FCC Approves SBC Long Distance Service For California.

SBC Communications Inc. won approval from the Federal Communications Commission (FCC) to offer long distance service in California, clearing the way for millions of business and residential customers in the country’s largest long distance market to enjoy the benefits of full telecommunications competition.

The ruling comes three months after a five-year, comprehensive review by the California Public Utilities Commission (CPUC), which found that SBC had demonstrated that competitors had “fair, nondiscriminatory, and open access” to its local network. The company said it hopes to enter the state’s $10 billion long distance voice and data communications market on the effective date specified in the ruling. At that time, it will unveil its new product and service offerings.

“The real winners today are California consumers and businesses,” said William Daley, president, SBC. “True competition will deliver better values, more innovation in products and services, greater convenience in shopping for and buying telecommunications services, and a new, reliable choice in the market.”

With today’s ruling, the SBC family of companies will soon be able to offer a full bundle of telecommunications services to customers in seven of the 13 states in which it operates. The company already offers long distance in Texas, Oklahoma, Missouri, Kansas, Arkansas and Connecticut. As of the third quarter this year, it served 5.9 million long distance lines in those states, up 28 percent from a year earlier.

On December 12, the CPUC released a Proposed Decision resolving all of the remaining section 709.2 state law issues. SBC expects a decision to be adopted by the CPUC on the effective date of the FCC ruling resolving all possible conflicts.

Strategic Implications for SBC

Entering the California market has significant strategic implications for SBC. Of the former Bell operating companies, SBC has the largest long distance revenue upside, with a more than $31 billion market opportunity across its regions, which represents more than 40 percent of the entire U.S. long distance market. With entry into California, the company now can offer long distance service to approximately two-thirds of its 58 million access lines, up from about 30 percent today. Long distance entry also enables SBC to expand its focus on international calling. Across the company’s regions, international voice calling by consumers alone represents a $3 billion opportunity, with California and Texas leading the nation in international call
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