KEEPING PROMISES

Verizon Communications announced last week it had surpassed Sprint as the nation's No. 3 long-distance provider, and the carrier believes it will blow past AT&T and WorldCom once it receives FCC approval for its remaining three states. Given the population densities and high number of large enterprises in its footprint, it's quite plausible. The carrier fulfilled its obligations to the FCC's satisfaction and now reaps the benefits. At the same time, this success should sound warning bells at the FCC. With the nation's most populated states and major business centers such as Chicago, Los Angeles and Houston, in its footprint, it is plausible that one day SBC Communications also will overtake the traditional long-distance giants. SBC also is well positioned to enter into Asia and Latin America. Though its states are less populated, BellSouth — which has completed the Section 271 process — has Atlanta and Miami in its footprint and can also tap into affiliates in Latin America. It is conceivable that the top three long-distance providers will eventually be Bell companies. Of course, the Bells are still the dominant players in the local market, with an 89% share, seven years after the Telecom Act's passage. In conducting its triennial review of unbundled network elements, the FCC must guard against erasing the marginal progress achieved by local deregulation. Should the FCC grant the Bells too much relief, the telecom industry could revert to three companies controlling local and long-distance in three regions, echoing AT&T's national grip before divestiture.