Posted on 07/21/2002 11:00:24 PM PDT by HAL9000
FCC should limit WorldCom effects-US telecom group
WASHINGTON, July 21 (Reuters) - The Federal Communications Commission should take steps to ensure that WorldCom Inc., on the verge of entering bankruptcy protection, does not inflict financial harm on other carriers, the trade group representing big local telephone companies said on Sunday.
The United States Telecom Association said its members, which include Verizon Communications and BellSouth Corp., would continue to provide services like connecting calls initiated on the WorldCom network but that they should not have to absorb huge costs so it can continue operating.
"The FCC should take affirmative steps to ensure that WorldCom's impending bankruptcy does not undermine the financial stability of other carriers that provide services to it, and that such supplying carriers have adequate assurances that they will be paid for those services," USTA President Walter McCormick said in a letter to FCC Chairman Michael Powell.
WorldCom, the No. 2 U.S. long-distance telephone company and the biggest carrier of Internet traffic, could file for protection from its creditors as early as Sunday, buckling under a $3.85 billion accounting scandal.
The telecommunications industry has been crushed by a soft economy, overcapacity, stiff competition and now accounting scandals, forcing scores of smaller providers and a handful of big ones to seek bankruptcy protection or cease operations.
WorldCom officials and Powell have said they do not expect any imminent disruptions in service for the company's 22 million U.S. telephone clients and tens of thousands of business customers.
USTA urged the FCC to allow carriers that connect calls from those companies in financial distress to collect deposits or demand advance payments for services.
Additionally, the trade association asked for permission for its members to recover large debts owed by WorldCom by passing on those costs to customers. It also encouraged the FCC to make clear that the telecommunications laws do not supersede the bankruptcy code.
"To ensure a smooth transition, the FCC should clarify when a carrier is required to provide notice to its customers of possible impairments of service," McCormick said.
An FCC spokesman had no immediate comment on the USTA letter.
WorldCom and AT&T Corp. have been pitted in a battle with dominant local telephone companies, known as the Baby Bells, since the passage of the 1996 Telecommunication Act. The Bells must prove that their local networks are open to competition before they can enter the lucrative long-distance networks.
Both WorldCom and AT&T have launched local service in numerous communities while the four Bell companies have won approval to offer long-distance services in 15 states.
Since the Bell monopolies are largely responsible for this whole mess, I think they should just eat the WorldCom debt rather than passing in on to ratepayers.
SBC can sell off their investments in Africa, which will easily cover their WorldCom costs.
They'll have you pay by hook or by crook. (In their world, they'll have you pay by hook and by crook.)
The bottom line is as George Will has said. Some companies operate under the premise of "public expense, private profit."
That is the case with public utilities and others similar to them, such as the bells.
Krupp steel works had such a deal going in 1930's/1940's Germany. It was part of their economic system.
Yeah, I think the Bell companies took lessons from them. Instead of Big Bertha, they've got an FCC-supported monopoly.
Why not? That was a large factor.
The Bells have committed repeated violations of the antitrust laws, the 1996 Telecommunications Act, and other violations (e.g. SBC's repeated violations of the Ameritech acquisition consent decree.) They figured out how to drive competition out of the market by violating the law and paying a relatively small fine, rather than complying. It was good for the Bells, but disastrous for the tech sector, the stock market and the rest of the country.
When the Bells violate those laws, instead of slapping them on the wrist, they should be whacked with a tobacco-lawsuit-size penalty, say $80 or $90 million. After a few of those, they might start complying with the law.
What freaking alternate reality do you live in. Last year SBC paid over $64,000,000 in fines because of Ameritech!
If must be freaking nice to have enough money like you to think that $64,000,000 is a "relatively small fine".
Get a clue!
I work for one he has personally bashed, and I know for a fact that we jump through hoops and spend gozillions of dollars 'opening up' our equipment for 'competitors' to interconnect to.
I wonder if Hal owned a business he had spent billions and billions of dollars investing in the infrastructure for, he's just be all too happy to practically give it away to competitors who will then come in and skim off only the most profitable customers, leaving him with only the most marginally profitable ones.
That amount was the accumulation of smaller fines for numerous separate violations over a period of years since the Ameritech acquisition. And the dollar amount of the fines is decreasing - not increasing - which is hardly a deterrent to future violations. $64 mil is a drop in the bucket compared to the benefits SBC receives from their strategy to to make competition impossible by violating the law.
SBC did agree to pay a $27 million fine a few weeks ago for their illegal practices in California - billing for products never ordered or received. But that is not enough to deter them from future violations if they figure it will profit them.
Yeah, they're number three on my list - after the Clintons and the Democrats.
Sure.
Riiiiigggggghhhhhhttttt.
Who the heck paid the "tobacco-lawsuit size penalt(ies)"? Hint: Not Phillip Morris. Not Reynolds. Not any of the tobacco companies. The poor smoker gets to pay it! Soo-prize! Soo-prize?
I haven't smoked in a lot of years. Therefore, ergo, viz, and QED, I didn't have to pay the tobacco-lawsuit size penalties.
But I'll have a problem getting along without a phone. So, by your premise, I'LL GET TO PAY THE DAMN "TOBACCO-LAWSUIT SIZE PENALTY".
Gee, thanks HAL.
I see that the stock analysts have downgraded SBC and BellSouth from "Buy" to "Neutral" this morning. Perhaps the shareholders are waking up to the fact that the Bells' strategy is backfiring.
Don't be absurd. I'm don't favor running the phone companies out of business, but if they don't cease their violations of the law, I would favor busting up the multistate holding companies into state units, and shifting regulatory powers from the feds to the states. That would make them more accountable to local customers
Hey Hal9000, can you get a broadband internet connection by using two tin cans and a string?
That's approximately what I've got with SBC. My Southwestern Bell phone line had so much static on it last week, I told people to call back on my cell phone so we could have a normal conversation. And I'm on a 28.8 kbps dial-up connection. Meanwhile, SBC is using ratepayers money to purchase and upgrade systems in Africa, Mexico, Canada and everywhere else except their local service territories in the U.S.
Parm me while I say "Barbara Streisand".
Ultimately, the customer pays. You (or I) will pay said fines, even while state or federal regulatory bodies assure you that they are holding the regulated industry to 7 or 8 percent profit and that "fines will come out of profits".
The Baby Bells aren't in the bidness of printing money.
I'm certainly enjoying paying the Gore tax to wire all rural schools (that wasn't supposed to be paid by the consumer, either) and the Spanish-American war tax. Bye-the-bye, did we win that war?
Are you alleging that the Bells are violating the law by illegally passing the costs of fines on to the customers without regulatory approval? If so, it should be investigated.
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