News from the Oklahoma Corporation Commission

Jim Palmer, Director of Information

November 30, 1999

(OKLAHOMA CITY)—With a unanimous (3-0) vote, Oklahoma’s Corporation Commissioners approved a stipulated agreement between the Commission, Southwestern Bell Telephone Co. (Bell), sixteen other major telecommunications firms, the Attorney General and the Oklahoma Education Coalition. The stipulation is designed to bring competition to local telephone service through a new alternative form of regulation.

The agreement culminates more than four years of Commission study including over 20 public meetings the past five months with input from industry, consumer groups and state government leaders. Additional hearings were conducted by the state Telecommunications Task Force representing the Governor, Attorney General, Corporation Commission and House and Senate.

The Task Force recommended shifting from rate of return/rate base regulation to an alternative form of regulation. The result is the first plan in the country to be adopted through the regulatory agency with technical expertise on public utilities rather than by legislation.

The new alternative regulation rules cap charges for basic local service so they cannot increase during the five-year transition to competition. Capping rather than freezing rates keeps charges to consumers from going up but allows them to go down as competition comes into play.

Commission Chairman Bob Anthony called the agreement "A victory for Oklahoma telephone customers over monopoly service. We have approved a balanced settlement with consumer protections, rate caps, and most of all, the strongest incentives in the region to bring real competition and choice to Oklahoma consumers."

Commissioner Denise Bode said "The action we take today will help build Oklahoma’s information highway for the new millenium."

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Among the settlement benefits, Bell agrees over the next three years to deploy ADSL (digital subscriber line) technology in 22 non-metro cities across the state and deploy additional facilities in Oklahoma City and Tulsa.

As someone who lives in rural Oklahoma, Commissioner Ed Apple considers the expansion of digital technology to the rural areas "a monumental cornerstone for maintaining a strong rural Oklahoma."

Bell will also replace all remaining analog switches in the state with digital switches and replace other switches not capable of providing selected optional services such as Caller-ID. The estimated cost of these infrastructure improvements is approximately $200 million.

Bode calls the infrastructure investment "essential just for Oklahomans to stay competitive. Expansion of and access to state-of-the-art telecommunications service is the key to economic growth in this information age."

The plan helps to remove what potential competitors identified as a barrier to them coming to Oklahoma by providing discounts on the rates for certain pieces of equipment which are needed by a competitor to interconnect with the Bell system. The discounts will be good for five years as a means for companies to enter the market and become competitive.

The agreement further provides for Bell to contribute $30 million to the Oklahoma Academy for State Goals to establish an education information technology fund. The fund will be managed by a seven person Board of Trustees made up primarily of representatives of various educational associations and councils.

The plan was endorsed during sworn testimony by the president of the Oklahoma Education Association representing the Oklahoma Education Coalition.

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