Armstrong: Phone Competition Heating Up

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Washington -- AT&T Corp. chairman and CEO C. Michael Armstrong said
Tuesday that local phone competition in some big states is heating up, but he
urged federal regulators to block entrenched incumbents from denying network
access to advanced service rivals.

In a speech here, Armstrong praised regulators in New York, Michigan,
Illinois, Indiana and Ohio for slashing incumbents' network-access rates to
produce the kind of local phone competition promised by the Telecommunications
Act of 1996.

'Now is not the time to change the rules. Misguided legislation or
ill-conceived regulatory action would return us to the cold noncompetitive
climate we left six years ago,' Armstrong said to the American Enterprise
Institute for Public Policy Research, a conservative think tank.

The Federal Communications Commission is considering scaling back the number
of network elements a phone incumbent must furnish rivals. The agency also has
to decide whether to allow new entrants the right of line sharing, or leasing
just the data portion of cooper loop.

Asked if he thought regulators might hurt the competition that he said was
blossoming in several states, Armstrong said, 'I think they will do no
harm.'

A spokeswoman for the United States Telecommunications Association -- a trade
group that represents hundreds of local phone firms -- agreed that voice
competition was growing but disputed the need for the FCC to impose
network-sharing requirements on digital-subscriber-line service while cable
controls 70 percent of the market.

'Unfortunately, AT&T seems to support efforts to force the same
regulatory structure for voice services onto DSL, which we are adamantly opposed
to,' USTA spokeswoman Allison Remsen said.

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