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How Judge Greene's recent decision changes business telecomm.

On July 25, Judge Harold H. Greene, of the District Court for the District of Columbia, said he was lifting the AT&T antitrust consent decree's restrictions on the provision of information services by the RBOCs (Regional Bell Operating Companies).

The table shows the chronology of events leading up to Judge Greene's opinion.

On August 9, Greene denied a motion filed by the Bell companies to vacate the "stay" order he imposed on his decision. This is certain to be challenged, perhaps as far as the Supreme Court.

Information services

Under the terms of Modified Final Judgment (MFJ), the Bell companies are allowed to provide basic telephone services only. As new technology enters the network, it must be viewed in light of this restriction. For instance, Signaling System 7 (SS7) can only be used to speed telephone call placement and provide certain enhanced voice services.

This clouds the future of many ISDN services such as automatic number identification and database integration. It also puts a question mark over SMDS (Switched Multimegabit Data Service) and Broadband ISDN. Since these cannot be used to bring new business services to corporate users, their potential benefit is reduced.

Changes for service providers

Judge Greene's decision will eventually change the rules, but it is unlikely users will benefit right away. Alan Pearce, of Information Age Economics and former Chief Economist to the FCC, makes these points:

* The RBOCs would prefer court action to Congressional action which might lead to regulation by state PUCs;

* The RBOCs will experiment with new kinds of services and will offer them when a decision is reached in their favor;

* The competitive service providers, including CATV operators, newspapers, broadcasters, and database owners/operators, will benefit because the FCC will imposed rules, putting the RBOCs at a competitive disadvantage;

* The RBOCs will try to acquire some existing information service providers and engage in joint ventures, partnerships, and other strategic alliances to improve their competitive position.

User access

Dangling the prospect of letting the RBOCs into information services should encourage them to invest more heavily in the local telephone infrastructure.

At present it is difficult for corporate users to gain access to the public broadband network. The technology to make such connections directly using SMDS standards is being developed today. Judge Greene's decision is bound to accelerate the installation of such access technology.

In his opinion, Greene wrote that 99% of the traffic to the ultimate subscriber must pass through the regional companies' local loops. This gives the telephone companies "market power as a consequence of bottleneck control."

But many of these loops consist of narrow band twisted pair copper wire, so a case can be made that this is as much a bottle-neck to anything useful as it is to other service providers.

Traditionally, the local loop has been the most intractable part of the network to upgrade.

One result of Greene's opinion may be to encourage the RBOCs to install fiber faster in the local loop.

SMDS and B-ISDN need fiber to the office to maximize their potential benefits and the RBOCs are well aware of this.

Once their competitors are able to collocate equipment at the local exchange premises, narrow band business lines will rapidly become obsolete, opening up opportunities for alternative access providers.

Although the immediate impact on business users of Judge Greene's decision may be slight, in the long term it can do nothing but good.

Corporate America is not reaping the benefits of SS7, ISDN, SMDS, and B-ISDN quickly enough. In the meantime it has to rely on expensive private networks, resellers, and leased access facilities.

Editorial Note:

The Federal Court of Appeals for the District of Columbia lifted the stay order imposed by Judge Greene on the provision of information services by the Regional (Bell) Holding Companies (RHCs).

This action apparently clears the way for the Bell telephone companies to begin providing information services, although Congressman Jim Cooper (D-Tenn.) has introduced a bill to regulate their participation. Cooper is a member of the Budget, Energy and Commerce, and Small Business Committees. Judge Greene's original order releasing the Bell companies from the ban on providing information services is also being appealed.

Before any Bell companies provide any information service which was previously restricted by the ban, they have to file for a tariff with the FCC. This process takes several months.
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Title Annotation:Judge Harold H. Greene lifts the AT&T anti-trust consent decree restrictions
Author:Stewart, Alan
Publication:Communications News
Date:Nov 1, 1991
Previous Article:What works for supermarkets may work for ISDN.
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