Copyright 2000 The Washington Post
The Washington
Post
March 8, 2000, Wednesday, Final Edition
SECTION: FINANCIAL; Pg. E03
LENGTH: 581 words
HEADLINE:
Bell Atlantic Blocking AT&T, Armstrong Says
BYLINE:
Peter S. Goodman , Washington Post Staff Writer
BODY:
AT&T Chairman C. Michael Armstrong yesterday charged
Bell Atlantic Corp. with impeding local telephone competition in New York state
by failing to fix widespread systems problems. He threatened to file a complaint
with the Federal Communications Commission--which is already considering an
enforcement action--seeking to revoke the company's right to sell long-distance
service.
"Tens of thousands of customer requests have been lost in Bell
Atlantic's systems," Armstrong said in a Washington speech. "Their systems are
collapsing." Bell Atlantic dismissed Armstrong's claims as "another skirmish in
AT&T's decadelong battle opposing competition in the long-distance
marketplace."
Yesterday's exchange raised the volume on a debate whose
outcome could affect the pace of unfolding telecommunications competition, as
regional phone companies around the country seek to expand into the
long-distance business. Under the Telecommunications Act of
1996, the FCC may allow the regional companies in only after finding
they have unalterably opened their local-service markets to rivals.
Last
December, Bell Atlantic became the first to claim that right, even as AT&T
Corp. and others argued that its computer systems in New York could not weather
a flood of orders from competitors seeking to switch over customers.
Some of Bell Atlantic's rivals have since complained that the regional
company has misplaced and failed to fill thousands of orders. Both the FCC and
the New York Public Service Commission are investigating such reports.
A
source with knowledge of the FCC's deliberations said yesterday that the issue
of whether to levy fines against Bell Atlantic has expanded beyond the agency's
enforcement bureau and is now in the hands of the commissioners.
Bell
Atlantic has acknowledged problems with the software it uses to inform
competitors of the status of change orders, but it denies it has lost many.
Last month, the New York commission ordered the company to clear its
backlog of orders by Feb. 18. Bell Atlantic said it met the deadline, but a
spokesman for the commission said the agency has yet to verify that claim. If
the company is found to have failed, it is liable for up to $ 100,000 a day in
fines for disobeying an order, plus up to $ 22.4 million in fines per month
under conditions negotiated when it gained long-distance approval.
As
Armstrong portrayed it, the problems continue. In a speech before the National
Association of Regional Utility Commissioners, the AT&T chairman threatened
to file an FCC complaint if Bell Atlantic does not cease marketing long-distance
service in New York within 48 hours. AT&T made its demand to Bell Atlantic
in a letter sent yesterday.
"Our brand is damaged each and every time
they fail to provide our customers with services," Armstrong said, adding that
New York amounts to a "cautionary tale that shouldn't be repeated."
In
an interview after the speech, Armstrong said AT&T has "between 28,000 and
30,000 orders" backlogged in Bell Atlantic's system.
Armstrong's
decision to unleash his assault at a meeting of state utility regulators seemed
no accident. They are the first barrier between the Bell companies and the
long-distance business.
The FCC is considering whether to approve a
Texas application from SBC Communications Inc. to provide long-distance service.
BellSouth Corp. is expected to soon seek the FCC's permission to enter the
long-distance market in Georgia.
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