SBC Reacts to FCC Vote

SAN ANTONIO -- NOTE: The Federal Communications Commission today voted on new rules governing local telephone competition and broadband services. The following statement is the reaction of SBC Communications (NYSE:SBC - News) to the vote. It may be attributed to SBC President William Daley. Today's decision regarding local competition is disappointing because it refuses to acknowledge the new world of telecommunications that has evolved since the 1996 legislation. Local competition now comes in the form not only of wireline service, but also from cell phones, the Internet, cable telephony and more. Instead of acknowledging this new reality and freeing telecom companies to invest and bring new services to consumers, today's decision preserves the status quo of lost jobs, corporate subsidies, illegal rules and diminished investment. It is a loss for American consumers, telecom employees and advocates of real reform. This decision allows the giant long distance companies to continue cherry picking the highest margin customer without providing any benefits to the average consumer. They are exploiting the rules to squeeze revenues out of the system in support of their failed business models. Rather than reform the rules to provide an economic stimulus to the entire industry, the FCC has chosen to continue guaranteeing profits to the long distance companies without requiring them to invest anything in the local phone networks. The new rules governing local competition appear to fly in the face of previous orders by the United States Supreme Court and the U.S. Court of Appeals. The FCC's broadband decision shows that the Commission understands the need for a national policy that preserves the economic rationale for companies making big investments in technology. It is anyone's guess why the FCC does not apply the same logic to local phone service. SBC Communications Inc.