FCC to overhaul long-distance application process: LCI suggests alternate plan

Federal regulators are finalizing details for a new, "collaborative" approach to helping Bell regional holding companies apply to provide long-distance service within their local service regions.

FCC Commissioner Michael K. Powell conceded that the recent U.S. District Court decision declaring key checklist sections of the 1996 Telecommunications Act unconstitutional was a "stern wake-up call," highlighting the perception that the long-distance application process-also known as the 271 process-"is broken or at least in need of significant repair," he said.

In a December speech at the Practicing Law Institute, FCC Chairman William Kennard recommended that the FCC begin working intensively with any Bell company preparing a 271 application before the application is filed. Since then, Kennard has directed agency staff to begin working with the Bell companies on those grounds.

"We applaud what Commissioner Powell and Chairman Kennard are suggesting," said Tom Tauke, senior vice president for government relations at Bell Atlantic. Tauke cautioned that while his company applauds the commission's recommendations, it is not yet clear how the general suggestions would translate into specific activities. He expressed concern that new procedural requirements might prolong the 271 application process even further.

"Knowing that there are always players that are interested in delay, we certainly don't want to give them any new opportunities," Tauke said.

Powell emphasized that he was not calling for a process that would make it easy for RHCs to get into long-distance without first complying with the local market opening measures set by Congress and the FCC.

"What I am calling for is a process that will clearly place in the hands of the [RHCs] the seeds of their own success, which will ultimately bear fruit for the American consumer," Powell said.

Kennard is expected to suggest that the commission schedule a series of meetings with each RHC and potential competitor to review disputed checklist items and other competitive issues in both local and long-distance markets, industry sources say.

One interexchange carrier, LCI, already has made its opinion known. Last week it filed a petition with the FCC requesting that the RHCs be allowed "fast track" entry into long-distance if they agree to divide their retail and wholesale operations into two separate units. All network resources would reside with the original company, while a separate publicly held company with its own board of directors would handle the retail side. CompTel, the IXC trade association, has endorsed LCI's proposal.

Increasing focus on customers and growth areas in telecommunications are two goals Richard McGinn has set for himself as he takes over as head of Lucent Technologies.

Currently president and CEO, a title he was given in October, McGinn, 51, will be named chairman of the company on Feb. 18. The succession of McGinn over Henry Schacht, 63, will take place following Lucent's annual shareowners' meeting.

Schacht will continue to serve on Lucent's board of directors as an outside member and senior adviser.

"Working closely with Rich has been a rewarding experience for me on both a personal and a professional level," said Schacht. "His vision for Lucent and its place in the industry have been both energizing and inspiring, and his leadership will ensure its success."

McGinn shared some of his visions for the $27 billion communications networking technology company.

"We want to intensify our focus on customers as well as [focus on] investing in the highest growth areas, including microelectronics, data networking and other overall network elements," said McGinn, who has been president of Lucent since it was spun off from AT&T in April 1996.

Lucent would continue to expand its involvement in Internet protocol telephony, McGinn said.

"We expect to see several percentage points' growth in voice traffic, particularly, over the next four years," he said, "and we plan to be a major player in that arena."