Ran in the Northwest Herald on Thu, Feb
27, 2003, © The Northwest Herald
By MICHAEL GIBBS
The Northwest Herald
LAKEWOOD – SBC Illinois' president called Wednesday on McHenry
County, looking for support for the regional telephone company's
campaign to charge competitors more to use its network.
Speaking at a Crystal Lake Chamber of Commerce luncheon, Carrie
Hightman also said SBC Illinois' parent company, San Antonio-based
SBC Communications Inc., is pressing forward in its quest for approval
to offer long distance service in Illinois.
SBC provides local phone service in most of McHenry County and
employs 66 technicians at a construction, installation and repair
garage in McHenry.
"The 1996 Telecommunications Act originally was adopted as
a short-term effort to help small companies lease the network while
they got their competitive sea legs," Hightman said. "But
what's happened is large companies have leased it all, without limit.
This is true, and I can understand why SBC
doesn't want to have to pay for new infrastructure by itself and
then be forced to let these other big phone companies jump in and
use it without having to pay for any of the construction. But read
"The two companies that (use) 94 percent of this wholesale
service are AT&T and WorldCom (whose long distance unit operates
as MCI). Neither is a newcomer.
"In Illinois, our wholesale price is about $12.38 per line.
It is twice that amount in Massachusetts. This situation causes
us to lose about $15 on every line we lease (in Illinois)."
You have to read this only one way... they
want to raise their basic price per line by $15!
Hightman said SBC was disappointed in the Federal Communications
Commission's recent ruling on wholesale pricing for the lines.
"Although the final order has not been released, (the) FCC
has made statements that indicate its regulations on certain key
telecom issues will not change," she said.
"This was not good news for SBC on the issue of wholesale
pricing. And, it wasn't good for consumers because it means the
FCC failed to acknowledge there is a new world of competition in
communications. Yes, there certainly is.
"Instead, the FCC by its actions will continue us operating
in an outmoded environment." Hightman said SBC is hoping to
gain state regulatory approval to enter the long distance market
She said the Illinois Commerce Commission has scheduled a hearing
for April 29 in which it will hear arguments from SBC that it has
opened its network to competitors.
The ICC has made SBC's willingness to open its network to competitors
a condition for its recommending the FCC approve the company's long
distance bid. The ICC can make its final decision any time after
the April 29 hearing.
Competitors, including Basking Ridge, N.J.-based AT&T Corp.
and Clinton, Miss.-based WorldCom Inc.'s MCI serve 28 percent of
the local phone market, Hightman said. As a result, she said SBC
leaders think the ICC should rule it has opened its network to competitors.
I know, this is boring, but read on and
find out where SBC hopes to make its money...
"If we receive (the ICC's) nod of approval, we will file our
request (to offer long distance service) with the FCC, who must
act within 90 days," Hightman said.
"Given the recent price increases announced by MCI and AT&T,
Illinois consumers would benefit by more competition in the long
"Several businesses in McHenry County have provided support
(for) SBC's long distance efforts, which, when realized, will save
Illinois consumers and businesses between $129 million and $457
million in the first year alone." How
did she come up with that figure??? Oh, it's because SBC will charge
the other companies so much more to use their infrastructure, that
the other companies will have to raise rates to stay in business.
So SBC can take over the long distance market by charging lower
rates than its competitors. This won't actually save Illinois consumers
any money, you'll still pay about the same or even more for long
distance than you do now, but you'll have the choice NOT to pay
MCI and AT&T the higher prices they'll be forced to charge.
Mike Pruyn, public relations director for New York-based AT&T,
confirmed rates for several of the company's long distance packages
will rise as of Saturday.
WorldCom officials could not be reached for comment on the company's
Competition from local phone companies, along with customers dropping
land lines in favor or wireless services and World Wide Web communication,
is hurting SBC's bottom line. Read that
again... "Competition from local phone companies... is hurting
SBC's bottom line." So, what to do??? Squash the competition!
Oh, and there's another way to make more money... keep reading.
Though the company earned $2.35 billion during the fourth quarter
that ended in December 2002, revenues were off about 6 percent.
Meanwhile, SBC said 4 percent of its customers disconnected their
phone lines last year.
SBC last year cut about 600 Illinois and Northwest Indiana employees,
including nine at its McHenry garage. The company, which trimmed
its nationwide work force by 11,000 in 2002, employs nearly 21,300
The loss of jobs, Hightman said, highlights the importance of
SBC being allowed to charge its competitors higher wholesale rates,
and its need to offer long distance service.
"Many (SBC employees) live and work in McHenry County,"
she said. "Our employees are a significant part of this community.
"Telecom suppliers have been engines of growth and new jobs.
But as companies like ours have been forced to reduce our capital
expenditures, these suppliers have suffered, with consequences for
their workers and our nation's future technology." I
hate to see anyone lose his or her job, but do you really think
SBC cares about their suppliers suffering?
SBC's ability to service its customers will not be hindered by
its recent job cuts, Hightman stressed.
"It does not affect service. It will not affect service,"
she said. "We determine our work force by our expected work
"Aside from all the other pressures we face, regulatory and
from our competition, we also are suffering from a weak economy,
like everybody else. That translates into fewer customers buying
additional features. Less activity, coupled with the competition
we are facing, has caused us to have less work. We are sized appropriately."
Hightman said there are no plans to close the McHenry garage.
She said a bright spot in the FCC's review concerned broadband
Internet and other so-called advanced services. A
bright spot! SBC can make money in the broadband Internet market.
Sixty percent of SBC's McHenry County customers have direct subscriber
lines, or DSL service, available to them.
Hightman said cable companies serve the majority of the high-speed
Internet market. She said the FCC's order could allow SBC to better
compete for the high-speed Internet user.
"Broadband parity is important for areas like McHenry County
because it would improve the prospect of investment in communities
that can't currently have DSL," she said. "Businesses
and residents need access to high-speed service in order to compete.
We understand that. We certainly do need
access to high-speed service! Does this mean that SBC is going to
be building new Central Office Switches in remote locations so those
communities can have DSL? Remember, SBC is a phone company, so the
only broadband they can offer is DSL or T1. Or maybe they are planning
to get into wireless. NONE of those options are as robust and affordable
as FIBER OPTIC.
"Parity would promote lower costs and more choices. Parity
would spur technological growth and innovations, and increase jobs
throughout the state. We look forward to seeing the FCC's written
order, and to its implementation." Parity,
unfortunately, is going to give SBC the opportunity to charge all
of their competition much higher prices. So you can pay higher prices,
or go with SBC. Those are your choices. Or you could vote YES for
broadband and get fiber-to-the-home for top-quality, top speed,
lower cost telephone, television and Internet. And that's exactly
what SBC is afraid of.