Telecommunications is an industry that is indispensable to the economy of the state and to the quality of life of our citizens. The Georgia Public Service Commission’s role in this vital industry is determined by Georgia’s Telecommunications and Competition Development Act of 1995 (O.C.G.A. §46-5-160 et seq.) and the Federal Telecommunications Act of 1996. The primary goal of both of these authorities is to replace regulated monopoly service with a competitive market. As Georgia has moved to a competitive market, the Commission has certificated 115 alternate local exchange providers, 462 resellers, 132 alternative operator service providers, 36 interexchange carriers, and 603 customer owned coin operated telephone providers. The Commission has also resolved 5 arbitration cases and approved 313 interconnection agreements. The Commission has continued to administer a Universal Access Fund and ordered further reductions in rates for intrastate tolls. The Commission has completed implementation of HB 888, which further expanded the availability of Extended Area Service by approximately 750 routes.

Responding to consumer complaints about the high and differing costs of changing long distance carriers, the PSC capped service order charges at $10.00. Staff investigations revealed that companies had been charging between $5.00 to $25.00 to effect a switch in carriers.

In August of 1997, the PSC took action against telephone companies found to be charging long distance fees for calls made within the same county in violation of a 1990 law. After a series of complaints from consumers in Rabun, Catoosa, Dodge and Decatur counties, the PSC issued an order mandating that companies comply within 180 days or risk the revocation of their certificates to offer long distance services in Georgia.

Internet access for Georgia’s classrooms and libraries was made easier by an Order of the Commission adopting a $2.25 billion Federal Communications Commission ("FCC") discount program for telecommunications costs. This discount program, which was first made available in January 1998, offers eligible public and private K-12 schools, as well as all public libraries, a 20 to 90% discount on telecommunication services and is expected to free up local funds for other educational programs and supplement current initiatives to provide access to the Internet.

The Metro Atlanta Calling Area received the new area code 678 in January 1998. In early 1997, BellSouth notified the PSC that Atlanta’s explosive growth would soon exhaust the

770 area code. In light of this disclosure, options available to the Commission to ensure the availability of telephone numbers were either to institute a geographic split, which would result in the change of area codes of over 1.5 million existing telephone numbers, or to adopt an overlay plan, which would result in only newly issued telephone numbers being assigned the 678 area code. After holding public hearings in Conyers, Peachtree City, Douglasville, Lawrenceville and Marietta, the Commission chose the overlay plan. BellSouth notified its customers of the new area code through an extensive media campaign that lasted several months. Implementation of the new area code had no effect on Atlanta’s toll free calling area, which is the largest in the world and runs from Gainesville in the North to Griffin in the South, from the Alabama border in the West and extends beyond Covington in the East.

On February 17, 1998, the Commission ruled that the Municipal Electric Authority of Georgia (MEAG) was not vested with the statutory authority to apply for certification to sell telecommunications services on its planned $35 million fiber network. In support of its application for certification, MEAG’s attorneys argued that in the developing competitive environment, electric distributors, such as itself, needed to have an adequate infrastructure

in order to make more electric pricing options available and manage the operation of its system more efficiently. Opponents argued and the Commission agreed that as a creation of the legislature brought into existence for the purpose of selling bulk electricity, MEAG was without the requisite enabling authority to enter into the telecommunications business.

A subsequent challenge in Superior Court resulted in a ruling in support of the Commission’s decision.

In April 1998, more than 121,000 Georgians voted to expand their local toll-free calling areas by approving 615 of the 1390 routes that were under consideration statewide. On May 19, 1998, the PSC ordered telephone companies to make over 700 calling routes toll-free effective June 1, 1998. Earlier in 1998, the PSC approved seven other routes; the telephone exchanges involved were Abbeville to Cordele, Alapaha to Lakeland, Albany to Ashburn, Albany to Parrot, Ashburn to Fitzgerald, Ashburn to Ocilla, Lakeland to Sparks, Lakeland to Pearson, Macon to Perry, Nashville to Tifton, and Nashville to Valdosta.

On May 27, 1998, BellSouth filed with the PSC notice of its prospective plans to file an application with the FCC to offer long distance service in Georgia. In response to this filing, members of the Commission’s telecommunications division performed an in-depth analysis to assess whether BellSouth has met all of the necessary criteria and adequately opened up the local market to competitors on equal terms. This analysis resulted in the Commission Staff issuing a 160 page report on October 15, 1998, in which it requested that BellSouth file additional information in support of its application. It is expected that the Commission will make a recommendation to the FCC as to its assessment of BellSouth’s application to enter into the long distance market during the first half of 1999.

On July 1, 1998, legislation advocated by the Commission became effective imposing tougher penalties on telephone companies that switch consumers local and long distance phone services without their consent ("slamming"). Under the newly enacted law, telephone companies are given up to 90 days to resolve a consumer's slamming complaint. If the offending company has not issued a refund to a consumer within this time frame, that consumer can sue the company in a local court for a sum of money equaling up to three times the amount the consumer lost in rate differentials. Telephone companies also may be fined by the Commission up to $15,000 per slamming violation.