AT&T Asks Public Utility Commission to Clarify, Adopt and Enforce Pro-Competition Rules Now or Risk Failure Of Local Phone Competition in Pennsylvania

'The Next Nine Months ... May Determine the Success or Failure

Of Local Competition in Pennsylvania'



Apr 18, 2001, 01:00 ET from AT&T

    HARRISBURG, Pa., April 18 /PRNewswire/ -- In a petition to the
 Pennsylvania Public Utility Commission (PUC) filed today, AT&T (NYSE:   T)
 called on state regulators to clarify, adopt and enforce immediately a set of
 interim rules governing the business practices of Verizon (NYSE:   VZ), the
 state's largest local phone monopoly.  AT&T said these interim actions are
 consistent with prior directives of the PUC that Verizon implement these
 competitive safeguards and are necessary to "prevent competition from being
 placed 'on hold' in Pennsylvania," pending a potentially lengthy rulemaking
 process.  The process will formalize the Commission's rules, and is expected
 to take several months to complete.
     Pointing to Verizon's long history of blatant non-compliance with
 Commission requirements, AT&T urged the PUC to implement immediately an
 interim plan for functionally separating Verizon's wholesale and retail units,
 and to take necessary initial steps to assure that competitors can use the
 same systems as those used by Verizon's retail unit to order and provision
 phone lines.
     AT&T also submitted an analysis detailing several Verizon violations of
 the Interim Code of Conduct that have already been discovered.
     "It is critical that Verizon not be permitted to ignore and evade its
 applicable legal requirements any longer," AT&T said in its petition.  "The
 next nine months represent a critical stage which may determine the success or
 failure of local competition in Pennsylvania."
     "The Commission has determined that, at least for now, Verizon need not
 structurally separate its wholesale and retail operations," said Jim Ginty,
 president of AT&T-Pennsylvania. "The Commission instead is relying on a
 functional separation of these operations and a strict code of conduct to
 govern the relationship between them.
     "If functional separation is implemented as intended by the Commission and
 if the code of conduct is rigorously enforced, competition in Pennsylvania
 might become a reality," said Ginty.  "We are concerned, however, that,
 without appropriate action now, we could see a re-monopolization of
 Pennsylvania's entire communications market, with Verizon as the monopoly."
     AT&T filed its petition today in response to the Commission's April 11
 order that provides details of the rules the Commission set in its
 much-anticipated March 22 motion covering the structural separation of
 Verizon.  In its March 22 motion, the Commission ordered Verizon to comply
 with a set of conditions, including a Code of Conduct governing the
 interaction of Verizon's wholesale and retail units, or face full structural
 separation of those units.
     The PUC had ordered the Code of Conduct previously as part of its
 September 1999 Global Order on Local Phone Competition.
     "Verizon has not only refused to comply with the Commission's Code of
 Conduct, but has refused to even acknowledge the Code's relevance to its
 operations," AT&T said in its petition.
     In its petition today, AT&T also expressed concern over public statements
 made by Verizon officials following the March 22 motion.  "In a press
 conference immediately following the Commission's March 22, 2001, Public
 Meeting ... Verizon ... told the world that [it] would conduct 'business as
 usual,' and that Verizon would not alter its conduct as a result of the
 functional/structural safeguards adopted by the Commission.  As the Commission
 conclusively found in its September 1999 Global Order, business as usual for
 Verizon means acting in a manner in which the Company 'abused its market power
 by providing competitors with less than comparable access to its network or
 engaged in other discriminatory conduct that prevented [and will continue to
 prevent] [Verizon] customers from switching to a competitor.'"
     "Indeed, rather than comply with the Commission's mandatory requirements,
 Verizon has maintained its existing organization under which it completely
 segregates treatment of its retail competitors from treatment of its own
 retail operations -- thus formalizing, rather than preventing, market power
 abuses and discriminatory behavior," AT&T said.
     AT&T said the Commission's current scheme for functional/structural
 separation "provides for strict standards which, if implemented properly,
 could serve as an effective, long-term competitive safeguard."
     Among the measures AT&T proposed today in its petition to the Commission:
 
     *  Assuring that Verizon modifies its current organization, establishing a
        wholesale unit that serves all competitors as well as its own retail
        unit
 
     *  Limiting marketing and customer acquisition activities to Verizon's
        retail unit
 
     *  Relegating network operation, maintenance and repair, new service
        installation ordering, billing and collection and operations support
        systems to the wholesale unit, although the retail unit also would be
        permitted to develop functions like new service ordering and billing
        for its own use or use third-party services.
 
     *  Requiring an annual audit by an independent third party to ensure that
        Verizon is in compliance with the Commission's directives regarding
        structural separation and is complying with the code of conduct.
 
     The foregoing are "forward-looking statements" which are based on
 management's beliefs as well as on a number of assumptions concerning future
 events made by and information currently available to management. Readers are
 cautioned not to put undue reliance on such forward-looking statements, which
 are not a guarantee of performance and are subject to a number of
 uncertainties and other factors, many of which are outside AT&T's control,
 that could cause actual results to differ materially from such statements. For
 a more detailed description of the factors that could cause such a difference,
 please see AT&T's filings with the Securities and Exchange Commission. AT&T
 disclaims any intention or obligation to update or revise any forward-looking
 statements, whether as a result of new information, future events or
 otherwise. This information is presented solely to provide additional
 information to further understand the results of AT&T.
 
