The Association of U S West Retirees



Bells May Merge Local Operations, Long Distance
The Wall Street Journal
Tuesday, September 4,  2007

WASHINGTON -- The Federal Communications Commission told the three remaining Baby Bell companies that they can bring their long-distance arms in-house, ending a requirement to operate these units as separate businesses.

The agency said the new rules would allow the three dominant wired phone companies, AT&T Inc., Qwest Communications International Inc. and Verizon Communications Inc., to merge their long-distance businesses with their main operations.

The move lets the companies cut duplication of marketing, customer-service and other operating costs.  The companies' request to merge the long-distance operations wasn't considered controversial because customers are increasingly using their wireless phones to make long-distance calls.

The requirement dates from the time when it was much more common for residential customers to buy separate long-distance packages on top of their local service.  It was meant to prevent local phone companies from keeping other long-distance providers out of a particular market with their own offering.

Companies were required to either operate the long-distance units as separate legal companies, or subject themselves to price regulation.  All three opted for the former choice.