RECENT HEADLINES

DOJ Approves AT&T-BellSouth Merger
The Justice Department today approved AT&T Inc.'s acquisition of BellSouth without conditions. The FCC is scheduled to vote on the deal Thursday. Associated Press (10/11)

Justice Department Approves Telecom Mergers
The Justice Department yesterday approved the mergers between Verizon Communications and MCI, and SBC Communications and AT&T. The approvals impose few conditions on the deals, although the telcos will be required to divest some high-volume business lines. The FCC is slated to discuss the mergers today. The Washington Post

New England CLECs Unite
CTC Communications of Waltham, Mass., and Lightship Telecom of Bedford, N.H., this week announced they are merging. The merged companies will operate as CTC Communications. Network World

Kevin Martin Picked for FCC Chief
President George W. Bush has nominated telecom lawyer Kevin J. Martin to serve as chairman of the FCC. Martin, one of three Republican members of the FCC, would take the helm from Michael K. Powell as the commission addresses a slew of controversial issues in telecommunications. Phone companies and representatives for the telecom industry praised the appointment. - Telecom Daily Lead

FCC Releases UNE Rules Order
The FCC late Fri. took the next step toward limiting CLEC access to Bell network elements by releasing the final UNE rules it approved in Dec. The order, which will become final as soon as it’s published in the Federal Register, phases out CLEC use of TELRIC-priced UNE platforms and also reduces slightly the number of situations when the Bells must share high-capacity loops and transport. The new rules are expected to require competitors to change the way they deliver telephone service for both mass media and business customers, for example negotiating commercial agreements to replace Bell-provided UNEs. - Communications Daily

Incumbents Again Press Legislatures for Telecom Deregulation
Telecom deregulation legislation has emerged in several states as incumbents once more turn to lawmakers for regulatory relief they say will allow them the freedom to respond quickly to competition. There has been recent deregulation activity in Ala., Ind. and Ida. In other action, leading Va. lawmakers are calling for passage of telecom tax reform measures. Comunications Daily

Qwest, MCI Press Ahead With Merger Talks
Qwest, MCI press ahead with merger talks Qwest Communications CEO Richard C. Notebaert and MCI CEO Michael Capellas yesterday continued discussions about a possible merger between the two companies, The Wall Street Journal reports. Verizon Communications also has been mentioned as a possible MCI suitor.

Regulators May Require Spinoffs Before AT&T-SBC Merger
SBC’s merger with AT&T undoubtedly will require some divestitures, analysts and others predicted Mon. as the companies announced the $16 billion transaction. SBC Chmn. Edward Whitacre told the news media he didn’t expect regulators to order spinoffs but others say such action may be inevitable, with reviews expected by state regulators, the FCC, the Dept. of Justice and possibly international regulatory bodies. The merger will eventually gain antitrust and regulatory clearance “but could be subject to significant divestitures, particularly in SBC’s region,” Legg Mason predicted in a report Mon. Regulatory attorney Andrew Lipman said there’s a “high probability” of regulators requiring “spinoffs and surgery.”

SBC To Acquire AT&T
SBC Communications and AT&T Corp. announced on January 31, 2005 that SBC has agreed to acquire AT&T. The acquisition, valued at approximately $16 billion, still requires approval by AT&T shareholders and regulatory authorities. The press release projects that the acquisition is expected to complete during the first half of 2006.

Supreme Court Upholds Decision on Leasing of Phone Lines
The Supreme Court upheld a decision that threw out federal regulations requiring big local telephone companies to lease access to their networks at cut-rate prices. The justices declined to hear an appeal buy AT&T, MCI and smaller telephone companies that have said discount network access is critical if they are to compete against the big carriers. TeleTech

Increase in Wholesale Rates SBC Charges Competitors Likely
The Wisconsin Public Service Commission (PSC) is working to set new wholesale rates that comply with federal cost standards and allow competition to continue to grow in the state. In a verbal decision, the Commission approved adjustments that will most likely result in an estimated 13% to 20 % increase for the wholesale rates SBC charges competitors. TeleTech

SBC Allowed To Raise Wholesale Prices by 20 Percent in California
In a controversial decision, California’s PUC granted SBC Communications the right to raise wholesale rates by 20%. SBC will now be able to charge rivals $16.53 for every leased line, up from $13.93 per customer. At second quarters end, SBC was leasing 1.7 million wholesale lines in California. TeleTech

