August 5, 1999

Re:	Access Charge Reform (CC Docket No. 96-262); Price Cap Performance Review for Local Exchange Carriers (CC Docket No. 94-1).

During the past decade, exchange access competition has increased significantly. I am optimistic that the investment and infrastructure deployment that has occurred demonstrates a strong and irreversible trend toward a multiplicity of carriers in the marketplace. We must ensure that our regulations do not impede this progress.

Part of the calculus is to determine not just when to regulate, but when to deregulate. Today we take a measured step forward. By first providing incumbents with downward pricing flexibility for high-capacity services, we allow them to respond to the new competitive marketplace for these services. Consumers should also benefit from lower prices. And, by using the presence of collocation in a market as the trigger for regulatory relief, incumbents should have additional incentives to work more cooperatively with new entrants ironing out collocation wrinkles that should have disappeared long ago.

Although I am enthusiastic about this step forward, I cast my vote with guarded optimism. I intend to watch marketplace reactions very carefully. I prefer to act incrementally, so that we can ensure that no harm to competition occurs. If the framework we set out today is successful, I expect to take more steps in this direction as we continue down a path toward deregulation.