RESEARCH TRIANGLE PARK – Anyone who believed that the fight would be over between BellSouth and rival phone companies once the Federal Communications Commission granted the Baby Bell approval to sell long distance was wrong.

Dead wrong.

WorldCom, one of BellSouth’s biggest rivals, says it has no intention of surrendering in the long-distance fight, will continue to push its combined local and long distance plan, and insists its rival needs to do more to promote competition.

And Access Integrated Networks, a so-called competitive local exchange carrier, argues that BellSouth wants to destroy competition.

For its part, BellSouth insists that the company has done enough to open its network to competitors as required by telecommunications deregulation.

James Lewis, senior vice president for law and public policy at MCI, came out firing last week once BellSouth announced it would indeed sell long distance in North Carolina and several other states. The Baby Bell already was signing up people in Georgia and Louisiana.

“The fragile local competition that exists today will not flourish if regulators do not preserve the availability of the Unbundled Network Element (UNE-P) platform and push wholesale network rates to cost so that the promise of the federal Telecommunications Act of 1996 can be realized,” Lewis said. In other words, MCI still wants access to BellSouth’s network so it can resell local services.

Access Integrated Networks, which is based in Macon, GA and services the Carolinas, Georgia and other Southeast states, says BellSouth is lobbying the FCC to undo parts of the deregulation act that allows CLECs to lease portion of the BellSouth network. AIN says the other regional Bells have joined the effort.

According to the August UNE-P Fact Report by the PACE (Promoting Active Competition Everywhere) Coalition, “although the [Bell companies] delayed offering UNE-P for a number of years, once introduced, it demonstrated a powerful ability to bring competitive benefits broadly to the mass market…. UNE-P is particularly critical to competition in the core of the incumbent’s monopoly, the typical residential and small business customer that remains interested in analog service for its basic communications needs.”

And the Competititve Enterprise Institute recently reported on Covad Communications won a round in federal court in Atlanta where its suit about access to BellSouth facilities. The court ruled that Covad could pursue an antitrust suit irregardless of the telecom deregulation act.

Here’s part of what CEI reported:

“Covad, a DSL provider, sued BellSouth when it encountered difficulties in collocating at BellSouth’s switching offices and getting access to BellSouth’s copper loops to offer DSL service. Covad argued, among other things, that BellSouth’s own retail prices for DSL were too low compared to the wholesale prices it charged Covad for access to the loops, setting up a ‘price squeeze.’

“The court of appeals agreed with Covad that BellSouth’s loops might well be an ‘essential facility,’ as that term is used in the antitrust laws, to which competitors must be given access, and cited legislative history showing that Congress did not intend the 1996 Telecom Act to displace antitrust. (This case nearly conflicts with the 7th Circuit’s decision in Goldwasser v. Ameritech, but doesn’t quite – there, plaintiffs brought a Sherman Act claim based on violations of the Telecom Act, not independent of the Telecom Act.) So Covad’s suit will survive into the next round. And dozens of clones of the Covad complaint are likely.”

Defending BellSouth

But in Charlotte last Friday, Duane Ackerman, chairman and chief executive officer of BellSouth fired back.

Ackerman told The Charlotte Observer that his competitors needed to build their own networks and said that forcing BellSouth to lease facilities “disincents investment” by its rivals to build their own central offices, switches, fiber and networks. “That’s not good for the country,” Ackerman told The Observer’s Stan Choe.

As Choe noted, BellSouth still dominates local competition with more than 90 percent of the market. While CLECs are generally resigned to BellSouth offering long distance, they are up in arms about what they see as a new campaign to undo hard-won gains. In order to win state and federal approval to provide long distance, BellSouth and the other regional Bell operating companies had to demonstrate that they indeed had opened networks to competition.

No surrender

And some companies are fighting aggressively for more customers.

MCI, for example, says it has won more than 1 million customers for its recently unveiled “any distance” service called “Neighborhood” which combines local and long distance calling.

“MCI supports the entry of any company, including BellSouth, into the highly competititve long distance market,” Lewis said. “As a company born of competition, MCI understands that it only sharpens ourt ability to serve our customers. — The Neighborhood — is dramatic evidence of the benefits that competition brings consumers — lower rates, better service and innovation.”

Lewis also points out that BellSouth is buying services wholesale from other carriers in order to provide long distance while arguing it should be allowed to stop selling wholesale to CLECS and others.

“Ironically,” Lewis says, “BellSouth uses the wholesale services of other companies to provide its competitive long distance service but argues it is unfair to make it provide wholesale services to others so they can provide local services.”

Rick Smith is managing editor of Local Tech Wire.