Starting Jan. 5, Bell Atlantic will sell long-distance service to homes "from Buffalo to the Bronx," chairman Ivan Seidenberg said, after receiving landmark approval to re-enter the forbidden business.
"We will hit this market in a big way," he said.
On Wednesday, Bell Atlantic won federal permission to return to the long-distance market in New York. The company demonstrated that it has opened its network to competitors, the Federal Communications Commission ruled.
The Consumer Federation of America hailed the decision as a step toward more choice in telecommunications.
"We think there's a structure here that will support competition," said Mark Cooper, director of telecommunications for the Washington, D.C.-based consumer group. "They (regulators) have to be vigilant that there's no backsliding."
But critics charged that the company is using its control of the local phone network to restrict competition, while rivals said the development justifies mega-mergers in the industry.
Bell Atlantic plans a "no-surprises" service with no monthly fees, president James G. Cullen said. The service will compete with average long-distance costs of 15 cents a minute, he said.
"There are lots of plans in the market . . . (but) all of them have strings attached." Bell Atlantic will spell out the price, plus details of a local-with-long-distance service package, on Jan. 4.
The company's move adds a big competitor to a growing list of "all-distance" service providers. The three long-distance majors -- MCI, Sprint and AT&T -- have rolled out local phone service for the New York market in recent weeks.
Bell Atlantic will be able to springboard from its position as the state's dominant local service. Its 13 million local access lines are about 89 percent of New York's total.
The FCC action marks the first time a Baby Bell has been allowed back into the long-distance market since the Bell System breakup in 1983. Under the Telecommunications Act of 1996, Bells can return to the long-distance market after allowing competitors to connect freely into their local phone network.
Bell Atlantic met a 14-point test for openness, Seidenberg said. The company shares its network with 74 competitors in New York who provide more than 1.5 million business and residential lines. But some critics say the company continues to wield monopoly power from its dominant hold on the local loop.
"It is obvious that . . . Bell Atlantic's Internet company is selling service below cost," said Bruce Kushnick, executive director of New Networks Institute in New York. Competing services also have difficulty getting access to Bell Atlantic lines, he said.
The U.S. Justice Department was also critical of Bell Atlantic's dealings with competitors and argued against its petition.
Seidenberg referred questions about competition back to the FCC decision, saying the agency's approval "speaks for itself."
Telecom giants said allowing Baby Bells into direct competition with long-distance providers is spurring the industry's merger wave.
The FCC decision "highlights one of the main reasons for the pending Sprint-MCI Worldcom merger," Sprint general counsel J. Richard Devlin said. Their large customer base gives the Baby Bells an advantage that their rivals can match only by combining forces, he said.
Bell Atlantic hopes to capture 25 percent to 30 percent of New York's long-distance market within five years, and doesn't expect to make a profit on the service for at least two years, officials said.
Petitions to sell long-distance service in other parts of its 13-state region are pending. Initially, the company will use Sprint's long-distance information pipes, Seidenberg said. Eventually it hopes to use GTE Corp.'s facilities to complete long-distance calls, following its proposed merger with GTE.
AT&T all but promised to appeal the FCC's decision in court, claiming the commission ignored evidence that Bell Atlantic gives its own orders priority over competitors.
"Today's decision shortchanges the people of New York because it does not ensure that Bell Atlantic's local phone markets are truly open to competition," said Jim Cicconi, AT&T's chief legal counsel.