Verizon, Covad Reach Interim Agreement
Last fall, the FCC issued an order allowing Verizon to stop accepting new orders for line-sharing after October 1, 2004. However, in mid-September, Verizon announced that an interim wholesale agreement with Covad was reached. Verizon will continue to accept line-sharing orders from Covad through January 31, 2005. TeleTech

Wholesale Costs for SBC Approved in Michigan
The Michigan PSC approved a wholesale rate increase for SBC that will take effect once the company makes its compliance filings. The Commission found that while SBC Michigan’s cost to provide UNE’s has increased overall, the increase is not nearly as much as SBC argued for. Because price dictates cost, SBC Michigan is allowed to increase its wholesale rates, increases fall between 5-15%. TeleTech

Supreme Court Upholds Do-Not-Call List
The Supreme Court yesterday rejected a challenge to the national do-not-call list, thereby guaranteeing that the government-created anti-telemarketer list will remain in place. More than 64 million telephone numbers have now been added to the list. The Washington Post

ILECs Ask Court to Overturn FCC Rate Changes
Verizon Communications, Qwest Communications and the United States Telecom Association yesterday asked the U.S. Court of Appeals for the District of Columbia to mandate that the Federal Communications Commission abandon its temporary freeze on the wholesale rates regional phone companies charge their competitors to lease phone lines. The companies and the USTA argue the six-month freeze was a violation of an earlier ruling by the same court ordering the FCC to scrap the rules. The Washington Post

Powell says Telecom Act Needs A Rewrite
Federal Communications Commission Chairman Michael Powell yesterday said the Telecommunications Act of 1996 is "dated" and that a rewrite of the law should be a priority. Powell said any rewrite must take into account the nature of Internet technology and noted that lawsuits against the FCC have gotten out of hand. Denver Rocky Mountain News

A Texan's Race Could Lead to the F.C.C. Chief
WASHINGTON, Aug. 14 - Becky Armendariz Klein is widely expected to lose her bid for Congress in Texas. But that has not stopped executives and lawyers from the nation's largest telephone and energy companies from pouring money into her campaign. Indeed, some of her strongest supporters expect her to fail. Running as a Republican in a heavily Democratic district in Texas against a five-term incumbent, Ms. Klein, 39, has received more in donations and fund-raising help from the telecommunications and power industries than any other rookie candidate in the nation. Why is Ms. Klein such a draw? Because administration officials have said that in the event of a second Bush administration she would be considered by the president, whom she served as a senior policy adviser when he was governor of Texas, as a candidate to be the next head of the Federal Communications Commission. And even if that does not work out, she is expected to receive a seat on the Federal Energy Regulatory Commission, should a vacancy occur. Her husband is a senior official at the Pentagon. - New York Times 8/14/04

Bells Cut Retail Rates
Verizon, SBC and BellSouth are aiming to recapture market share by cutting retail rates for local service. A TNS Telecoms study shows that, in the second quarter of this year, the Bell companies increased their share of the home-phone market for the first time in five years. The price cuts have raised some concerns among state regulators, but the Bells say new entrants, such as cable and IP telephony, have made the marketplace more competitive. The Wall Street Journal

AT&T Plans to Raise Its Rates for Residential Calling Plans
aT&T Communications plans to reach out and put the touch on its customers proposing raising rates on several local calling plans in 40 states to increase revenues from its residential business. AT&T's decision to increase rates for most of its 4.7 million local phone customers comes less than two weeks after it decided not to seek new residential customers or to work to retain them. AT&T has notified state public utility commissions & the increases will affect AT&T customers in states including Florida, New York, Ohio and Texas. Consumers will pay two or three dollars more a month, starting in September and October, depending on the state. New York Times

