FCC OKs local, long-distance integration

AT&T and Verizon are now free to merge their in-region local and long-distance operations under an order issued by the Federal Communications Commission just before the Labor Day weekend.

In exchange for the new freedoms, which will enable the companies to operate more cost-effectively, the two telecom giants agreed to offer special rate plans for low-volume users and to make information available to consumers that will enable them to choose the best rate plan based on their usage needs. In addition, the new regulatory framework maintains price caps on special access services that AT&T and Verizon sell to competitors.

Democratic Commissioners Jonathan Adelstein and Michael Copps dissented in part from the ruling because it lacks “a comprehensive mechanism for monitoring changes in the marketplace” that would enable the FCC to continue promoting competition and choice for consumers, the two said in a joint statement. “We would have preferred that the commission adopt a formal, comprehensive mechanism for verifying whether the predictions in this order prove accurate.”

They also expressed disappointment “that the commission reaches beyond the rulemaking proceeding to grant forbearance from the long-standing equal access scripting rules that require customers be informed of their right to select the long-distance provider of their choice,” the statement said. Adelstein and Copps said they are concerned consolidation is creating a duopoly that won’t provide enough competition to keep prices down and serve consumers well.

Republican Commissioner Deborah Tate called the ruling “a carefully balanced approach, providing regulatory relief to the incumbent Bell operating companies, allowing them to respond to marketplace demands efficiently and effectively, but ensuring that less intrusive or less costly regulation remains that protects important consumer interests and competition.”

Qwest Communications got similar freedoms earlier this year. The commission said the ruling makes a recent AT&T forbearance filing moot.

“This will allow us to operate our local and long-distance services in a manner similar to that of our competitors and to better serve our customers,” an AT&T spokesman said in an e-mailed statement.