The way to hasten competition in the local telephone market is to break companies like Ameritech Corp. into two pieces, a competitor suggested Thursday in a petition to the Federal Communications Commission.
If Ameritech and other regional Bell companies are split into separate companies–one providing wholesale service and the other retail local service–residents could enjoy the fruits of full competition within a year, said Anne Bingaman, president of the local phone service division of LCI International Inc., the nation’s sixth-largest long-distance carrier.
LCI, headquartered near Washington, D.C., will file a similar petition with the Illinois Commerce Commission on Friday, said Bingaman, former assistant attorney general for antitrust in the Clinton administration.
If Ameritech split off its operations that provide wholesale network services to all phone companies it serves, it would lose the conflicts of interest that now hamper complete deregulation of local phone service, Bingaman said.
Ameritech could gain an edge, too. By splitting itself in two, Ameritech’s retail arm could begin offering long distance as well as local service much more quickly, Bingaman said.
“This is a serious proposal to break the logjam,” she said.
LCI is targeting its proposal at Illinois and New York because the two states have utility commissions that have worked hard to promote local phone competition, she said.
Ameritech’s immediate reaction was negative.
“We favor anything that lets us serve customers with a full range of products, including long distance, as quickly as possible,” said Dave Pacholczyk, an Ameritech spokesman. “But LCI’s proposal doesn’t do that. It just sets up yet another process. We already have a process in place, and we’re trying to play by its rules. Now LCI wants to change the rules. We don’t want to change the rules.”
Bingaman said that LCI’s chief executive, Brian Thompson, will contact Ameritech’s chief executive, Richard Notebaert, to try to convince him that splitting Ameritech apart would be good for its shareholders as well as the industry.
Ameritech already has a wholesale division that serves competitors that use Ameritech’s network, but outside competitors don’t get the same prompt and trouble-free service as its retail division, Bingaman said.
