MIDWEST SBC seeks approval to expand services

SBC wants to offer $50 unlimited calling packages.
CHICAGO TRIBUNE
Wounded by a stampede of fleeing customers, SBC Communications launched an aggressive bid to offer long-distance service throughout the Midwest.
SBC asked the Federal Communications Commission on Thursday to sell long-distance services in Illinois, Wisconsin, Indiana and Ohio. It already has a bid pending for Michigan.
If the FCC grants permission, SBC could offer unlimited calling packages for about $50 a month as soon as the fall or winter. Such popular packages -- pushed by rivals such as MCI and AT & amp;T -- have helped competitors steal millions of SBC's Midwest customers in the past two years.
The five states that SBC took over when it bought Ameritech in 1999 are the last holdout where the local phone service provider is still banned from offering long distance.
Verizon Communications Inc., the dominant phone carrier along the East Coast, offers long-distance service to its customers for about $60 a month. And even SBC offers long-distance packages to customers in California for about $50.
For SBC's Midwestern states, the lack of long-distance service is a huge competitive dilemma -- the company has lost far more customers than its peers.
Customer losses
SBC has lost 18 percent of its customers in its 13-state home territory over the last several years, according to a survey released this week by TNS Telecoms, a market research firm in Jenkintown, Pa. By comparison, Verizon lost only 12 percent and BellSouth Corp. just 10 percent.
SBC tried unsuccessfully to counter the vast customer migration by raising the wholesale rates it charges rivals to lease its network. It recently backed a law doubling those rates that Illinois lawmakers passed in May but was shot down in June by a federal court judge who said it violated federal law.
A 1996 federal law mandates that one-time Bell monopolies must open their local phone networks to competition. In return, the law grants the Bells entry into long distance.
But just losing customers isn't sufficient evidence that a former monopoly has opened its networks to competitors -- even though SBC President William Daley believes the vast losses are proof enough.
FCC rules require a Bell company provide top-notch service to rivals. SBC has often stumbled to meet the required service standards.
Earlier this month it paid $711,440 in penalties to the FCC for wholesale service shortcomings in the Midwest, bringing its total federal penalty payments to $82.7 million since it bought Ameritech.