AT&T backs Verizon breakup

NThe Bergen Record
Wednesday, May 16, 2001

AT&T laid out its argument to state regulators Tuesday why Verizon New Jersey should be broken into two companies.

In testimony filed with the Board of Public Utilities, AT&T argued that failing to split Verizon will hurt New Jersey consumers.

“The time has come to realize that no competition is going to occur without making sure that we have a level playing field,” said AT&T attorney Frederick Pappalardo.

The filing is the latest in a prolonged battle between Verizon, which supplies the majority of the state’s residents and small businesses with local phone service and owns the copper wires, and companies like AT&T and WorldCom that want to enter New Jersey’s local phone market and must lease the copper wires from Verizon.

The competing companies say Verizon’s position as both wholesale provider to rivals and retail provider will create conflicts and lead Verizon to favor itself over its rivals when it receives and processes orders for local service.

Splitting Verizon into wholesale and retail companies, referred to as “structural separation,” would solve the problem, AT&T said.

“Based on Verizon’s continuing failure to open its monopoly markets to competition, the only way that the board can set the stage for meaningful telecommunications competition is to order Verizon to structurally separate,” said Michael J. Morrissey, AT&T’s vice president of law and government affairs.

Verizon New Jersey President Dennis Bone called the proposal “a costly, confusing, and unnecessary scheme that only serves AT&T’s goal of thwarting full competition for all phone services.”

Bone said “robust safeguards already exist under the Telecommunications Act of 1996 that assure Verizon treats competitors fairly.”

In several related moves, Massachusetts authorities said this week that Verizon hasn’t adequately fostered competition there and should not be allowed to enter that state’s long-distance market, a reward that federal law grants to Verizon once it opens its local markets. Verizon also asked New York regulators Tuesday for a $1.25 increase, or about 3 percent on the average monthly bill for residential telephone service. New York is the first state where Verizon received permission to enter the long-distance market and the company says the rate increase would be the first in 10 years.