Even AT&T Can Suffer a Phone Glitch

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For anyone who has doubts about the level of difficulty
connected to launching telephony, consider this: Telecommunications veteran AT&T Corp.
recently had to step back from new product deployment in both its telephony and cable
divisions in the Dallas area when glitches hobbled service delivery.

Executives stressed that the problems were swiftly
diagnosed and corrected, but not before the problems went public. The company felt it
necessary to pay refunds to a group of core customers to redress the errors.

"It wasa serious problem," AT&T
spokesman Kerry Hibbs said, emphasizing the past tense.

He referred to a billing problem experienced by "a
couple of thousand" of the estimated 100,000 customers in the Fort Worth area.
AT&T's telephony division is reselling local calling services using the unbundled
network elements of SBC Communications Inc.'s Southwestern Bell.

AT&T launched the reselling operation in the summer of
1997, but it pulled back "because it didn't go well," Hibbs said. There were
problems with the network seller, he indicated.

AT&T resumed the resale operation last summer with
little marketing because the telephone company is still unsure if it can handle demand, he
added.

At the end of last year, AT&T plugged "some bad
data" into its computers, causing its traditional long-distance customers to be
charged long-distance rates for the new local service they had committed to. The inflated
bills hit early this year, raising howls from consumers.

The situation was exacerbated when customers couldn't reach
the company to complain. AT&T is launching local telephony, cable telephony and other
services, as well as wireless communications, in the same market. Customer-service
representatives couldn't handle the extra volume from the complaint calls, too.

But the operator acted fast. Hibbs said CSR troops have
been tripled from about 200 to 600.

"And rather than digging through everyone's bills,
we've given all local customers credit for their long-distance bills," he said. Some
customers will be dealt with on an individual basis for their November and December bills,
he added.

AT&T still has trouble switching over its customers
from SBC, according to Hibbs, which the providers will detail in a filing with the Federal
Communications Commission challenging claims by SBC that it has met all federal criteria
and it should be allowed into the long-distance business.

Deployment has not gone smoothly on the cable side, either.
AT&T Broadband & Internet Services completed an operational-readiness test in
suburban Carrollton over hybrid fiber-coaxial, then launched into a 30- to 60-day
market-readiness test, seeking assurances that they could provision their local customers.

But the cable division, too, had software problems with
customers it had lured away from GTE Corp. AT&T Broadband lost orders from about 100
customers, leaving them without any phone service for a few days in December.

"We worked it out, and we continue to work with GTE to
fix the software," AT&T Broadband spokeswoman Angel Biasatti said. The
inconvenienced Carrollton customers were provided with cellular phones until the problem
was resolved, she added.

The cable division has not concluded the market test, and
it moved on because "we are working methodically, diligently because we want
everything to be right," Biasatti said. Some loss of service "is unacceptable to
us," she added.

Once technicians are satisfied with the provisioning
technology, AT&T Broadband will launch its next market-readiness test, this time in
Frisco and Allen, Texas. Those should be launched quietly in the next 30 days, Biasatti
said.

Customers are solicited door-to-door and offered
"attractive discounts" for extra lines, family-calling plans or access to
long-distance providers in addition to AT&T, she added.

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