FCC Votes to Open Local Phone Markets to Increased Competition

The Federal Communications Commission voted Tuesday to open the market for local telephone service to increased competition.

The agency voted to require the local phone companies to allow expanded competition in the portion of the network that carries interstate calls between the local phone company switch and long-distance carriers.

The ruling will allow so-called alternative access providers such as suburban Chicago-based MFS Communications Co. to compete in the roughly $4.2-billion market now controlled by traditional local phone companies. Cable companies and other service providers also could enter the market.

“This represents a milestone for the telecommunications industry,” FCC Commissioner Andrew Barrett said. “It . . . takes the next logical step in the continuing progression toward more competitive telecommunications markets.”

The decision included a provision that allows local telephone companies to give discounts to volume users and companies that agree to long-term contracts.

FCC Commissioner Ervin Duggan dissented from that portion of the ruling, maintaining that if the commission gives local phone companies too much leeway on pricing, “emerging local competitors could be stalled at the gate.”

The agency also ruled that the rate structure must reflect actual costs and must be “unbundled” so services can be purchased separately.

In a related matter, the FCC voted to modify a September, 1992, ruling, adding a provision ensuring that customers who already have long-term contracts do not face obstacles to obtaining service from an alternative supplier.