Local Wholesale Rules Expire
The rules governing the wholesale rates at which the Baby Bells lease lines to competitors expired in June after the U.S. Supreme Court refused to delay the implementation of an Appellate court ruling that made them invalid. BellSouth, Qwest, SBC, and Verizon argued that the rules kept wholesale rates artificially low and forced them to subsidize their competitors. With those rules no longer applicable local telephone giants will turn to state regulatory commissions or commercially negotiated agreements for approval on rate increases. The issue has become a political hot-potato that could have an impact on this year's Presidential race. Coalitions of competitive local exchanges say regulations are needed to keep the local telephone market competitive. They threatened to air ads blaming President Bush for consumer telephone rates they say are imminent if the Justice Department refuses to intervene. Bush's political staff reportedly raised concerns that local exchange carriers would pass along increased costs to their customers which could hurt Bush in the upcoming election. The White House policy staff, however, reportedly opposed the Justice Department filing an appeal in the case saying that keeping the rules in place is against Bush's anti-regulatory stance. Shortly after the rules regulating the wholesale rates expired, AT&T announced that it would stop competing in residential local and long distance service in seven states due to the Bush administration's failure to intervene with an appeal. Political pundits, however, point out that those seven states, which include Ohio, Missouri, Washington, Tennessee, Louisiana, Arkansas and New Hampshire are likely to be battleground states in the upcoming election. With the rules officially expired, the FCC continues to plead with carriers to negotiate commercial agreements governing wholesale rates between incumbents and competitors. MCI and Qwest are among the few big players to have reached an agreement. In the interim, the Bells have agreed not to raise rates for the remainder of 2004. The FCC hopes to draft new rules that will withstand judicial appeals by that time. Tele-Tech

BellSouth Cuts Rates for Extended Area Service in N. Carolina
BellSouth announced a decrease in the rates it charges North Carolina customers for Area Plus Service, a premium flat-rate calling plan that allows LATA-wide unlimited local calling. Customers selecting Area Plus in North Carolina will now pay $26.55 per month, down from about $34. BellSouth reports that this decrease will save customers $19 million annually. Tele-Tech

Regulators Approve SBC Wholesale Rate Hike in Illinois
The Illinois Commerce Commission gave approval in June to an increase in the wholesale rates SBC charges competitors in that state. While SBC requested an average increase of $9.45 per month for each line leased by competitors, the Commission authorized an increase averaging $3.75. AT&T reacted by saying that evidence shows rates it pays SBC should actually have been reduced by $6 per month, and noted that the increase approved is 15 times the increase recommended by the ICC's independent expert regulatory staff and more than double the increase recommended by the ICC's independent Hearing Examiners. The Commission's decision was based on a unanimous 5-0 vote. Tele-Tech

SBC to Change Rates Charged to Competitors in Texas
Texas regulators are requiring SBC to revise the rates the company charges competitors to lease lines in the state. Rates competitors pay SBC will drop in rural and medium-sized cities, but increase slightly in Dallas, Houston, and San Antonio. AT&T, one of SBC's primary rivals in Texas, said that even with the reductions, the wholesale rates SBC charges in Texas are still the highest among the more populous states. SBC, pleased with the increase in the larger cities, argued that rates in even the rural and mid-sized cities were set below its cost for providing the service even before the reduction was ordered. Tele-Tech

Verizon Seeks to Raise Rates in Washington
Verizon Northwest has requested approval from state regulators to raise rates about 70%, and the company is looking for an interim rate increase while the overall rate hike is considered by the state Utility and Transportation Commission. The interim plan raises monthly rates for residential basic local lines from $13 to $16.54 and the basic monthly local line charge for business from $29.70 to $33.24. The interim rate increase is reportedly about one-eighth of the total requested by Verizon to increase rates by $240 million. The services effected by the overall increase have not yet been named. Verizon is requesting a decision on the overall proposal within 10 months. Tele-Tech

California Considers Raising Rates
California state regulators are debating whether to adjust upwards the wholesale rates charged by local telephone companies to its competitors. San Jose Mercury News (7/9/04)

House Subcommittee Takes up VoIP Debate
House subcommittee takes up VoIP debate The House Subcommittee on Telecommunications and the Internet yesterday held a hearing on VoIP regulation. One of the key issues on the table was whether the federal government should pre-empt states' regulation of the technology. Wired (7/8)

Texas PUC Rules on SBC Wholesale Line Rates
The state Public Utility Commission on May 28 ruled to lower the rates SBC charges competitors for its lines. Separately, the PUC ruled that SBC and Sage must make public their wholesale rates. The Dallas Morning News

California PUC Pass "bill of rights" on Wireless
The California PUC adopted a wireless "bill of rights" to protect mobile phone customers from deceptive marketing and billing practices. The new rules say, among other things, that providers must give customers a risk-free 30-day trial period to test products and calling plans. Los Angeles Times

Qwest, / MCI Reach Deal on Access Fees
Qwest and MCI have reached a deal that will allow MCI to provide local telephone services in Qwest's 14-state region. The four-year deal ends five weeks of negotiations. The Washington Post

