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AT&T, MCI Expected To Beef-Up Enterprise Solutions: Page 2 of 3

Wilson, who is CEO and president of the Telwares telephony consultancy, says the best way for most enterprises to save money on local telephony is still usually to move to one of the long-distance companies--provided, of course, that the long-distance firm has built out its own facilities-based network.

"The enterprise market has been more facilities-based than UNE-P-based, which is for the consumer market," said Wilson, explaining that the UNE-P issue addresses the consumer market to the benefit of the RBOCs and to the detriment of the long-distance companies.

Wilson said the access-fee decision is not the "death knell" of the long-distance companies. He noted that the long-distance companies have been struggling ever since the original AT&T was broken up two decades ago. Long-distance fees have plunged, draining revenues and profits from the long-distance firms, while the importance of "the last mile" telephone line ownership by the RBOCs has ascended in value.

While Wilson believes AT&T and MCI will beef-up their efforts to serve the enterprise area, he says some segments have been particularly hard hit by the access-fee developments. He cited the retail section, particularly where big corporations have hundreds or thousands of separate locations spread around the country. They are too scattered to have facilities-based networks dedicated to their business, so they are expected to see a sharp increase in the cost of their telephone service.

The FCC is attempting to mitigate the cost of access fees. Chairman Michael Powell has said the FCC will strive to develop rules to keep wholesale access-fee rates from rising too high. The RBOCs--BellSouth, Qwest, SBC, and Verizon--have all pledged not to raise the wholesale rates they charge long-distance companies until the end of the year.