In a further sign of a fraying relationship between the nation's largest long-distance company and the regional Bell operating companies it spawned, Bell Atlantic Corp. announced yesterday that it has dropped AT&T; Corp. as the systems integrator for its planned full-service video network.
The Philadelphia-based regional phone company said it would manage the network itself.
Last May, the two companies held an amiable news conference in Washington at which Bell Atlantic designated AT&T; as one of the stars of its team of network contractors. But after eight months of negotiations, the two companies could not agree on a final contract, so AT&T; was relegated to the bench, where it will continue to act as a supplier.
Eric Rabe, a Bell Atlantic spokesman, said the company's switch was the result of a growing consensus that systems integration -- which essentially pieces together hardware and software from multiple suppliers and makes the whole system work -- was a core business function.
"Fundamentally it was a shift in our thinking about what was an appropriate role for us and what was appropriate to farm out," he said.
But Mr. Rabe also indicated that the decision was influenced by recent tensions between the two companies as their businesses increasingly come into competition.
Last week, Bell Atlantic filed a suit in federal court in Newark, N.J., accusing AT&T; of running false ads promoting its long-distance rates for calls within area codes -- an arena in which AT&T; and the regional Bells companies compete head-to-head. Last August Bell Atlantic joined Nynex, its partner in a New York cellular venture, in suing to block the $12.6 billion merger of AT&T; and McCaw Cellular Communications Inc. That suit was later settled.