Bringing local phone customers in Chicago more competition won’t mean lower rates, executives from Ameritech Corp. and SBC Communications Inc. conceded Tuesday, but it will mean more choice of services.
Within the next two weeks, officials said, SBC and Ameritech expect to file papers with state and federal authorities to advance the proposed merger they announced in May.
On Tuesday, they gave a sneak preview during a daylong hearing before the Illinois Commerce Commission.
The five commissioners scheduled the meeting mainly to inform themselves about the complex merger and to gather suggestions on what conditions they might place on Ameritech should the board approve the merger.
One clear message from the hearing was that regular residential customers who opt for few services beyond a basic phone connection will be the lowest creatures on the telecommunications food chain.
Most customers, according to one SBC executive, prefer faster Internet connections or new kinds of services, such as Caller ID, over, say, a monthly bill that’s 50 cents lower.
“I would be surprised if somebody in Illinois, if they had a choice between a reduction in local rates or new services,” would opt for the rate reduction, said J.D. Ellis, senior vice president and general counsel of SBC.
Although Ameritech’s chairman, Richard C. Notebaert, didn’t attend the ICC meeting, he told an informal meeting of reporters the SBC-Ameritech marriage is aimed at creating a global competitor that plans to offer local phone service in all 50 of America’s biggest markets.
Once an enlarged SBC starts offering local phone service in New York, Philadelphia, Atlanta and Miami, the regional phone companies there will reciprocate and enter Chicago’s market, Notebaert said. This will mean more choices and a shower of new products for consumers, but probably not lower rates, he said.
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That’s because residential customers already pay artificially low rates that are subsidized by business customers, Notebaert said. Ameritech has proposed to remedy this in Illinois by raising basic rates for residential customers and lowering them for businesses.