February 26, 2001

The Honorable Nora Mead Brownell
President
National Association of Regulatory Utility Commissioners
Commissioner, Pennsylvania Public Utility Commission
1101 Vermont Avenue NW
Suite 200
Washington, DC 20005

Dear President Brownell:

We are writing to you in both your capacity as a Commissioner in Pennsylvania and as President of the National Association of Regulatory Utility Commissioners to express our deepest concerns about proposals to break-up the telephone companies. We fear the proposal in Pennsylvania to split Verizon into a wholesale and retail company threatens workers, consumers and the economy.

Our concerns are those of residential telephone consumers, workers, people with disabilities, rural users and low-income consumers. We believe that structural separation - the words used to describe the further break-up of the telephone company - is risky business that puts service, rates and jobs in jeopardy. At best, it would scatter the consumer economies (of scale and scope) of an integrated network to the winds of the marketplace with its penchant for distributing the benefits of advanced telecommunications and information services to the high end of the market.

In particular, our concerns revolve around the following points:

• Splitting incumbent local exchange carriers, including the network, financial and real estate operations, will cost billions of dollars, diverting resources that could be used for deployment of advanced services and network upgrades.
• A wholesale-retail split is a radical, untested idea, which could put the entire universal system that keeps rural phone service affordable at risk.
• Structural separation could easily result in a dramatic rise in basic telephone rates, since the retail operators will not control the network or their biggest costs. The result would be significant harm to seniors and families who are on fixed or limited incomes.
• High-skill, high-wage union jobs could be lost.
• Structural separation will reduce or eliminate accountability for quality and service. Finger pointing between wholesalers and retailers could result in rampant consumer confusion.
• Structural separation is the antithesis of "one-stop-shopping." Separation makes it harder for companies to offer bundles, and less likely they will be available to consumers who want them.

We hope you will take our views into consideration and do everything in your power to prevent this risky proposition from gaining momentum.

Sincerely,

Paul Schroeder, President
Alliance for Public Technology

Linda Riegel, Civil Rights Advocate
Center for Independent Living of Central Pennsylvania

Roger Cazares, Executive Director
Metropolitan Area Advisory Committee (MAAC) Project

Frank Pinter, Executive Director
Making Choices for Independent Living, Inc.

Astrid A. Goodstein, President
Maryland Association of the Deaf

Patricia T. Hendel, President
National Association of Commissions for Women

Harry C. Alford, President & CEO
National Black Chamber of Commerce

Peter John Rozynski, President
New Jersey Association of the Deaf

Louis Meyer, Ph.D., President
Pennsylvania Citizens Consumer Council

Steve A. Florio, President
Pennsylvania Society for the Advancement of the Deaf, Inc.

Anne Werner, Executive Director
United Seniors Health Council

Jackie Brand, Chair
Universal Service Alliance

cc:

NARUC's Communications Committee The Honorable Tom Ridge, Governor, State of Pennsylvania The Honorable John Quain, Chairman, Pennsylvania Public Utility Commission The Honorable David Brightbill, State Senator, State of Pennsylvania The Honorable Robert Mellow, State Senator, State of Pennsylvania The Honorable Robert Jubelirer, State Senator, State of Pennsylvania The Honorable John Perzel, State Representative, State of Pennsylvania The Honorable H. William DeWeese, State Representative, State of Pennsylvania