FCC Approves SBC Communications' Long-Distance Plan

ST. LOUIS – SBC Communications Inc. received permission Friday from the Federal Communications Commission to begin offering long-distance service to customers in Missouri and Arkansas.

The decision allows SBC to offer the service in the five states served by its SBC Southwestern Bell subsidiary. SBC has already received permission to compete in the long-distance market in Texas, Kansas and Oklahoma.

"Approval of SBC's joint application promises substantial benefits for the states' consumers in the form of enhanced competition in both the local and long-distance markets," the commission said in a statement.

SBC can start offering the service in Arkansas on Nov. 26. The Missouri Public Service Commission, which supported the company's application, must provide final approval before service can begin here.

A 1996 federal law allows SBC and other local-phone monopolies to enter the long-distance business if they can show that their local-phone service is open to competitors.

Under the law, SBC must sell competitors access to its local lines at wholesale rates. SBC said it has spent more than $3 billion to open its local-phone markets to competitors.

SBC Southwestern Bell is Missouri's largest local telephone service provider, with about 3.7 million lines, or 73 percent of the total. Competitors currently service about 295,000 lines.

"Long distance is more than just another product — it rounds out SBC's full-service bundles and is key to capitalizing on data, our company's single biggest growth opportunity and new core business," said Forrest Miller, president and chief executive officer of SBC Southwestern Bell.

While the FCC's decision was unanimous, there was significant discussion among commission members on whether SBC has made its DSL high-speed Internet access service available for resale, and if the federal law governing entry to the long-distance market requires such resale.

"Today's decision is the closest of calls," said Commissioner Michael J. Copps.

Copps said the commission will address the issue in a "new and separate" proceeding, which could lead to changes in Friday's decision.

The Justice Department twice expressed concerns about allowing SBC into Missouri's long-distance telephone market. Following the departments initial objection, the company drafted a new application that promised to offer lower rates to competitors for use of local telephone lines.

In September, the Justice Department continued to withhold its support, saying the FCC should review the prices SBC Southwestern Bell charges for rivals to use its local telephone network in Missouri.

The department also questioned whether Arkansas had established appropriate performance oversight and enforcement measures to monitor SBC Southwestern Bell once it enters the state's long distance market.

In addition to SBC Southwestern Bell, San Antonio-based SBC Communications also owns SBC Pacific Bell, SBC Ameritech and SBC Southern New England Telephone. The company also has a 60 percent interest in Cingular Wireless, a joint-venture with BellSouth.

"We look forward to the day when we can offer long-distance service to customers throughout our 13-state service area," said Cassandra Carr, SBC's senior executive vice president for external affairs.