Split on the Verizon

Pennsylvania to vote on dividing bell

Verizon Communications and AT&T are shelling Pennsylvanians with advertising blitzes as the corporate giants battle to influence state regulators over plans to cut Verizon of Pennsylvania in two.

Members of the Pennsylvania Public Utility Commission are expected to vote for a plan Thursday, March 22, that would cleave Verizons Pennsylvania arm into wholesale and retail branches. Verizon has legally and politically fought the separation for 18 months. A Solomon-like decision to split the "Baby" Bell, however, is supported by Ma Bell — AT&T.

The regulatory plan — unique to Pennsylvania, so far — would force Verizon to buy access to its own loops and lines on the same footing as it sells those services to competitors.

Business telecommunications customers have a stake in the outcome, with each side arguing that a victory for the other will mean higher charges.

Developments are being watched closely, not by Pennsylvania consumers alone, but also by the other regional Bells and their competitors, Congress, the Federal Communications Commission and other state utility commissions.

Split Endorsed

Jim Osborn, director of the Pittsburgh Robotics Initiative, a group supporting an emerging robotics industry in western Pennsylvania, is backing the split.

"The message this sends to the rest of the world is that Pennsylvania is not interested in Old Economy, business-as-usual, monopoly practices in any industry," Osborn said. "Competition is a good thing, but particularly when were talking about technology, because [telecommunications] is so much a part of our industrys future."

As the telecom giants traded barbs last week, Verizon spokeswoman Sharon Shaffer accused AT&T of "actively exporting the idea of structural separation" to other states. She characterized the idea as an extreme regulatory measure, one that will ultimately mean higher phone bills.

But AT&T spokeswoman Lennie Vesio said Pennsylvania telecom providers and regulators are at the forefront of bringing the competitive issues to light, and that has drawn national attention.

"The Pennsylvania commission recognized that if you have the largest provider of local phone service also acting as the wholesaler to competitors, there is a conflict of interest," Vesio said.

Pennsylvania regulators ordered Verizon split into wholesale and retail units in August 1999, but Verizon attacked the order in lawsuits and appeals. An administrative law judge has already recommended a plan for separation.

AT&T doesnt deny plans to push the issue nationally. Indeed, the company this month asked New Jersey utility regulators to consider structural separation of Verizon there. Legislation to split Verizons operations in Maryland was introduced in January, but has been withdrawn in favor of a study.

In BellSouths nine-state region, competitor Access Integrated Networks of Macon, Ga., has written to each states utility commissioners, complaining of anticompetitive practices by BellSouth. Rodney Page, vice president of marketing and strategic development at Access, said he believes structural separation of BellSouth and other regional Bells into wholesale and retail units is "ultimately in the cards."

"Its obvious that when you are in a position like we are, where your major supplier is also your major, major competitor, it is very difficult. This would at least level the playing field," Page said.

Meanwhile, Pennsylvania consumers continue to hear the soothing tones of actor James Earl Jones warning that splitting Verizon would mean phone bills $5 to $7 per month higher per line, and 7,600 lost jobs.