Ameritech Moves to Offer Long-Distance

WASHINGTON — Moving to grab a share of the $70-billion long-distance market, Ameritech Corp. on Thursday became the first regional Bell telephone company to seek federal approval to offer long-distance service to its local customers in Michigan.

The Chicago-based carrier, which provides local phone service in Michigan and four other Midwestern states, filed its application with the Federal Communications Commission after reaching agreements with two dozen rivals that seek to offer local phone service in Ameritech’s market.

Ameritech said the phone agreements are evidence it has opened its market to competition and thus that it deserves to be allowed entry into the long-distance market.

The FCC, in consultation with the Justice Department, has 90 days to act on the request.

Ameritech’s filing comes less than two months after long-distance company AT&T; raised its basic long-distance rates 6%, the latest in a string of recent price hikes among long-distance carriers. Consumers had seen a 40% drop in the price of the average toll call in the last decade as giants such as AT&T;, MCI Communications, Sprint Corp. battled more than 500 smaller long-distance carriers.

On Thursday, Ameritech executives seized on those price hikes to bolster their case for entry into the long-distance market.

“The American people have called for choice,” Ameritech Chairman and Chief Executive Richard Notebaert said in a news conference Thursday. “Ameritech is stepping forward to make it happen.”

He added that the company, which serves Michigan, Illinois, Wisconsin, Ohio and Indiana, expects to file requests this year to offer long-distance service to the other areas.

Ameritech and the six other regional Bells can already offer long-distance service to customers outside their service area, and Ameritech has plans to offer such service in the more than 40 states where it does not provide local phone service.

In recent years, Ameritech has been buying cable TV franchises in hopes of becoming a one-stop shop for communications services.

Under the landmark telecommunications reform law enacted in February, Ameritech and the other Baby Bells are required to complete a 14-point checklist certifying that their local telephone markets are open to competition before they can offer long-distance to customers in their service areas.

Consumers groups and telephone industry rivals predicted Thursday that Ameritech would face an uphill battle in trying to gain FCC approval.

“There’s no doubt we have a cartel in long-distance business; but the only thing that’s worse than a cartel is a monopoly--which is what we have in the local phone market,” said Mark Cooper, Telecommunications Policy Director for the Consumer Federation of America, a Washington consumer advocacy group. “I fully expect to see a court case” opposing the Ameritech application.

“There are more than 5.5 million phone lines in Michigan, and Ameritech controls more than 99% of them,” said Jonathan B. Sallet, chief policy counsel of MCI, which is seeking to enter Ameritech’s local phone market.

AT&T; also complained Thursday that Ameritech had not satisfied FCC requirements.