THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, June 27, 1996 TAG: 9606270363
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 81 lines
AT&T Corp., the nation's long-distance market leader, won the State Corporation Commission's approval Wednesday to get back into the local phone business in Virginia.
Ma Bell immediately launched a high-stakes war of words with the most aggressive of its divested offspring, Bell Atlantic Corp., which currently dominates local phone service in the state.
AT&T's plan to offer local service early next year, in competition with Bell Atlantic, will lead to the ``breaking down of the last monopoly obstructing the information highway in Virginia,'' said Jack McMaster, president of AT&T's Atlantic states region.
McMaster said AT&T will drive down prices for local services, partly by offering discounts to customers who sign up for a whole ``suite of services'' from the company: long-distance and wireless telephone, satellite TV and access to the global Internet computer network.
But he accused Bell Atlantic executives of a last-gasp effort to protect their company's dominant position. He said AT&T has been unable to negotiate an equitable ``resale agreement'' with Bell Atlantic, under which it would use Bell Atlantic's network to deliver local services to its new customers.
The two companies are far apart on the wholesale discount that AT&T would get from Bell Atlantic to use its network. AT&T has asked for a 32 percent cut from Bell Atlantic's current basic rates. Bell Atlantic has proposed a far smaller discount, AT&T executives said, although neither they nor Bell Atlantic officials would say how much.
Bill Stake, AT&T's regional vice president for local services, said the disagreement and several others with Bell Atlantic will likely have to be arbitrated by the State Corporation Commission. He said AT&T will likely ask the commission to intervene as early as July 15.
The sweeping telecommunications-reform bill signed into law by President Clinton earlier this year all but wiped out monopolies in telecommunications, from cable TV to local phone service. It also accelerated a process that began in Virginia last year to open local telephone services to competition. The federal law requires local-exchange monopolies like Bell Atlantic to negotiate resale agreements and exchange calls with their new rivals.
AT&T is one of dozens of potential new competitors to Bell Atlantic and GTE Corp., the second-largest local phone-service provider in Virginia. Others planning to offer local services in the state include MCI Communications Inc. and Cox Communications Inc., the dominant Hampton Roads cable-TV system operator.
In battling Bell Atlantic, AT&T will be taking on its former offspring. Bell Atlantic was one of the seven regional Bell operating companies created out of AT&T in the breakup of that company in 1984.
Bell Atlantic is determined to make the competition with its former parent a two-way street. It's planning a tit-for-tat invasion of the long-distance market, in which Ma Bell grabs more than 50 percent of total revenues.
Bell Atlantic's move into long-distance, planned for early next year, will depend, however, on satisfying state and federal regulators that it has taken sufficient steps to open its local-exchange monopoly to competition. Last month, in hopes of satisfying that requirement, the company announced an agreement with a Northern Virginia cable operator to help it enter local phone service.
AT&T's McMaster said it was ``ludicrous'' to consider that sufficient competition. He said Bell Atlantic is trying to fool regulators with that agreement and is stonewalling AT&T in the meantime.
But Paul Miller, a Bell Atlantic spokesman, said AT&T is really to blame. He said AT&T is trying to delay progress on local-exchange issues to pressure regulators to move slow on letting his company into long distance.
``They're really far more interested in keeping us out of the long-distance business as long as possible than they are in negotiating seriously for an interconnection agreement to provide local service,'' Miller said. ``AT&T has no desire to compete in the long-distance business with a company with our resources.'' MEMO: THE PLAYERS AND THEIR PLANS
AT&T will give discounts to customers who buy multiple communications
services from the company, such as a combination of telephone, satellite
TV and Internet access.
Bell Atlantic plans to offer long-distance service early next year.
Others, including MCI and Cox, also plan to start local phone
service. by CNB