendar year 2001 numbers are in. "Is that what it's supposed to be, ought to be? I don't know Don't know (DK, DKed)
"Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. ," he says. "The problem is, the economic downturn has impacted our industry, as you can imagine. Many of the competitors, like McLeodUSA, ended up going Chapter 11. The financial health of the industry was exposed."
IURC reports show that 46 CLECs are providing local service in the state (although more than four times as many are licensed to do so), primarily in the larger cities. Some CLECs merely pay to access ILECs' phone lines and resell the service to customers, usually as part of package of telecom services. Others, known as "facilities-based" CLECs, have invested millions of dollars in their own lines, many running to multiple-tenant office buildings.
AT&T, the largest nationwide provider of long distance, entered the Indianapolis local phone service market in a big way in 1998 after laying 400 miles of fiber-optic cable. It now serves 200 office buildings with a complete menu of services including Internet and data.
Congress took a carrot-and-stick approach with the Baby Bells The nickname given to the regional Bell operating companies after Divestiture in 1984. See Bell System and RBOC. , says Rob Ramsey, district manager of AT&T, allowing them into the long-distance market only after proving they'd opened up their local market to competitors. "If they're allowed in prematurely, we'll never see local phone competition take root."
Ramsey says AT&T's long-distance rates dropped 50 percent since competition was unleashed in that market in the mid-'80s, but since the passage of the Telecommunications Act, local rates have increased an average of 17 percent. "SBC Ameritech still enjoys monopoly status. Ameritech would rather pay fines than cooperate with CLECs."
Mike Marker, spokesperson for SBC Ameritech Indiana, says the company is "very, very close" to filing an application for long-distance approval with the IURC and "we expect to be operating long distance early in 2003."
It's this imminent entry into the market, he says, that prompted AT&T to call for splitting Ameritech into two companies, one servicing the wholesale side--resellers of Ameritech's lines--and one servicing the end users. That would result in a 44 percent increase in customers' rates, says Marker, because of the duplication of staffing and services that would have to occur. An IURC hearing on the matter is scheduled early this month.
In an editorial, the Muncie Star-Press opposed the move, calling AT&T's efforts to split Ameritech a "smokescreen" to stifle competition of its own in the long-distance market.
Verizon, the state's No. 2 ILEC (Incumbent Local Exchange Carrier) A traditional local telephone company such as one of the Regional Bell companies (RBOCs). Contrast with CLEC. See ELEC and TELRIC. , wasn't named in AT&T's petition but is watching the proceedings, says Dick Shoemaker, director of public policy and external affairs. It was able to offer long distance shortly after the Telecommunications Act was passed because its former GTE GTE General Telephone & Electronics
GTE Génie Thermique et Énergie (French)
GTE Gas Turbine Engine
GTE Global Tropospheric Experiment
GTE Geothermal Energy
GTE Gas Turbine Efficiency plc (Sweden & USA) operation in Indiana was not part of the Bell system. Nevertheless, he predicts a similar rate increase would occur--in the 40 to 50 percent range--if his company were forced to separate into wholesale and retail units. Verizon's largest Indiana city is Fort Wayne Fort Wayne, city (1990 pop. 173,072), seat of Allen co., NE Ind., where the St. Joseph and St. Marys rivers join to form the Maumee River; inc. 1840. It is the second largest city in the state, a major railroad and shipping point, a wholesale and distribution hub, , with other major service areas in Elkhart, Lafayette, West Lafayette West Lafayette, city (1990 pop. 25,907), Tippecanoe co., W Ind., a suburb of Lafayette, on the Wabash River; inc. 1924. A primarily residential city, it is the seat of Purdue Univ. , Richmond and Terre Haute Terre Haute (tĕr`ə hōt, tĕr`ē hŭt), city (1990 pop. 51,483), seat of Vigo co., W Ind., on the Wabash River; inc. 1816. .