Lone star long-distance?

SBC Communications is putting the finishing touches on a plan to sell long-distance telephone service in its home state of Texas. One of the final steps, testing its operations support systems, is expected to begin this month.

The San Antonio-based carrier is hot on the heels of Bell Atlantic in the race to become the first regional Bell operating company to sell in-region long-distance. SBC expects to file an application with the FCC this summer, said a company spokesman.

If approved, SBC could enter Texas' $6.5 billion long-distance market. But some analysts question how hard SBC is trying, given the attention it is devoting to acquiring Ameritech.

"It's potentially a lucrative market, but SBC hasn't been particularly aggressive. They're more concerned with Ameritech," said Simon Reeves, a senior analyst at Decision Resources.

An SBC spokesman responded, "To accomplish what we want to accomplish with the [Ameritech] merger, we need long-distance relief." SBC wants to be a national full-service voice and data provider.

If SBC meets the conditions laid out by the Texas Public Utility Commission, "they'll have a 95% chance of getting [approval] at the federal level," said Charles Kallenbach, vice president of regulatory affairs at e.spire Communications, a Maryland-based competitive local exchange carrier that operates in Texas.

The Texas PUC, whose recommendation is needed for a federal filing, rejected SBC's bid last May. Since then, it's overseen a detailed "collaborative process" with the carrier and its rivals. More than 160 PUC recommendations have been whittled down to 15, said an SBC spokesman.

Chief among the outstanding items is testing SBC's OSS, which lets CLECs switch customers easily by providing them information about customer accounts, installations, repairs and billing.

The Texas PUC hired Telcordia Technologies (formerly Bellcore) as a consultant to design, run and evaluate an OSS test, to be completed by mid-year. "The best test would be for large competitors to enter the market and process a volume of real orders; however, that has not yet happened," the PUC reported to the state legislature in January.

Some CLECs said the testing won't be as rigorous as that in New York state

SBC said it has handled more than 2.1 million service orders from Texas CLECs during the past 18 months. The Texas PUC did not respond to interview requests.

Some CLECs are happier than others with SBC's OSS. "Our own very limited test shows they're nowhere near where they need to be," said an MCI WorldCom spokeswoman. The company has provided free local service to 59 residential customers in Houston since June; all but nine had some problems, she said.

In a complaint to the Texas PUC, MCI said its customers have experienced lost dial tones, missed directory listings, botched installations and cross-talk.

In contrast, Dallas-based CLEC Allegiance Telecom is relatively satisfied. "Their OSS is fairly well-managed," and SBC has been responsive to problems, said Robert McCausland, vice president of regulatory and interconnection. Allegiance sells bundled services to businesses in Dallas, Fort Worth and, soon, Houston.

No one contests that SBC faces facilities-based local-service competitors in both business and residential markets in Texas, as the law requires. The level of competition isn't high-SBC had a 98% market share in 1997, according to state regulators-but the company claims it is losing ground, especially in the business arena.

As of Feb. 1, CLECs had captured 761,000 access lines, or about 6% of the state's total, mainly in Dallas, Houston, Austin and San Antonio, said an SBC spokesman. That figure includes 3.7% of all residential lines and 13.3% of all business lines in Southwestern Bell's Texas territory. The other main incumbent, GTE, serves about a quarter of Texas.

"They're eating our lunch. They have package and pricing flexibility. We don't," the SBC spokesman said.

CABLE RIGHTS FCC Chairman William Kennard has kicked off a "cable consumer bill of rights" campaign. The FCC, which stopped regulating most cable rates March 31, wants to educate customers, especially senior citizens, about rate increases and how to file complaints. The agency will continue to review appeals of local rate orders.

NEW VP FOR ALTS Jonathan Askin, a former staff member of the FCC Common Carrier Bureau, is now vice president of law at the Association for Local Telecommunications Services. Askin will oversee federal legislation, RBOC in-region long-distance efforts and other legal affairs for the Washington trade group of competitive carriers.