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Want to know why SBC is fighting so hard against our fiber-to-the-home???
Of course, you knew it was MONEY, but here's an explanation from the Illinois President of SBC, speaking in McHenry County.

!!!Text in blue is our commentary and was not part of the original article!!!

Hightman seeks support for revised network access rules
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 on...

"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 this year.

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 distance field.

"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 rates.

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 in Illinois.

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 load.

"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.

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