New Rules for Phone Industry in the State

The Tulsa World - October 21, 1999

With an eye toward increased competition and customer choice, the Oklahoma Corporation Commission on Wednesday voted 3-0 to change how it regulates the telephone industry in the state. 

The commission is junking regulation based upon how much a company earns and replacing it with regulation based on prices charged for services. 

Bob Anthony, commission chairman, said the new system is an effort to give Oklahomans what they want -- customer choice and competition instead of a monopoly. 

Under rules adopted Wednesday, Southwestern Bell's charges for basic local services will be capped for five years. Future increases also will be limited and linked to the level of competition that exists. 

Terry Bailey, president of Southwestern Bell-Oklahoma, said the commission has passed a workable alternative regulation plan.

"Obviously, Southwestern Bell did not prevail on every issue, but we believe it is an acceptable rule," Bailey said. "This rule protects consumers by maintaining commission approval of prices and capping basic local residential telephone service rates for five years," Bailey said. 

"We look forward to working with the commission, consumers, our colleagues in the telecommunications industry and others to complete the process and finalize a transition plan by Dec. 1 to allow Southwestern Bell to opt into the alternative regulation rule." 

AT&T Corp. spokesman Kerry Hibbs, who said he had not seen the alternative regulation plan, said the commission should be commended for soliciting comments from all parties. 

"At this point, it looks very encouraging," Hibbs said. 

Commissioner Denise Bode said the package gives Oklahomans "a tremendous birthday present going into the next millennium."

"Oklahoma is the first state that has done this at the agency level and done it right," Bode said, adding that the process would move the state "into a competitive environment with the right checks and balances to make sure Oklahomans are better off as a result of the change." 

The alternative regulation plan is designed to foster competition in the telecommunications industry, allowing market forces to determine prices in the future. 

Approval came after weeks of long meetings between commission staff, the attorney general's office, consumer groups and representatives of Bell and other telecommunications companies. 

Although there may be differences between the parties on some points, Commissioner Ed Apple said it was time to arrive at a decision. He said the commission will need to be vigilant as regulation of the telecommunications industry evolves. 

"If we keep our eyes open and keep our minds open, I don't think anyone is going to be disserviced," he said. 

He compared the rule-making process to a space launch. "We are going to have to launch this rocket and if there are any problems, we'll tweak it on its way." 

Corporation Commission officials are hopeful that the new system will allow Bell and others to accomplish economies that will keep rates low. 

The rules will take effect upon the signature of Gov. Frank Keating and face legislative review next year. 

A second transition plan will be considered by the commission in the next several weeks. 

That plan will include incentives to bring competition into the market and requires infrastructure development, especially in those areas not likely to engender competition on their own behalf. "It is obvious this  change to competition does not work without active, aggressive competitors which is why the transition plan is weighted toward incentives to form competition," Anthony said. 

The commission hopes to complete the second phase by the end of November, with a hearing and vote set for Dec. 1. 

© 1999 The Tulsa World

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