What is local competition

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AT & T2 Chairman C. Michael Arm-strong said local phone competition will spur telecommunications companies to invest in the broadband net-works Pennsylvania needs to become a leader in electronic commerce. Broadband networks carry largevolumes of information, including voice data, video and audio signals, at high speeds.
Armstrong delivered the keynote speech Wednesday at a conference on electronic commerce sponsored4 by the World Affairs Council of Philadelphia. "To realize Philadelphia's future as a Hub6 in the emerging digital economy, we needto replace the Bell monopoly in local phone service with market forces," said Armstrong. "Bell Atlantic still controls 98 percent of the local phone market in the territory it serves.”

“I think we've demonstrated that AT&T is willing to make the investments necessary to put a big dent in that local service monopoly, "'he said.”But we expect regulators to keep their end of the bargain by opening local markets to competition before they let the regional Bell monopolies into long distance. "On April 22, AT &T announced a $58 billion bid for Media One Group10, one of the nation's largest cable companies.
Earlier this year, AT &T completed a $48 billion acquisition" of TCI12, another leading cable company, and an $11 billion acquisition of Teleport Communications Group'3 (TCG), a local phone service provider in Philadelphia, Pittsburgh14 and other U. S. metro-politan15 markets.AT & T has an infrastructure" investment of more than $1.2 billion in the Philadelphia metropolitan area, a major portion of AT &Taste tall $3.3 billion infrastructure investment in Pennsylvania to date. AT &T plans to invest $ 100 million to upgrade TCI's cable infrastructure in Pittsburgh, one of the first markets where AT &T will test advanced cable telephone services.

Armstrong called for several actions to open the state's local phone market to competition. He said the Bell companies must “let competitors use their monopoly facilities at economically viable, cost-based rates,"17 and "cooperate in switching customers from their network to ours.”"Three years after the Telecom Act'8 was passed, not one Bell Company has developed efficient systems and processes to do that," he said. "I'm sure you've read newspaper stories about business customers losing dial tone— or their directory listings — when they tried to switch their local service to another company.”

Armstrong also said, for competition to develop, regulators must reduce to cost the inflated fees the Bell companies charge long distance companies to connect their calls. By reducing inflated fees to cost, the government would eliminate a huge financial advantage Bell Atlantic and other Bell companies could use to thwart19 competition in their home markets.

“Excess access fees are costing the residents of this state more than $ 1 70 million a year," he said. "The fact is, the Bells have been using access fees to finance their ambitious overseas investment, not to upgrade local lines right here at home.”Calling the fees a "hidden tax," Armstrong said inflated access fees cost consumers nationwide $10 billion. "Local phone companies charge about 4. 6 cents a minute to complete both ends of a long distance call, “he said.”Their actual cost is about a half a cent a minute. "

Armstrong noted that instead of opening local markets competition, Bell Atlantic is "looking to make its monopoly market even larger" through its pro-posed merger with GTE20, Pennsylvania's second largest local phone monopoly. "That may be good for Bell," he said. "But it would be bad news for Pennsylvania's consumers.”

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