News from the Oklahoma Corporation Commission

Jim Palmer, Director of Information

October 20, 1999

OKLAHOMA CORPORATION COMMISSION IS FIRST REGULATORY BODY IN THE NATION TO APPROVE ALTERNATIVE RULES TO OPEN THE STATE’S MAJOR TELECOMMUNICATIONS MARKETS TO COMPETITION

(OKLAHOMA CITY)—By unanimous (3-0) vote Wednesday, Oct. 20, the Oklahoma Corporation Commission (OCC) adopted alternative regulations designed to open the state’s major telecommunications markets to competition and customer choice.

The Commission’s vote culminates nine months of research and negotiations started by the OCC’s Public Utilities Division with significant input from the Commission’s Telecommunications Advisory Group (TAG) and the Governor’s Telecommunications Task Force.

Commission Chairman Bob Anthony said "we are especially grateful to commission staff, Southwestern Bell, the office of Attorney General and the telecommunications industry representatives who dedicated countless hours of technical expertise needed to bring final form to this very complex subject."

Adopted on both an emergency and permanent basis, the new rules provide ratepayer protection while allowing time for market competition to grow.

Commissioner Denise Bode emphasized the work was accomplished with the full support of the state’s policy makers and said "Oklahoma is the first state that has done this at the agency level and done it right." Bode described it as "moving into a competitive environment with the right checks and balances to make sure Oklahomans are better off as a result of the change. I also thank and commend Chairman Anthony for his leadership in moving this very complex matter forward in a manner that kept everyone focused on the issues that were important."

Commissioner Ed Apple compared the tough rule-making process with a space launch. Apple said "we are going to have to launch this rocket and if there are any problems with it we will tweak it on its way." Apple pointed out that the decision "reaffirms our commitment to open markets and favors competition as opposed to artificially subjective limitations. He said it removes barriers as our journey continues and we work to benefit Oklahomans."

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Page 2, new competition rules

Highlights of the new alternative regulation rules are:

1. Opening the local market to competition
2. Changes from traditional earnings regulation to price regulation which encourages companies to be more efficient in offering services.
3. Caps prices at current levels for basic local service for five years to allow time for competition to grow and restricts price increases until competition is established.

4) The regulatory half of the plan will be accompanied by a transition plan which includes incentives to bring competition into the market and requires infrastructure development particularly in those areas not likely to engender competition on their own behalf.

Chairman Anthony said "it is obvious this change to competition does not work without active, aggressive competitors which is why the transition plan is weighted toward incentives for competition."

The Commission will conduct deliberations on the second phase of alternative regulation for competition or the transition plan by the end of November with a hearing and vote on the final phase scheduled for December 1.