AT&T Tries to Block Bell Atlantic Move


AT&T Corp. went to court last week in an effort to
protect its share of the lucrative New York long-distance market and to buy time for its
recently launched local phone service to gain market share.

Joined by digital-subscriber-line provider Covad
Communications Co., it asked the U.S. Court of Appeals for the District of Columbia
Circuit to stay a federal order authorizing Bell Atlantic Corp. to begin offering
long-distance telephone service in New York this Wednesday (Jan. 5).

On Dec. 22, the Federal Communications Commission approved
Bell Atlantic's long-distance petition, making the New York-based telco the first
regional Bell operating company to win such FCC approval.

The agency followed the next day by unceremoniously
rejecting AT&T's request for a stay of its order, declaring the company's
arguments had already been "fully considered and addressed by the commission."

AT&T raised the same arguments before the court of
appeals, insisting Bell Atlantic had not fully opened its local market to competitors as
required by Section 271 of the amended 1934 Communications Act.

As a result, the FCC resorted to "extraordinary
contortions to ignore or excuse" Bell Atlantic failures that would "stand in the
way of this first grant of long-distance authority" to an RBOC, AT&T said.

"Indeed, the FCC granted Bell Atlantic's
application in the face of the uncontradicted showings by the Justice Department and
others that Bell Atlantic is systematically discriminating in favor of itself and against
its fledgling local-service competitors," the AT&T filing stated.

Specifically, AT&T claims Bell Atlantic is delaying the
processing of orders and provision of service to residential and business customers who
signed on with its competitors, resulting in extended delays and service outages.

Analysts said last week that AT&T had little to lose by
seeking a court-ordered delay, but several said the company was unlikely to prevail.

FCC officials did not return phone calls seeking comment.

Bell Atlantic said it would respond to AT&T allegations
with its own court filing by noon today (Monday, Jan. 3).

"We feel like we've made our case before the
FCC," said Susan Butta of Bell Atlantic regional affairs. "Now we would prefer
to respond in the market, rather than in court."

AT&T's allegations are nothing new, according to
Butta. The points were repeatedly raised with the FCC and the New York Public Service
Commission, which endorsed Bell Atlantic's long-distance petition, she said.

In the meantime, the telco will hold a press conference
this week to announce the immediate launch of its first-ever long distance offering in New
York, Butta said.