BellSouth fights for its rights 

Within minutes of President Clinton signing the Telecommunications Act of 1996, BellSouth's cellular subsidiary logged its first cellular long-distance call -- albeit between two company executives. "This is truly the dawn of a new day," Bell South Mobility President Odie Donald is quoted as saying in a news release issued on Feb. 8, 1996. Not to be outdone, John L. Clendenin, chairman and CEO of BellSouth Corp., had this to say: "The President's signature on this legislation unleashes a new era of competition in communications services.";;But less than two years later, BellSouth has asked the U.S. Court of Appeals in Washington, D.C., to declare unconstitutional portions of the very law its top executives had showered with praise. Such an about-face also seems abrupt noting that BellSouth political-action committees and individuals linked to the company lobbied heavily for the bill and contributed more than $700,000 to congressional campaigns in 1995-96, while the issue was the talk of Capitol Hill.;;In a lawsuit filed Jan. 13, the company calls for the appellate court to overturn a ruling by the Federal Communications Commission, which blocked BellSouth from selling long-distance service in South Carolina. In particular, BellSouth claims that the FCC failed to set criteria that would allow the company to bundle its long-distance service together with local service in the first of its Southeastern markets.;;But significantly, BellSouth -- a $19 billion dollar company with 28 million customers in 20 countries -- also asserts that the corporation-friendly telecom law discriminates against it, while favoring other companies vying for that long-distance market. ;;Amazingly, BellSouth now insists it wasn't ever totally sold on the 1996 law. "We don't think it's a contradiction at all," says company spokesman Bill McCloskey. "We saw the legislation as the quickest way into these areas. We felt it gave us a clear path into these businesses. Now it has become clear it is not a clear path to getting into the business.";;The FCC in the South Carolina case, and state commissions across the country, including the Florida Public Service Commission, have so far declined to grant BellSouth and the other regional Baby Bells permission to enter the long-distance markets. But in this era of deregulated telecommunications, competition is a relative term.;;Since passage of the telecommunications overhaul, the Baby Bells have signed agreements with long-distance companies agreeing to do business with each other. And there is competition -- at least for business customers. But in most markets, competition for residential customers remains a mirage -- and probably will for years to come.;;In bringing its federal lawsuit, BellSouth maintains it has met the "checklist" of guidelines required in the law. And in South Carolina, the company insists, the state's local phone market is open; it's just that no one else wants to get into it.;;In making this argument, and the claim of discrimination, BellSouth copies the arguments made successfully against the FCC by SBC Communications Corp. (formerly known as Southwestern Bell, BellSouth's sibling).;; On Dec. 31, a U.S. District Court judge in Texas ruled that the 1996 federal law discriminated against SBC and BellAtlantic (the northeast's regional Bell), taking the position that the companies deserve the same protections guaranteed to U.S. citizens under the Constitution.;;The U.S. Justice Department, AT&T and MCI Communications are appealing this Texas decision, which could give the Baby Bells the authority to set up shop wherever they wished, in defiance of the 1996 law they had once championed.

More by Lawrence Budd


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