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SW Bell announces, then pulls, long-distance bid

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by Paul Flemming

and Karen E. Culp

SBJ Staff

Southwestern Bell was set to file May 15 for approval to provide long-distance phone service in Missouri, but company officials changed their plans May 13.

Now, the local-service phone company plans to file with the state's Public Service Commission in the near, though indefinite, future, said Amy White, a St. Louis-based spokesperson for the company.

SBC Communications Inc., parent company of Springfield's Southwestern Bell, announced May 11 its intention to execute a $62 billion merger with Ameritech, and Southwestern Bell has sought long-distance certification in the four other states in its service area.

Plenty of work on its corporate plate, as well as speed bumps on its road to approval in Missouri, played a part in Bell's decision not to start the process now, other telecommunications officials said.

The Missouri Telecommunications Coalition, which includes Brooks Fiber, MCI and AT&T, issued a preemptive strike May 12 opposing Southwestern Bell's entry in the long-distance business.

However, White said the decision was made on the basis of allocation of resources.

"We have begun the process and are in varying stages of completion in several states and at this time could not commit more resources to filing another application," White said.

Though the company thought it would have a team in place to prepare the application, which is thousands of pages long, those resources were committed in other areas, White said.

Officials from Southwestern Bell appeared before the state regulatory agency May 12 and announced the impending filing, said Kevin Kelly, a spokesman for the PSC. May 13 the commission was informed that the filing would not occur as planned on May 15, Kelly said.

Following the May 12 announcement, the Missouri Telecommunications Coalition issued a statement urging the PSC to reject the Southwestern Bell filing.

"We feel that this filing is entirely premature. Federal law requires them to give up their monopoly on local service before they can get into long-distance service. They have obviously failed to meet this test," said Diane Miller, a spokeswoman for the telecommunications association.

Miller cited information from Southwestern Bell that shows just more than one-half of 1 percent of customer lines in Missouri are being used by competitors since the advent of local competition. White countered that the purpose of the federal and state laws was to open the markets to competitors.

"We were required to open our markets, and we have fulfilled that obligation. The fact that the competitors are not coming forward has nothing to do with availability. For most of those competitors, this is a business decision. The profit margins in local service are not as high compared to long distance," White said.

Southwestern Bell has filed with regulators in Oklahoma, Arkansas, Texas and Kansas to provide long distance service in those states, White said.

David Boatner, president of Mc-Leod USA's business services division, the company that is purchasing Springfield's Dial US, said he was concerned somewhat with Southwestern Bell's impending filing, but not surprised. "I fully expect them to pursue long-distance service in Missouri," he said.

Boatner echoed Miller's concerns about the lack of competition in local service.

"In Springfield, Dial US has 900 customers out of (an estimated) 15,000 (business customers). That does not represent true competition," Boatner said.

One criterion for Southwestern Bell's entry into the long-distance business is "meaningful" competition in the local market, according to the federal law that broke up the local-service monopoly.

McLeod plans to step up Dial US' service, by using its own equipment to provide local service, rather than reselling Southwestern Bell services as Dial US does now.

Jim Hedges, Dial US' founder, said that if McLeod's efforts bring greater competition to Southwestern Bell, it will "facilitate Bell getting into long distance sooner."

Boatner said the company plans to "openly market residential" service in Springfield.

"That will be a priority for us. We want to develop a serious presence in residential service," Boatner said.

Southwestern Bell's activities in Missouri came on the heels of SBC Communications' May 11 announcement that it will merge with Ameritech.

"We'll be dealing with an even bigger monopoly once this merger is approved. I suspect that approval will be a long process, however," Boatner said.

Hedges said the Ameritech announcement may have had a bearing on the filing plans in Missouri.

"An organization can only do so many things at one time. Maybe Ameritech is more important to them than approval in all five states," Hedges said.

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