May 4, 1995

Separate Statement
Commissioner Susan Ness

Re: NYNEX Telephone Companies' Petition for Waiver; Transition Plan to Preserve Universal Service in a Competitive Environment

Today, based on changing competitive conditions in New York City and Long Island, we grant NYNEX a limited waiver of interstate access charge rules. I wholeheartedly support this decision.

Our action today demonstrates our steadfast determination to promote local competition at every opportunity. The Commission has expended considerable time and energy in the effort to bring competition to the local delivery of multichannel video programming, via video dialtone. We also seek to encourage competition in local telephone services. The waivers we granted last month for Rochester Telephone represented one modest contribution on our part to the development of a more competitive local telephone marketplace. Today's action is another timely step forward.

This decision also illustrates our responsiveness to changing circumstances. We must not let our hopes distort our perception of realities, but genuine and substantial marketplace changes should be accommodated with corresponding measures of regulatory flexibility. In this instance, we are waiving our rules upon a compelling showing of special circumstances, based on our assessment of the present market conditions and future prognosis for competition in LATA 132 -- and our confidence that consumers throughout NYNEX's service area will be protected against negative impacts.

Our decision today is testimony to the importance of cooperation in the construction of a new competitive framework. The New York Public Service Commission has shown extraordinary leadership in creating conditions for increased competition. NYNEX has embraced change instead of fighting it, allowing competitors to collocate their equipment in NYNEX's offices and successfully negotiating mutual compensation and other complex issues with several competitive service providers. Those providers have relentlessly sought to accelerate the pace of change -- and to make the benefits of competition more widely available. I applaud them all.

The significance of today's ruling should not be overstated. Our action here is an individualized waiver, not our final blueprint for the transition to competition. Even in the New York marketplace, barriers to competition still remain, and robust, sustainable competition is not yet guaranteed. Accordingly, we will need to monitor closely the results of today's action in LATA 132 -- and improve our tools for assessing when competitive developments in other markets may justify waivers or rule changes.

As we continue our focus on local competition, we must remain attentive to the interplay between competition and universal service. Competition brings lower prices and increased choices for consumers (among other benefits), and it can thereby help us fulfill our universal service responsibilities by making services more attractive and accessible. But in today's environment universal service depends on subsidy flows that will not be altogether sustainable in a changed environment. We therefore need to reevaluate our universal service objectives and mechanisms in light of emerging competition, and we are doing just that within this agency and in collaborative efforts with state regulators and the National Telecommunications and Information Administration.

Meanwhile, we must press relentlessly forward with efforts to promote competition, as we are doing today.