February 1, 2002 -- The Public Utilities Commission of Ohio (PUCO) ordered Ameritech Ohio to pay a forfeiture of $8.5 million to the state of Ohio and to forgo certain revenues to help stimulate residential competition in Ohio and provide advanced services in the Appalachian region of Ohio. The order is in response to the findings and recommendations the Liberty Consulting Group made in its analysis of Ameritech's service quality from August 1999 through May 2001.

By order on October 4, 2001, the Commission established rates known as unbundled network elements that competitive local exchange companies (CLECs) pay Ameritech for use of its infrastructure. Among other considerations in that order, the company was ordered to reduce its non-recurring customer transfer rate from $111 to $.74.

In order to further stimulate residential competition in Ohio, the Commission order requires Ameritech to lower its monthly recurring rate by $1.50 for 24 months for residential customers. The reduction of this rate reduces the total wholesale monthly rate a CLEC would have to pay Ameritech for use of its infrastructure from $13.14 to $11.64.

"What was already among the lowest wholesale prices in the country has now been reduced further by this order," PUCO Chairman Alan R. Schriber stated. "Clearly, Ohio must now be the least costly state in the nation for a potential competitor to do business."

In addition to its efforts to stimulate residential competition in Ohio, Ameritech must also provide advanced services in the Appalachian region of Ohio. In cooperation with Joy Padgett, Director of the Governor's Office of Appalachia, and the staff of the PUCO, Ameritech will work to meet the needs of residents, businesses, and public offices identified in the project Access Appalachia.

"We believe strongly that there are inadequate advanced telecommunication services in the Appalachian Region of Ohio," Chairman Schriber stated. "The Ohio Supercomputer Center's Technology Policy Group worked with the Governor's Office of Appalachia and its partners to identify some regional telecommunications deficiencies through Access Appalachia. We believe that this directive will help implement the master plan for telecommunications deployment identified as a result of the project."

"Through Access Appalachia, we were able to assess the network infrastructures and develop a master plan for the deployment of these advanced telecommunication services in the region," Director Padgett stated. "We are eager to work with the Public Utilities Commission of Ohio and Ameritech as it will give us an opportunity to implement the plan we developed through Access Appalachia."

The Commission Order also directs that Ameritech must pay a forfeiture to the state of Ohio in the amount of $8.5 million within 60 days of today's order.

"We could have assessed Ameritech a higher forfeiture for each violation of the state's Minimum Telephone Service Standards," Chairman Alan R. Schriber stated. "However, we would rather see Ameritech make investments that will benefit Ameritech's customers directly by fostering a competitive environment that will result in better prices and service and by providing more advanced services."

In its Order on July 20, 2000, the Commission found that a comprehensive audit of Ameritech should be performed to review the company's practices and procedures to ensure compliance with the state's Minimum Telephone Service Standards (MTSS). The purpose of the audit was to address how well Ameritech measures the quality of its service and how well the company manages the performance of the work activities that it takes to deliver that service. Of particular interest to the Commission was the accuracy of Ameritech's measurement and recording of its performance against the standards established in the MTSS that address repair intervals, installation intervals, and missed repair and installation appointments and commitments.

The Commission issued an entry on January 4, 2001 selecting the Liberty Consulting Group to perform the audit of Ameritech. Liberty filed its initial report with the Commission on September 21, 2001, which addressed the months from August 1999 through May 2001. Liberty presented its recommendations from that report at the October 11, 2001 Commission meeting. Following Liberty's presentation, Ameritech and the intervenors in the case were given an opportunity to respond to the auditor's process, findings, and recommendations. Upon consideration of Liberty's recommendations, the case record, and directives, the Commission does not believe that Liberty needs to prepare any additional reports.

The directives set forth in the Commission order were determined after review of the case record and Ameritech's efforts to improve service. The audit report cannot be used to reach any conclusions regarding present levels of service being provided by the company.

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