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Choice enters toll-calling market

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by Karen E. Culp

SBJ Staff

Local telephone customers will have as much choice about their local carrier as they do about their long distance carrier beginning this month.

The Missouri Public Service Commission issued an order, effective June 21, that intraLATA dialing parity would be implemented beginning July 22 in the state. LATA stands for local access and transport area and is a local toll-calling zone.

In the Springfield area's zone, Southwestern Bell has carried the local toll calls unless customers used an access code, the 1010 codes advertised by AT&T and MCI, said Art Kuss, utility engineering specialist with the PSC.

"Now customers will have a choice of which company will carry their 1+ intraLATA call. This way, they can use someone other than the carrier that has traditionally been assigned to them, such as a Southwestern Bell in the Springfield area," Kuss said.

The switch to the new system begins July 22, but there is a 90-day transition period, according to the PSC's order.

The measure is yet another to promote competition in the telecommunications industry, the order states, and is the result of a Federal Communications Commission order that required all local-exchange telephone service providers to file plans for implementing intraLATA dialing parity by April 22.

The Public Service Commission consolidated the local exchange companies' filings and held a hearing May 17-26 on the issue of dialing parity.

Steve Smith, senior manager for sales and marketing of Dial US, a McLeod USA company, said officials there are "very excited about the change."

Dial US is a Springfield-based local exchange company that provides phone service to its customers by reselling Southwestern Bell's service. Founded by local businessman Jim Hedges, the company sold to McLeod in 1998.

"We think this is good for the customer and great for competition," Smith said.

In order for Dial US to carry its customers' local long distance calls, the company has either had to install processing equipment on the phone systems or program the customer's phone to dial its 1010 code when the customer calls within the local exchange.

"This represents the first time ever people in this area have a choice for who handles their 417 calls. Before, they had a choice, but they also had extra digits to dial and more to think about. This really simplifies the process for everyone," Smith said.

In addition to simplicity, the measure should reduce rates as a result of competition, Smith added.

"This levels the playing field for us. Customers will like this because it should lower their rates," Smith said.

Though it is not yet fiber-deployed in the area, Dial US has plans to become a facilities-based provider. By 2000's end, the company will be providing unbundled local network service, Smith said.

AT&T sees the advantages of the new system, also, said regulatory manager Matthew Kohly.

"We plan to aggressively market to be the local carrier, especially in areas that are Southwestern Bell-dominated," Kohly said.

Southwestern Bell is "always for full competition" in the telecommunications market, said its spokesman, Paul Snider.

"We see this as a great benefit for consumers. Competitors can come and compete, and the result should be better prices and service for everybody," Snider said.

The local exchange competition measure is the result of language in the federal Telecommunications Act of 1996 that calls for dialing parity to begin three years after the act passed.

Snider said the act anticipated that dialing parity would be implemented in conjunction with local service providers like Southwestern Bell entering the long-distance market. Bell is still waiting for its debut in long distance, however, Snider said.

Southwestern Bell has filed an application with the PSC, which requires that the PSC evaluate the amount of local competition Bell faces in Missouri and make a recommendation to the FCC on whether Southwestern Bell should be allowed to enter the long-distance market.

The PSC bases its decision on a checklist of 14 items set out in Section 271 of the Telecommunications Act, and now, the Missouri PSC has called for a set of performance measurements based on those checklist items to be established, Snider said. Bell filed its application Nov. 20, 1998, and the PSC has been evaluating it since that time.

On June 22, the PSC issued an order directing its staff to consult with the other parties in the case and make suggestions to the commission regarding what performance measurements should be included in evaluating the company's compliance in Missouri, the order states.

Staff has until July 22 to submit a report based on three specific questions the commissioners laid out in the order.

Kohly said AT&T plans to participate in the process for determining the performance measurements.

The measures are necessary to ensure that competitors with Bell are getting equal treatment as required by the Telecommunications Act, Kohly said.

"The performance measurements are designed to ensure that Southwestern Bell is providing the necessary services in opening its markets to competition, that it is providing service to its wholesale customers in the same manner that it is providing service to its retail customers," said William Voight, supervisor of telecommunications for the PSC.

Wholesale customers include telecommunications companies that must use Bell's physical facilities to reach their customers, Voight said. There are a number of areas where Southwestern Bell's service to wholesale customers can be evaluated: interconnections, repair and maintenance, for example.

"These measurements will gauge how well those processes are occurring," Voight said.

The PSC is asking that three questions be considered as the parties and staff work together on the matter. The commission asks for a comparison of the measurements set out in Bell's case for providing long distance in Texas, an allowable variance for success of each measurement and a consideration of Missouri data in the measurements.

Snider said Southwestern Bell's position remains that there is sufficient competition in the local market in Missouri for Bell to enter the long-distance market. Other telecommunications groups have contended that not enough competition yet exists.

"Right now, less than 1 percent of customers in the state have a choice, and until that changes, you can't really argue that there's competition in the state," Dial US's Smith said.

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