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Verizon to pay $2.7-million settlement

At issue were allegations the former GTE was blocking its competitors from gaining access to its markets.

By MICHAEL BRAGA

© St. Petersburg Times, published August 2, 2000


TAMPA -- Verizon Communications will pay $2.7-million to end an investigation alleging that GTE Corp. tried to impede local telephone competition in the Tampa Bay area and in seven other states.

The investigation was launched last year by the Federal Communication Commission after three competitors of GTE, which merged with Bell Atlantic this year and became Verizon, complained that the former telecommunications monopoly was blocking access to its markets. The competitors said GTE denied their requests to connect telephone equipment to GTE's switching stations -- central facilities that route phone calls from one location to another.

Covad Communications, Sprint Corp. and NorthPoint Communications told the FCC that 51 of their requests to hook telephone equipment to GTE's switching equipment were denied by the former monopoly in 1999. Of those denials, 23 were issued in the Tampa Bay area.

"GTE came up with all kinds of excuses to keep our equipment out of their central offices," said Jason Oxman, Covad's Washington-based attorney."They interfered with our ability to serve our customers, and they have suffered the consequences."

In Tampa, Verizon spokesman Bob Elek said his company had no desire to be anti-competitive. The companies making the requests "just didn't give us enough time to get ready," he said. Elek added that it takes a lot of time to prepare procedures for the billing and provision of new customers.

Suzanne Tetreault, the FCC deputy chief of enforcement, said her organization had considered the complaints by competitors serious enough to pursue an investigation against GTE.

The Telecommunications Act of 1996 requires telephone companies such as GTE that formerly operated as monopolies to allow other phone companies to connect equipment to their switching stations and compete in their markets. At first, any phone company desiring to connect equipment to switching stations had to rent a 10- by 10-foot space and cage it off from equipment belonging to the former monopoly.

In March 1999, however, the FCC ruled that competitor phone companies no longer had to rent caged space if they didn't want to. And if the former monopoly still denied them access to their switching stations -- saying they didn't have any space at all -- representatives of the competitor phone companies had the right to enter the former monopoly's facilities to see if the former monopoly was telling the truth.

Elek said the new rules took some getting used to. "Suddenly our competitors were allowed to walk anywhere they wanted in our facilities," he said. "Security was the biggest issue. We needed policies in place to determine what they should and shouldn't see."

Elek said that GTE's initial shock at having to share its space has passed, and competitors are no longer experiencing abnormal delays. As to his company's decision to pay the $2.7-million, Elek said that was not an admission of guilt.

"It's just an agreement to disagree," he said.

But Covad's Oxman challenged that notion.

"If they haven't done anything wrong, then why are they writing a check for $2.7-million?" he asked.

In a separate development, a federal court Tuesday upheld the decision allowing Verizon to offer long-distance service in New York state, fueling the re-emergence of local telephone companies in long-distance telephone markets.

Bell Atlantic got FCC permission in December to provide long-distance service in New York markets, the first so-called "Baby Bell" since the 1982 antitrust breakup of AT&T to get back into long-distance markets.

In its ruling on the long-distance case, a three-judge panel of the U.S. Court of Appeals unanimously rejected a complaint by long-distance giant AT&T challenging the FCC's decision to allow Bell Atlantic into the long-distance market.

Also Tuesday, the union representing more than 72,000 customer service workers for Verizon in 12 Northeastern states authorized its president to call a strike this weekend if a settlement isn't reached in contract talks.

Verizon workers from Maine to Virginia are negotiating for higher pay, better benefits and improved working conditions at the telecommunications giant's facilities. Union negotiators also are trying to organize Verizon's wireless workers. Verizon workers in Florida are not part of the threatened strike.

-- Information from Times wires was used in this story.

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