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The New York Public Service Commission's recent endorsement of Bell Atlantic Corp.'s application to provide long-distance phone service in the state has set off a firestorm of disapproval from the major carriers.

Even though the commission's endorsement is contingent upon several conditions, including approval by the U.S. Department of Justice and the Federal Communications Commission, Bell Atlantic is preparing for what it hopes will be a rollout of service by yearend.

Marketing plans and packages are being finalized and readied for execution.

So far, no Baby Bell has had an application approved, even though the Telecommunications Act of 1996 was designed to open up the market. Ameritech Corp., BellSouth and SBC Communications all have been rejected in the past year.

Long-distance providers MCI Communications Corp. and AT&T Corp. believe Bell Atlantic will have an unfair monopolistic advantage if allowed in the market now. MCI, LCI International and Sprint Corp. all issued news releases protesting the New York decision.


Those carriers, of course, want to get into the local phone market as part of the same cross-offering of services, but maintain the Baby Bells are dragging their collective feet in terms of pricing and cooperation in back-office systems.

"We have a real shot to be in the long-distance market in New York by the end of the year," said Al Binford, president-CEO of Bell Atlantic Long Distance. "If you had asked me two years ago if I would have thought we'd have to wait two years for this, I obviously would have said no. But the good news is the end is in sight."


Brian Adamik, a consultant with Yankee Group, said he believes Bell Atlantic and the other Baby Bells will have to wait a little longer. Yankee Group predicts each regional telephone company will be offering long distance in at least one state by 2000.

As for the long-distance marketers going local, so far only Sprint owns its own local phone companies, accumulated by buying up small independents. Sprint has started a consumer and business-to-business ad campaign and is rolling it out market by market, via Grey Advertising, New York.

However fast or slow the entire process, Mr. Adamik said he expects a lot of money to be spent on marketing and advertising.

"Conservatively, if the regional telephone companies increase marketing and advertising spending by 25% to introduce long distance, I wouldn't be surprised. Marketing and advertising [are] going to be critical," he said.

$100 MIL TO $200 MIL EACH

Currently, the five Baby Bells spend between $100 million and $200 million each annually on measured media advertising, according to Competitive Media Reporting.

The addition of long distance also may hold other good news for ad agencies. Some Baby Bells may give those assignments to existing agencies -- SBC Communications has added a long-distance assignment to its business at Goodby, Silverstein & Partners, San Francisco -- while others, including Ameritech, BellSouth, Bell Atlantic and U S West, are expected to put those assignments into play for existing or possibly new agencies.

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