Baby Bells Win a Long-Distance Round

April 29, 1995|From Bloomberg Business News

WASHINGTON — The seven regional Bell telephone companies won approval Friday to offer long-distance voice and data services to wireless customers.

The decision marks the first time U.S. District Judge Harold Greene has given the Baby Bells such broad ability to offer long-distance services, even though it is limited to wireless services and comes with strict conditions.

The decision could thus be an important step for the Bells in their quest to enter the $70-billion long-distance market. It also signals that Greene is easing his narrow view of the 1982 consent decree that broke up AT&T. Greene denied a similar request by the Bells to get into the wireless long-distance market in 1987.

"He has certainly taken a positive step in the direction of being more willing to let cable, long-distance and local phone companies compete against one another," said Jim Rill, a partner at Collier, Shannon & Rill and former head of the Justice Department's antitrust division.

Some of the Baby Bells immediately applauded Greene's ruling.

"This ruling is a significant victory for our wireless business, and it paves the way for us to offer long-distance services to other customers in the future," said Jim Young, vice president and general counsel for Bell Atlantic Corp., the Philadelphia-based Baby Bell.

However, some criticized the strings Greene attached.

"It's a baby step with a lot of conditions," said Jim Gerace, spokesman at Nynex Mobile, the wireless arm of Nynex Corp.

AT&T Corp., the nation's largest long-distance company, said it is studying the ruling. In the past, AT&T has opposed the waiver.

Greene said he approved the waiver because it will foster competition in the cellular long-distance market and bring lower prices and better service to consumers.

His ruling won't let the Baby Bells immediately offer wireless long-distance services. He set a number of stiff conditions that will at least initially limit the Bells' entry into long-distance.

The judge said the conditions are needed to ensure that the Bells don't use their position as monopoly local phone companies to lock out their new long-distance competitors.

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