The chairman of AT&T; Corp. defended the new Telecommunications Act yesterday as the telephone reform law approached its first anniversary, saying it is too soon to criticize the law for failing to deliver major savings to consumers.
"The only unreasonable expectation was that this would happen overnight, or at least within a year," AT&T; Chairman Robert E. Allen told an audience at the National Press Club in Washington. "It was an act of Congress, not an act of God."
President Clinton signed the telecommunications law Feb. 8, 1996. The law seeks to break the monopoly that the seven Baby Bell carriers and GTE Corp. have had on local phone service in most markets by letting AT&T; and other long-distance companies enter the $100 billion U.S. local phone industry.
In return, the Baby Bells will be allowed to enter the long-distance business after they show they have made deals with new competitors that let the newcomers connect their call-handling networks to traditional phone systems.
Ameritech Corp., which serves the Midwest, claims that it already has met these tests, and it has asked the Federal Communications Commission for permission to offer long-distance service in states where it is the dominant local carrier.
Bell Atlantic Corp., the traditional monopoly in Maryland, has said it will ask for permission to offer long-distance service in the middle of this year.
As the law's anniversary nears, it is being criticized for failing to deliver significant savings to consumers. But Allen pleaded for time, saying that state regulators are still setting the detailed rules for connecting networks and insisting that the Baby Bells are dragging their feet on opening local markets to competition.
Allen pleaded for patience, promising that AT&T; will try to undercut the Baby Bells on local service when it enters the business.
"If and when AT&T; is allowed to offer combined local and long-distance service throughout America, on the terms we've been asking for we will offer these services at no greater and probably less than what customers are paying separately for those services right now."
"AT&T; is building a base for public expectation for lower local rates; that's a good thing," said Gene Kimmelman, co-director of the Consumer Union's Washington office. "But, if AT&T; doesn't deliver on it -- breaches its promise -- the public will hold them accountable, either losing confidence in the word of the company or abandoning them."
Pub Date: 2/05/97