State Senator VINCENT J. FUMO 1st Senatorial District Democratic Appropriations Committee Chairman Room 545 Main Capitol, Harrisburg PA 17120 Internet Website: www.fumo.com

FUMO APPLAUDS COURT DECISION ON TELEPHONE COMPETITION

    HARRISBURG, October 24, 2000 – State Senator Vincent Fumo (D-Philadelphia) hailed today’s decision by Commonwealth Court upholding the Public Utility Commission’s plan to create local telephone competition, including the break-up of the former Bell Atlantic Corporation, now known as Verizon.

     In a comprehensive, 141-page unanimous decision, the court rejected Verizon’s appeal to the PUC’s Order of August 1999, which was designed to open up local telephone markets to potential competitors of Verizon. Among other provisions in the order, the PUC directed Verizon to structurally separate its company into wholesale and retail divisions.

     "The Court’s reasoned decision dealt Verizon’s appellate strategy a fatal blow," Fumo said.

     "Although we are confident we would prevail on any appeal, we hope Verizon will stop litigating this case and work with us to bring about genuine local phone competition. The real goal is to provide Pennsylvanians with the best possible telecommunications service as we move into the 21st century, and I remain ready to cooperate with Verizon in that mission," he added.

     Fumo, along with Republicans Roger A. Madigan of Towanda and Mary Jo White of Venango County were parties to the lengthy litigation that also included various telecommunications companies, consumer groups, and others. The three senators argued that the PUC had to take decisive action to end the former Bell Atlantic’s virtual monopoly hold on local telephone service. Free-market telecommunications competition was a primary goal of a 1993 law passed by the General Assembly.

     The Senators believe Verizon has not lived up to promises it made under that law.

     "For two years, Verizon has told the public that competition for local phone service exists in Pennsylvania, and that the PUC’s order was unsupported by both fact and law," Fumo said. "Today Verizon was proven wrong – the Court’s unanimous ruling demonstrates that the Commission was correct and justified in directing the structural separation of the company."

     The PUC also required that the telephone network infrastructure – essentially the wiring into homes and business – be accessible to all telephone companies at rates that make it financially feasible for them to compete.

     Fumo said that as society moved into a new telecommunications era, one in which a wide variety of services from shopping to cable TV to Internet connections will be available over the same network, local competition is essential.

     "The PUC’s order provides a road map to ensure that all consumers, including not only residential users but also businesses and rural areas, have access to the best telecommunications technology at the best possible price," he said.

     Without structural separation, Fumo explained, the company that controlled the physical network would have unfair advantages over potential competitors. For example, it could delay repair service or connection service to customers who have switched to another telephone company. In such cases, the customers usually become angry with their new company, not with the company that controls the network.

     Earlier this year, the FCC fined Bell Atlantic in New York state for problems that arose when customers tried to switch companies.

     "Over two years ago, I along with Senators Madigan and White, began working toward a regulatory system that would encourage the development of local phone service competition in a manner that would deliver real benefits to residential and rural customers throughout the Commonwealth. Today our efforts have been vindicated," Fumo said.