Ameritech’s long trek to the long-distance business hit another dead end Tuesday, but the Chicago-based phone giant hopes it now has a road map to find its goal.
As was expected, the Federal Communications Commission rejected Ameritech’s application to offer long-distance service to Michigan customers.
Under the new federal telecommunications law, local phone companies can offer their customers long-distance only after they open their monopolies to competition. Ameritech hasn’t yet met the requirements of the law, the FCC said in a 200-page ruling intended to spell out in detail the shortcomings Ameritech must correct.
Predictably, Ameritech’s competitors said they were pleased with the ruling, and, perhaps less predictably, Ameritech said it was pleased.
Despite the setback, Ameritech chooses to view the ruling in a positive light, one that will spell out how the process of opening local phone monopolies can move forward.
“This is a victory for Ameritech, for the entire industry and especially for our customers,” said Richard C. Notebaert, Ameritech chief executive.
“Our first choice would have been a `yes.’ We’re disappointed that we didn’t get a yes. However, we can say this is a victory. . . . A negative result would have been a one-page `no, try again’ without explanation or hope.”
Notebaert said that his reaction is based upon the FCC’s press summary of its ruling and comments by the commissioners. He will get the actual order to study later.
He noted that Ameritech has interconnection agreements with 56 competing companies ranging from giants like AT&T Corp. and MCI Communications Corp. to numerous small firms. More than 250,000 Ameritech customers have embraced new carriers, he said, proving that the Midwest is the nation’s most competitive telecommunications region.
Most of Ameritech’s shortcomings cited by the FCC concern relatively minor, but still important, elements of phone service.
At present most competition for Ameritech is from companies that buy Ameritech phone service at wholesale prices and then resell it to customers under their own brand name. AT&T and MCI are in this category. Both those long-distance companies say they will in the future build their own facilities to compete with Ameritech.
The FCC found that Ameritech has failed to provide customers of its competitors with the same level of service enjoyed by its own customers.
Competitors in Michigan and Illinois have complained that sometimes new customers don’t get their accounts switched by Ameritech, are billed both by Ameritech and their new company or have other annoying experiences because of billing and accounting snafus.
These difficulties stem from the complexities of handling orders and coordinating accounting systems among different phone companies rather than from a lack of cooperation by Ameritech, said William Ketchum, president of AT&T’s central states region.
“Nowhere today is there parity in treatment of phone customers so that customers of competitors get the same quality treatment as Ameritech’s customers,” Ketchum said. “In every case we’re working closely together to isolate the issues and chip away at the problem.
“But this isn’t just a little software issue where you can find it, fix it and the problem is solved.”
Notebaert said that Ameritech has opened a new facility in Michigan and hired more people to improve its ability to process changeover orders to other phone companies.
Another major issue between Ameritech and its competitors concerns splitting off elements of Ameritech’s network and selling them at discounts so that competitors can reassemble those elements to their own liking. This procedure, called “unbundling” is required by the new law, but just what network elements should be unbundled and how remains in dispute.
Notebaert said he thinks the issue ultimately will be decided in court.
Joan Campion, MCI’s regional policy director, said that the FCC’s position on unbundling and other issues does uphold the new law’s intention, and that it remains to be seen if Ameritech will be able to bring itself into compliance. “We’ve heard before from Ameritech that they are in compliance or soon will be, but this is another message that they are not.”
Notebaert said that his firm will decide when to refile its application after reading the FCC order.
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