TRA FINDS BELLSOUTH GUILTY OF LIMITING LOCAL COMPETITION.

The Tennessee Regulatory Authority (TRA) had issued a ruling, finding BellSouth guilty of practices that limit local phone service competition -- a direct violation of a pledge it must fulfill to gain access to the much-coveted long distance market. The questionable program involved in the case, known as BellSouth Select, is currently active in all other Southeastern states where BellSouth conducts business.

Under the Select program, a handful of BellSouth business customers received secret cash rebates to prevent them from switching to competitive local carriers or to "winback" customers who already had left BellSouth. The TRA found the practice illegal and fined BellSouth $169,200, apparently the largest fine ever imposed upon BellSouth in Tennessee.

"It's ironic that BellSouth engages in these promotional and pricing schemes and employs near-monopolistic dominance to drive out local service competition as it attempts to enter the long distance market by touting the benefits of long distance competition," says Rodney Page, senior vice president of marketing and strategic development for Access Integrated Networks, Inc. (AIN). AIN was party to filing the complaint against BellSouth in the TRA case.

Tennessee also ordered BellSouth to cease the Select program. According to BellSouth the company discontinued the program in Tennessee; however, the promotional effort apparently continues operating in other BellSouth states (Alabama, Florida, Georgia, Kentucky, Louisiana, North Carolina, Mississippi and South Carolina). Approximately 100,000 Southeastern business customers participate in the program.

The TRA found that BellSouth failed to obtain state approval of the rebate program, which provided financial benefits or discounts to participants. The TRA also found that BellSouth failed to offer the program for resale in violation of state law and the federal Telecommunications Act.

"It appears that BellSouth primarily offered this program to customers it lost to other local phone service providers," says Page. "The company claims to be opening the market to competition, but when competitors acquire modest market share, it tries to shut them out."

According to federal regulations, companies such as BellSouth must demonstrate fair competition for local service before the Federal Communications Commission and state public service commissions will grant permission to enter the long distance market. "Providers such as BellSouth maintain dominant market share because they own the local service networks created through more than a century as a government-protected monopoly," explains Page. "To compete, companies such as ours must have access to this network. It's exactly the same opportunity BellSouth desires on a national level with the long distance network."

"We acknowledge BellSouth's efforts to expand into the long distance market," says Page, "but they must first fulfill their obligation to compete fairly on a local level."

The order, issued under Docket Number 01-00868, is available online at http://www.state.tn.us/tra/orders/2001/010086850.pdf (NOTE: The order may take several days to post).

About Access Integrated Networks, Inc.

Access Integrated Networks, Inc. is a rapidly growing Competitive Local Exchange Carrier (CLEC) providing telephone services to small business customers in nine Southeastern states. Established during 1996, the privately held company is headquartered in Macon, Ga. In addition to local telephone service, AIN offers long distance and toll-free service, as well as travel calling cards and consolidated local and long distance billing.

For more information, call 770/565-5440.