Armstrong Wants Bells Slapped


Washington -- AT&T Corp. chairman C. Michael Armstrong warned that his
company needs some policy changes in order to effectively compete as a local
phone provider.

In a speech at the National Press Club here Wednesday marking the
Telecommunications Act of 1996's anniversary, Armstrong said he wants the
Federal Communications Commission to lift cable-system-ownership limits in order
to help boost cable-telephony penetration.

He also wants the FCC to force incumbent local phone companies, such as
regional Bells, to provide 'economically viable' discounts for leasing network

'Pure and simple, we are being pushed out of the market by the inflated
prices the Bells are charging,' Armstrong said. 'If nothing changes, we will be
forced to shut down our local-service business in both New York and Texas.'
AT&T buys local phone capacity there and resells it to consumers.

Armstrong also wants scale economies from cable-system size to effectively
compete for phone customers. AT&T currently has about 600,000 cable-based
phone customers.

'As the Bells continue to bulk up into bigger and bigger monopolies, the only
constraint they seem to have is the antitrust laws,' Armstrong said. 'And
they've gotten a green light from the Justice Department . because the Bells
don't compete with each other. But companies that would compete against them,
like the cable companies, are constrained.'

The FCC pegs AT&T's control of the cable-subscriber universe at about 42
percent, attributing interests in other MSOs, such as Cablevision Systems Corp.
That exceeds the 30 percent cap AT&T wants abolished.

'Companies that want to compete with monopolies shouldn't be under more
constraints than the monopolies themselves,' Armstrong said.

States News Service