Saturday, July 28, 2007


Jul. 28, 2007 (McClatchy-Tribune Regional News delivered by Newstex) --
The Federal Communications Commission could decide in the coming weeks whether Verizon's (NYSE:VZ) competitiors in Pittsburgh and five other cities have built enough muscle for the government to exempt the telecommunications giant from sharing access to its network at capped rates.

Verizon Communications Corp. -- as the dominant phone carrier in Pittsburgh as well as in Boston, New York, Philadelphia, Virginia Beach, Va., and Providence, R.I. -- asked the FCC to drop a legal requirement that it lease parts of its system at set costs to other phone companies in the same regions.

Those other, and mostly much smaller competitors are worried that Verizon will shut them off from its 'unbundled' network elements, or raise rates so high that they would be forced to pull up stakes in the six markets.

'There are pieces of the Verizon network that we need to use, and if they become more expensive, then our costs of doing business go up,' said Gregory M. Kennan, vice president of regulatory affairs for One Communications Corp., of Lincoln, R.I., which serves the Pittsburgh region.

One Communications installed switches and a network that carries multiple signals through Pittsburgh and its other markets, Kennan said Friday.

Still, it needs access to Verizon's service 'loops' -- the wires that run from its nondescript, windowless buildings to the customers' premises. One Communications, for example, couldn't afford to build lines to a small business that pays a couple hundred dollars a month for service, he said.

New York-based Verizon, in its petition filed almost a year ago with the FCC, argues the company has lost an undisclosed number of residential and business customer lines in the Pittsburgh region since 2000.

Comcast Corp.'s phone service via its cable network, plus wire line and wireless phone carriers add up to a robust market, Verizon said.

'There's a significant amount of competition today that doesn't rely on Verizon's networks at all,' spokeswoman Sharon Shaffer said yesterday. 'Even for those that do, if Verizon's petitions are granted carriers that currently rely on unbundled network elements can continue to serve their customers using comparable, market-based products from Verizon.'

Verizon cites an FCC decision that granted Qwest Corp. forbearance in the Omaha, Neb., area, though One Communications and other opponents of the current petitions point out that competitor McLeodUSA Inc. (NASDAQ:MUSA) is considering leaving that area.

Verizon's competitors and consumer organizations such as the National Association of State Utility Consumer Advocates are battling the company's move in all six cities. An FCC decision could come in early September, to meet the standard one-year deadline, but more likely the commission will grant itself a three-month extension, Kennan said.

Regarding Philadelphia and Pittsburgh, 'Our analysis suggests that this is premature, and that there is not adequate competition' for forbearance, said Sonny Popowsky, Pennsylvania's consumer advocate.

Downtown-based Full Service Network has diversified to broadband phone service, largely because Verizon 'has been complaining and trying to drive out the little guy for as long as I can remember,' spokesman Devon Jurgensen said.

Full Service started selling phone-over-the-Internet service last fall, and recently reached 4,000 customers. There are many more traditional phone customers, Jurgensen said, but the company has made alternate arrangements when it can, such as leasing the One Communications network.

Newstex ID: KRTB-0288-18486750


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