A Year After Telecom Law's Signing, Local Markets Open To Competition

Southwestern Bell Gearing Up To Offer Long-Distance In Its Five-State Territory

Houston, Texas, February 5, 1997

On February 8 a year ago, President Clinton signed into law the Telecommunications Act of 1996. Congress’ intent in passing the legislation was to open the telecommunications industry -- local and long-distance -- to competition, thus giving customers more choices.

In the year since the signing of the Act, local markets have substantially opened to new competitors, as the law envisioned. Through January, Southwestern Bell Telephone Company had negotiated and signed 67 agreements with 35 competitors seeking to enter the local service market. In addition, the company is negotiating with more than 70 other competitive providers. In Texas, Southwestern Bell has signed 29 agreements with competitive service providers and is still negotiating with 48 others.

"We have been negotiating and reaching agreements at a brisk pace with companies that want to enter the local service market," David A. Cole, president of Southwestern Bell-Texas said. "We are continuing with our plans to apply in each state for entry into the long-distance business."

Under the terms of the Telecommunications Act, local telephone companies must show they have opened their local markets to competition before they are allowed to enter the long-distance business. As an important step in that process, Southwestern Bell on January 15 filed documents with the Oklahoma Corporation Commission stating that it has established terms and conditions for opening its local market to competition.

Southwestern Bell currently has limited long-distance capability. In addition to offering some landline long-distance for calls originating and terminating within its traditional region, the company has nearly 2 million wireless long-distance customers through its offering both in and out of its traditional region. Also, in December, the company began marketing landline long-distance service to its Cellular One customers in Boston, Chicago, upstate New York, central Illinois and Washington, D.C./Baltimore. When Southwestern Bell Communications Services, Inc. begins offering landline long-distance service to customers in the company’s traditional five-state territory, said Cole, long-distance rates will fall.

"Thirteen years after the breakup of AT&T, three companies still dominate the long-distance business and they’ve increased their rates more than 20 percent in the past three years," Cole said. "Southwestern Bell has the resources to compete with AT&T, MCI and Sprint and break the cartel and the cycle of steadily escalating long-distance rates."

Southwestern Bell is a subsidiary of SBC Communications Inc., one of the world’s leading diversified telecommunications companies and one of the nation’s leading wireless providers. Through its subsidiaries, SBC provides innovative telecommunications products and services under the Southwestern Bell and Cellular One brands. Its businesses include wireline and wireless services and equipment in the United States and interests in wireless businesses in Europe, Latin America, South Africa and Asia; cable television in both domestic and international markets; and directory advertising and publishing.