Turning Around AT&T Not an Easy Task
AT&T CEO David W. Dorman has, in the words of a consultant, the "Herculean task" of turning around the company. AT&T has been rolling out new services to combat the erosion of its core long-distance business. The New York Times

FCC Releases UNE Rules Order
The FCC late Fri.02/04/05 took the next step toward limiting CLEC access to Bell network elements by releasing the final UNE rules it approved in Dec. The order, which will become final as soon as it’s published in the Federal Register, phases out CLEC use of TELRIC-priced UNE platforms and also reduces slightly the number of situations when the Bells must share high-capacity loops and transport. The new rules are expected to require competitors to change the way they deliver telephone service for both mass media and business customers, for example negotiating commercial agreements to replace Bell-provided UNEs.

Congress Supports Ban On Taxes For Internet
Congress passed a permanent ban on taxing Internet connections. A temporary ban first enacted in 1998, would expire on Nov. 1. The ban clarifies that all types of Internet access, from dial-up to high-speed DSL & cable modems cannot be taxed. Pending bill in Senate would allow the nine states who impose a communications tax on Internet connections , three years to phase them out.

SBC Passes Go To Offer L.D. In Michigan
FCC approved SBC's bid to offer long-distance service in Michigan. Michigan is one of the most competitive markets in the U.S., with CLECs controlling 21.7% of phone lines in the state.

MCI Hires Ex AT&T Exec as President
Richard Roscitt has been named the new President of MCI. Prior, Richard spent 28 years at No.1 U.S.long-distance company AT&T, where he was president of AT&T Business Services. He was Chairman of ADC since 2001.

Sprint Overcarges Federal Govt $2.6 Mil
The federal government may bar Sprint from further federal contracts for allegedly overcharging the Justice Department by $2.6 million. Sprint billing system was charging at standard rates instead of FTS rates.

Cell Phone Number Portability by Thanksgiving
FCC says carriers by November 24 must offer number portability in major markets. Some carriers will still attempt to avoid this. To recoup number portability technology some carriers i.e., Cingular, AT&T & Nextel started charging a monthly fee of $1.50. Verizon to hold off charging until November.

FCC Shows Increase In Telecom Complaints
The FCC's report on complaints for last quarter 2002 showed an 26.3% increase over 3rd quarter 2002. Cramming complaints rose by 33.7%. Of course billing was the biggest complaint for wireline, wireless & cable billing practices.

Qwest Billing Problem Hurts ($2.2 Billion)
Qwest's financial restatement filed indicates it had to eliminate $2.2 billion in revenue. A good portion of that came from billing errors. Qwest had to wipe out $43 million & $39 million over 2000 & 2001 "amounts billed to customers that Qwest subsequently determined to be inappropriate."``

Wireless Taxes Increasing
The average wireless consumer pays 14.29% in taxes. The top five states with the highest wireless taxes are New York 20.14, Illinois 19.71, Nebraska 19.23, Washington 19.22, & Texas 18.32. Plus the FCC also raised the wireless USF Fee on April 1, almost doubling the charge.

809 Area Code Scam
809 area code scam has been around for about five years and continues to victimize consumers on occasion, although much less frequently than in the past. In most cases a message is left on an answering machine or pager requesting a call immediately for one of several reasons. i.e.,information about a relative who has died, been arrested or injured. When consumers call the number, the scam artist attempts to keep the caller on the line for as long as possible to increase the caller’s long distance calling charges. The 809 area code is the country code for the Dominican Republic. The basic rate for a call to the Dominican Republic is less than $3 a minute although some 809 numbers terminate with pay-per-call services that permit the levy of additional fees. Since numbers located offshore are not subject to U.S. laws, there are no legal requirements that consumers be informed in advance of the extra charge.

Broadwing Sells Off Broadband
Broadwing Inc. parent of Cincinnati Bell agreed to sell its struggling broadband business for $129 million that it acquired for $3.2 billion. Broadwing will focus on its wireline & wireless business in Greater Cinti where it dominates market share of more than 1 million customers. Broadwing will most likely change its name back to Cincinnati Bell.

MCI Plans to Raise Rates on February 1, 2003
MCI announced plans to increase certain long-distance rates by 29 percent, or two cents. This will be the fourth rate increase since WorldCom filed for bankruptcy in July 2002. The plans effected, Anytime Calling, Anytime Advantage & MCI Select 200.

