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Report: Baby Bells Find Way Around Regulations

July 15, 1996

NEW YORK (AP) _ Several regional Bell operating companies have reportedly told regulators they want to sell local phone service in their new long distance service operations, a move that would allow them to avoid many regulations but also likely to confuse customers.

Ameritech Corp., Bell Atlantic Corp. and Pacific Telesis Group want their unregulated long distance operations to sell many services, including local connections, The Wall Street Journal reported Monday.

Those units are not yet running and won’t be allowed to provide long-distance service until the companies prove there is competition in their main local phone businesses. However, they could begin reselling local services _ even combining them with cellular, paging and e-mail and other products _ as soon as state regulators certify them.

The so-called ``Baby Bell″ companies say they are only preparing to compete in the same fashion that existing long-distance and other firms will, particularly by being able to combine services. However, rivals and consumer advocates believe the companies are trying to avoid regulations.

``It’s a sham,″ Wisconsin attorney general James Doyle told the Journal. ``Instead of having regulated monopolies in control, we’ll have unregulated monopolies in control, and nobody will be able to compete with that.″

Potential rivals say the Baby Bells will favor their subsidiaries when making interconnection agreements and service contracts.

The Bell affiliates ``can’t be treated as any other company coming into the market, because they have the one thing that nobody else has: a monopoly local phone company for a parent,″ said Donna Sorgi, a regional executive for MCI.

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