FCC Paves Way for SBC Long Distance Offering

NEW YORK (07/03/2000) - U.S.-based telecommunications powerhouse SBC Communications Inc. is set to start offering long-distance service in Texas next month, after being given approval to do so Friday by the U.S. Federal Communications Commission. Long-distance services are key for the company to capitalize on its international holdings and customer demand for global data connectivity.

The FCC announced Friday that it had approved SBC's application to offer long-distance services in Texas. The approval clears the last roadblock for SBC to add long distance to its service in the state, since it has already won necessary approval to do so from the U.S. Department of Justice and the Texas Public Utility Commission.

SBC will offer long distance in Texas starting July 10, through its Southwestern Bell brand, the company said.

With a long-distance data offering, SBC -- which already has telecom investments in 22 countries -- can put an important piece in place as it gears up to become a global player.

Long distance rounds out SBC's product offerings and is the key to capitalizing on the company's single biggest growth opportunity -- data, according to a statement from SBC Chairman and Chief Executive Officer Edward Whitacre [cq] issued Friday.

The regulatory go-ahead gives SBC the opportunity to offer global data carrier services to Texas-based companies, according to company officials. By adding long distance services, SBC can now offer customers one-stop shopping for all their telecommunications needs, officials said.

The FCC approval is something of a watershed moment for SBC, created in 1984 as a Regional Bell Operating Company (RBOC) when the U.S.' Bell System was broken up by court order. The FCC has approved just one other RBOC application for long distance. Last year, the FCC approved Bell Atlantic Corp.'s application for long distance in New York and the carrier -- now known as Verizon Communications Inc. since it closed its merger with GTE Corp. last week -- is now offering long distances services in the state. The FCC has denied five other RBOC applications for long distance.

But SBC, more than Bell Atlantic, has gotten a reputation for taking a combative stance against federal limits on the types of services it could offer. After the Bell System breakup, the RBOCs were prohibited from providing wireline long distance service in their home states, until the Telecommunication Act of 1996. The Telecom Act included a provision that allowed RBOCs to offer long distance in their home territories, but only after they had shown that competitive local exchange carriers (CLECs) had the opportunity to offer competing services. In the wake of the Act, SBC tried to get the U.S. courts to declare that the Act's RBOC long-distance provision was illegal, but lost the case on appeal in 1999.

Before now, SBC has offered long distance services, but only through the relatively smaller, Connecticut-based Southern New England Telecommunications Corp. (SNET), which it acquired in 1998. SBC is now trying to get approval for long distance services in 11 other states in which it operates as an incumbent RBOC. SBC has grown in part by merger, including its recent acquisition of Ameritech Corp.

SBC plans to move into 30 of the top cities outside of its home states over the next 18 months, and offer long distance services in those cities, according to a company official. Since it is not an incumbent in those cities, it can offer long distance in the cities.

SBC, in San Antonio, can be reached at +1-210-821-4105, or at http://www.sbc.com/. The FCC is on the Web at http://www.fcc.gov/.

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