     Logo:  http://www.att.com/identity/library/
 
 

SOURCE AT&T
    HARRISBURG, Pa., April 18 /PRNewswire/ -- In a petition to the
 Pennsylvania Public Utility Commission (PUC) filed today, AT&T (NYSE:   T)
 called on state regulators to clarify, adopt and enforce immediately a set of
 interim rules governing the business practices of Verizon (NYSE:   VZ), the
 state's largest local phone monopoly.  AT&T said these interim actions are
 consistent with prior directives of the PUC that Verizon implement these
 competitive safeguards and are necessary to "prevent competition from being
 placed 'on hold' in Pennsylvania," pending a potentially lengthy rulemaking
 process.  The process will formalize the Commission's rules, and is expected
 to take several months to complete.
     Pointing to Verizon's long history of blatant non-compliance with
 Commission requirements, AT&T urged the PUC to implement immediately an
 interim plan for functionally separating Verizon's wholesale and retail units,
 and to take necessary initial steps to assure that competitors can use the
 same systems as those used by Verizon's retail unit to order and provision
 phone lines.
     AT&T also submitted an analysis detailing several Verizon violations of
 the Interim Code of Conduct that have already been discovered.
     "It is critical that Verizon not be permitted to ignore and evade its
 applicable legal requirements any longer," AT&T said in its petition.  "The
 next nine months represent a critical stage which may determine the success or
 failure of local competition in Pennsylvania."
     "The Commission has determined that, at least for now, Verizon need not
 structurally separate its wholesale and retail operations," said Jim Ginty,
 president of AT&T-Pennsylvania. "The Commission instead is relying on a
 functional separation of these operations and a strict code of conduct to
 govern the relationship between them.
     "If functional separation is implemented as intended by the Commission and
 if the code of conduct is rigorously enforced, competition in Pennsylvania
 might become a reality," said Ginty.  "We are concerned, however, that,
 without appropriate action now, we could see a re-monopolization of
 Pennsylvania's entire communications market, with Verizon as the monopoly."
     AT&T filed its petition today in response to the Commission's April 11
 order that provides details of the rules the Commission set in its
 much-anticipated March 22 motion covering the structural separation of
 Verizon.  In its March 22 motion, the Commission ordered Verizon to comply
 with a set of conditions, including a Code of Conduct governing the
 interaction of Verizon's wholesale and retail units, or face full structural
 separation of those units.
     The PUC had ordered the Code of Conduct previously as part of its
 September 1999 Global Order on Local Phone Competition.
     "Verizon has not only refused to comply with the Commission's Code of
 Conduct, but has refused to even acknowledge the Code's relevance to its
 operations," AT&T said in its petition.
     In its petition today, AT&T also expressed concern over public statements
 made by Verizon officials following the March 22 motion.  "In a press
 conference immediately following the Commission's March 22, 2001, Public
 Meeting ... Verizon ... told the world that [it] would conduct 'business as
 usual,' and that Verizon would not alter its conduct as a result of the
 functional/structural safeguards adopted by the Commission.  As the Commission
 conclusively found in its September 1999 Global Order, business as usual for
 Verizon means acting in a manner in which the Company 'abused its market power
 by providing competitors with less than comparable access to its network or
 engaged in other discriminatory conduct that prevented [and will continue to
 prevent] [Verizon] customers from switching to a competitor.'"
     "Indeed, rather than comply with the Commission's mandatory requirements,
 Verizon has maintained its existing organization under which it completely
 segregates treatment of its retail competitors from treatment of its own
 retail operations -- thus formalizing, rather than preventing, market power
 abuses and discriminatory behavior," AT&T said.
     AT&T said the Commission's current scheme for functional/structural
 separation "provides for strict standards which, if implemented properly,
 could serve as an effective, long-term competitive safeguard."
     Among the measures AT&T proposed today in its petition to the Commission:
 
     *  Assuring that Verizon modifies its current organization, establishing a
        wholesale unit that serves all competitors as well as its own retail
        unit
 
     *  Limiting marketing and customer acquisition activities to Verizon's
        retail unit
 
     *  Relegating network operation, maintenance and repair, new service
        installation ordering, billing and collection and operations support
        systems to the wholesale unit, although the retail unit also would be
        permitted to develop functions like new service ordering and billing
        for its own use or use third-party services.
 
     *  Requiring an annual audit by an independent third party to ensure that
        Verizon is in compliance with the Commission's directives regarding
        structural separation and is complying with the code of conduct.
 
     The foregoing are "forward-looking statements" which are based on
 management's beliefs as well as on a number of assumptions concerning future
 events made by and information currently available to management. Readers are
 cautioned not to put undue reliance on such forward-looking statements, which
 are not a guarantee of performance and are subject to a number of
 uncertainties and other factors, many of which are outside AT&T's control,
 that could cause actual results to differ materially from such statements. For
 a more detailed description of the factors that could cause such a difference,
 please see AT&T's filings with the Securities and Exchange Commission. AT&T
 disclaims any intention or obligation to update or revise any forward-looking
 statements, whether as a result of new information, future events or
 otherwise. This information is presented solely to provide additional
 information to further understand the results of AT&T.
 
     Logo:  http://www.att.com/identity/library/
 
 SOURCE  AT&T

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