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MCI CAUTIONS AGAINST LEGISLATION TO DEREGULATE PENNSYLVANIA BELL AND OTHER LOCAL TELEPHONE COMPANIES; PUSHES FOR CONSUMER SAFEGUARD MEASURES

MCI CAUTIONS AGAINST LEGISLATION TO DEREGULATE PENNSYLVANIA BELL AND OTHER LOCAL TELEPHONE COMPANIES; PUSHES FOR CONSUMER SAFEGUARD MEASURES
 HARRISBURG, Pa., April 8 /PRNewswire/ -- MCI Communications Corporation (NASDAQ: MCIC) today urged members of the House Consumer Affairs Committee to adopt new telecommunications legislation only if it contains adequate safeguards to protect captive consumers from the monopoly and near-monopoly powers of Pennsylvania Bell and the other local phone companies in the state.
 The Pennsylvania House Consumer Affairs Committee is holding hearings on two new bills dealing with regulation of telecommunications services in the state, House Bill 2437 introduced by Rep. Michael Veon and House Bill 2441 introduced by Rep. David Wright, who is also the chairman of the Consumer Affairs Committee.
 MCI testified in opposition to House Bill 2437 which links a reduction or elimination of Public Utility Commission (PUC) rate regulation of the local phone companies in exchange for the companies' investments in network modernization. "The danger with House Bill 2437," said Donna Sorgi, MCI's director of regulatory and governmental affairs, "is that it mandates the deployment of a costly technology without any regard for how much the investment will cost, whether there is demand for the services and which customers will pay for it."
 Sorgi said MCI supports sound network modernization by the local carriers in the state provided the investments are cost-justified and are not linked to deregulation of monopoly services.
 A recent study conducted by Economics and Technology, Inc., on behalf of the Office of Consumer Advocate, estimates that the added revenue required to support Bell of Pennsylvania's proposal to accelerate its fiber optic network deployment and conversion of all access lines to optical fibers by 2010 would be $12 to $15 billion.
 Sorgi said a better bill is House Bill 2441 introduced by Committee Chairman Wright. "Wright's bill would allow for the reduced regulation of local telephone services where appropriate and with the protection necessary to guard against unlawful subsidization of competitive services by captive ratepayers and anticompetitive practices."
 Wright's bill also does not link local phone companies' infrastructure investments with reduced regulation of services. Sorgi pointed out that "there is no reason why monopoly services must be subjected to reduced regulation in order for the local telephone company to invest in infrastructure improvements.
 "MCI endorses the requirement that only the PUC may decide when a service is competitive and therefore deregulated," added Sorgi.
 MCI also testified against provisions in both House bills which would call for complete deregulation of AT&T's intrastate services -- House Bill 2437 would do so immediately, while House Bill 2441 would do so effective Jan. 1, 1994. "Because AT&T still controls twice the market share of all its competitors combined and has significant market dominance in 800 service and calling card markets, it should not yet be fully deregulated," said Sorgi.
 As the second largest customer of Bell of Pennsylvania and the other local telephone companies, MCI pays almost 50 cents of every long distance revenue dollar for local access. MCI provides residential, business and government customers with a full range of global telecommunications services. MCI has sales and service offices throughout the state, and last year opened a state-of-the-art network center in Pottstown.
 -0- 4/8/92
 /CONTACT: Frank J. Walter of MCI Eastern Division, 914-933-6292/
 (MCIC) CO: MCI Communications Corp.; Pennsylvania Bell ST: Pennsylvania IN: TLS SU: LEG


GK-SM -- NY032 -- 6163 04/08/92 10:45 EDT
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Publication:PR Newswire
Date:Apr 8, 1992
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