Worldcom To Cut More Jobs
Worldcom is expected to unveil a comprehensive cost cutting plan that will cut 5 to 10% of its work force and shed unprofitable customer contracts.

FCC Establishes Interim USF Rules
In December the FCC adopted interim rules for carriers contribution to the Universal Service Fund. The FCC voted to increase the percentage of revenues assumed to be interstate from 15 percent to 28.5 percent for wireless carriers. Also, the interim rules prohibit carriers from including a mark-up above their Universal Service Fund contribution if they choose to include this line item on clients' bills to help recover costs.

812 NXX's To Be Rationed
Indiana’s 812 NPA is exhausting its supply of assignable NXX codes. All remaining NXX codes in the 812 NPA will be rationed until implementation of a relief plan.

Ohio PUC Establishes New Competition Rules
The Ohio PUC has established guidelines and governing provisions for competitive telephone companies that enables the commission to effectively certify regulatory requirements on certification and tariffing of services for these companies.

MCI 80% Rate Hikes Effective
Effective 12/01/2002 MCI announced rate increases of as much as 80% on some of its domestic and international long distance plans. MCI customers could likely save money by subscribing to a different MCI calling plan.

Sprint Denied Rate Increase by Missouri PSC
Sprint filing / request for a 17% increase for business customers subscribing to the MCA service, which offers an expanded local calling area at a flat monthly rate. The request was denied due to the increase exceeded state law price caps. They'll be back.

Qwest Fined By PUC for Slam/Cram CA Customers
California PUC fined Qwest $20.3 million, plus customer refunds. Qwest was found to have slammed and crammed thousands of California customers in 1999 and 2000 when their long distance service was switched without their permission. The PUC found that third party verification tapes or letters of authorization had been falsified or were missing. Also, Qwest crammed thousands of California consumers, by adding unauthorized charges to their telephone bills.

Higher Cell Phone Fees
In an effort to increase their revenue wireless service fees are on the rise. Sprint PCS has extended peak-time hours an extra 60 minutes to 9 p.m. And starting Aug. 28, the company will deduct air time whenever customers use their cell phones to check their phone usage AT&T Wireless also increased fees this month for calling directory assistance from 99 cents to $1.25. They also began deducting air time for calls lasting longer than 30 seconds. Before, calls under one minute didn't count as air time.

Qwest Gets DOJ Approval to Offer Long Distance
The DOJ recommended approval of Qwest to offer long distance service in 5 states; CO, ID, IA, NE & ND. The DOJ"s decision should assist in the approval process with by the FCC by 9/11/02. AT&T said the application should be denied. Qwest has another 4 states application pending at the FCC.

Telecom Costs Could Rise 15%
Prices that business customers may pay are likely to rise as much as 15%. Competition that has driven rates & margins so low have contributed to telecom service providers financial instability. That combined executive stock options, accounting assistance from Arthur & CLEC failures we'll have have fewer providers. Rates will go up.

Southwestern Bell Likely to Raise Rates in Texas
The Supreme Court of Texas ruled that SW Bell could raise rates for 32 exchanges due to popuation density. This decision overturns a prior PUC rejection of the SW Bell rate increase.

Verizon Request Massachusetts Rate Increase
Verizon has proposed to the Dept. of Telecommunications & Energy (DTE0 a rate increase for business & residential. Verizon is also requesting a 5% rate increase annually without DTE approval and to remove most regulation on business services. The DTE to rule by the fall.

Pacific Bell Potential $27 Million Dollar Fine
PacBell may pay customers record fine of $27,000,000.00 for DSL service billed but never requested or received. This is on top of fines paid last year by PacBell for deceptive marketing.

Phone Sex Hits Phone Bills
Sex web sites usually charge your credit card, but now sites are tapping into customers phone bills. Deceived by the word "free" the user utilizing dial-up service gets disconnected from the internet and reconnected to a telephone line in another country. Foreign phone cos get a portion of the money with the local web host and U.S. phone cos get a fee for carrying the call as well.

Verizon Expands Local Calling Areas in NC & IN
Verizon added an optional calling plan in Raliegh for unlimted local calling. Verizon is also adding 3 additional local calling plan options for Indiana.

Worldcom to Cut 17,000 Jobs
Worldcom plans another round of job cuts, 17,000 or 20% of its global workforce. This is after an April notice that it was cutting 3700 U.S. jobs. Hello, operator "can you connect me to customer service". Click.