Sempra Communications Acquires License to Become Competitive Local Exchange Carrier

Business Wire, June 21, 2000

Business Editors

SAN DIEGO--(BUSINESS WIRE)--June 21, 2000

Sempra Communications, a subsidiary of Sempra Energy (NYSE:SRE), today announced it has been granted authority to provide competitive local exchange telephony services on a statewide basis, as the result of a California Public Utilities Commission (CPUC) interim decision authorizing Sempra Communications to become a Competitive Local Exchange Carrier (CLEC).

"With our CLEC authority, we now have the opportunity to explore new business ventures to provide telephone service in California," said Michael Allman, president of Sempra Communications. "We are considering several partnership opportunities with industry leaders that will allow us to utilize our respective resources and expertise to effectively compete in the local telephone service market."

CLEC authority is a relatively new concept that comes from the 1996 Telecommunications Act deregulating the telephone industry. The Act mandates that incumbent local exchange carriers (ILECs), or local phone companies, allow CLEC-licensed companies to co-locate switches and other network equipment within the existing structure of the ILEC's central offices. The law also requires that an ILEC provide services by making existing local loop and other network elements available for purchase.

In the case of Sempra Communications, its license as a limited facilities-based CLEC means it can offer telecommunications services utilizing equipment only if it is installed within or on existing buildings and structures. Because the CPUC is developing new rules for compliance with the California Environmental Quality Act (CEQA), the CPUC has not yet acted on Sempra Communications' request for full facilities-based authority. Such authority is, however, expected by year-end.

Earlier this year, Sempra Communications announced its participation in Aerie Networks, a company that will build and maintain a nationwide fiber-optic broadband network. For that project, CLEC authority was not required since Sempra Communications is not directly involved in building the network infrastructure, and it is not marketing the service to customers.

Sempra Communications is a subsidiary of Sempra Energy, a San Diego-based Fortune 500 energy services holding company with nearly $5.5 billion in revenues, 12,000 employees and 9 million customers worldwide.