CONTACT:
Bruce Kushnick, 212-777-5418
Bob Garnet. 201-218-7125
Web Site: http://www.teletruth.org

FOR IMMEDIATE RELEASE: March 12th, 2002

TELETRUTH --- SBC FAILS TO COMPETE IN 30 CITIES BY 2002:
REQUESTS SENATOR HOLLINGS START INVESTIGATION TO BREAK UP THE SBC/AMERITECH MERGER AND HAVE SBC PAY $1.2 BILLION IN PENALTIES.

New York --- Today, TeleTruth, a national customer alliance requested Senator Earnest Hollings to hold hearings on SBC's failure to meet the competitive commitments it made to win government approval of its merger with its rival Ameritech. According to the merger agreement, by April 2002 SBC was supposed to be competing in local telephone service in 30 cities outside its home region or pay fines totaling $1.2 billion. To date, there is no indication that SBC has come close to fulfilling its commitments.

"There has been a disturbing pattern of behavior on the part of the local Bell monopolies to make--and then ignore--commitments to the public to win approval for premature deregulation and favorable decisions opening the way for an unprecedented consolidation of phone monopoly interests," said Bruce Kushnick, Chairman of TeleTruth. "No one in authority has held SBC accountable for ignoring their commitments and obligations as they continue to expand and strengthen their control over wireline telecommunications at the expense of the public's interest in fostering a meaningful competitive marketplace."

SBC's merger with Ameritech has also harmed the economy and the customers in the five-state-region served by the formerly independent Ameritech by bringing with it poorer customer services According to a letter from the FCC's Common Carrier Bureau to SBC at the end of 2000, it is clear that service in the Ameritech region declined. (Letter From FCC TO SBC, DA 00- 2298, October 6, 2000)

"In particular, I am concerned that SBC's performance data indicates that consumers in SBC's region are experiencing increasing installation delays, longer repair times, and greater difficulties contacting SBC's incumbent LECs about service quality and other issues. I note also that consumer complaints regarding service quality have increased in recent months in spite of SBC's explicit commitment when the merger was pending to devote greater resources to service quality after the merger closed."

More recently, an industry newsletter "The Front Lines" by the Heinlein Group (Vol. 2, Issue 4, Feb. 25, 2002) discussed how penalties are currently being put on SBC from all of the Ameritech states.

"ILLINOIS, INDIANA, MICHIGAN, OHIO, AND WISCONSIN FINE AMERITECH OVER $1 MILLION ---Ameritech will be fined over $1 million in penalties and service credits by state regulators throughout its region for failure to comply with SBC-Ameritech merger service quality conditions during the month of November 2001."

These problems also effect the Competitors who are trying to offer services. The CLEC Association of Michigan filed an Emergency Complaint in December 2001 claiming illegal practices:

"SBC/Ameritech Engaging In Illegal, Unfair Behavior In Blocking Competition, Broadband, Michigan CLEC Association Says."

And in California, Pac Bell, the other merged Bell with SBC, was found to have overcharged customers $350 million dollars. This headline and opening from the California Public Service Commission says it all. (CPUC, February 21, 2002, PUC18)

"INDEPENDENT AUDIT FINDS PACIFIC BELL OWES RATEPAYERS ALMOST $350 MILLION. The California Public Utilities Commission (PUC) today released the results of a comprehensive independent audit of Pacific Bell that recommends customer refunds of almost $350 million."

Kushnick states "We believe that SBC not only failed to bring competition to the US, but it is also exhibiting a pattern of disregard for the key pro-competition and improved performance commitments it made to customers and regulators as a condition for its unprecedented merger with Ameritech. The imposition of the $1.2 billion penalty SBC agreed to pay if it failed to meet its obligations is now justified and is the minimum fine required in the public interest.

"More importantly, the imposition of large financial penalties for such performance failures and anticompetitive behavior will not be enough to modify the action of such a large and powerful Bell company going forward. SBC has gained market power and control over core markets in five additional states, market power that it has used to thwart the development of competition and limit customer choice. TeleTruth therefore urges policymakers and Congress to explore divestiture of Ameritech as well as related structural remedies like those contemplated in Senate Bill S. 1364 that has been introduced by Senator Hollings. Financial penalties and regulations will not mitigate the root cause incentives and capabilities that have enabled SBC to succeed in delaying and undermining the anticipated customer benefits of the industries latest pro-competition and deregulatory reforms" adds Kushnick.

To read more about this situation read our exclusive article in "TeleTruth News" the TeleTruth Newsletter: http://www.teletruth.org/TakeAction/Breakupsbcameritech/liarliar.htm

For more information about the SBC Ameritech merger see:
http://www.teletruth.org/TakeAction/Breakupsbcameritech/BreakupSBCAmeritech.html

To read the letter to Senator Hollings at: http://www.newnetworks.com/Hollings%20Rev.htm

For a list of the cities SBC was supposed to compete in see:
http://newnetworks.com/SBCfailedcities.html

For more information, contact Bruce Kushnick at 212-777-5418 or bruce@teletruth.org or Bob Garnet. 201-218-7125, bob@teletruth.org