AT&T Smokescreen of the Day
February 11, 1998
AT&T SMOKE DETECTOR
"Dedicated to truth, justice,
and the disclosure of AT&T's
The Smoke Detector from Bell Atlantic is designed to give you early warning anytime "smoke" shows up in the advertisements, press releases or public statements issued by companies determined to keep Bell Atlantic from offering long distance service to cus
tomers in New York. It will help detect and shed light on the inflammatory disinformation coming from some big telecommunications companies every day.
February 11, 1998
The following claims are made in an AT&T-led advertisement in yesterday's New York Times.
AT&T CLAIM: The advertisement is sponsored by the NY Consumers for Economic Competition.
FACT: AT&T's ploy to hide behind a shell-group to cover their misleading advertising is not a new stunt. Following a similar ad by the NY Consumers for Economic Competition in July of last year, the New York Times reported that the group and the
ad were financed entirely by the AT&T Corporation, prompting Robert Ceisler of the Citizens Utility Board to say "If the powers that be see that this is a front group for the long-distance industry, it doesn't make our job any easier."
AT&T CLAIM: Bell Atlantic is talking about progress in competition that isn't actually occurring yet.
FACT: There is competition in Bell Atlantic's market in New York and it is real.
In New York alone, Bell Atlantic has:
- 34 interconnection agreements with competitors;
- over 19,600 unbundled loops being used by competitors;
- 121,600 interconnection trunks currently in operation;
- 121,200 re-sold lines.
We carry more traffic between Bell Atlantic and our competitors than all the phone traffic in Vermont and Washington, DC combined.
The FCC just declared that new local exchange carriers' revenues are growing faster than those of incumbent local exchange carriers, despite having a smaller market share, in a new report on telephone trends.
Companies such as Teleport are competing in our region and around the country, and the fact that Teleport reported year to year growth of 89 percent in October 1997 and was recently acquired by AT&T, shows that it is paying off. Would AT&T spend
$11.3 billion on a company that couldn't be competitive?
Companies such as Teleport that want to compete can and they have the economic incentive to do so. According to Dan Reingold at Merrill Lynch, market share for all new entrants will nearly double in 1998 to 5.1 percent from 2.6 percent. And the market
share for facilities and resale-based providers will grow from $2 billion in 1997 to $5.4 billion in 1998 and $8.5 billion in 1999.
AT&T CLAIM: Market share is the test of how competitive the local phone market is.
FACT: Not true. The authors of the Telecommunications Act expressly rejected the argument that the test for competition in the local market should be market share. Instead, Congress required local phone companies to show that they opened their mark
ets to competition. In New York State, Bell Atlantic has met the 14-point checklist required in the Telecommunications Act and has irreversibly opened its local markets to competition. As everyone knows, you can bring a horse to water, but you can't make
And, the fact is that there is competition in New York. Bell Atlantic has interconnection agreements with over 30 companies in New York State, including AT&T, MCI and Sprint. If AT&T or any other company is not competing in local phone service,
it is not because they can't, it is because they won't. It is AT&T's strategy to try to keep Bell Atlantic out of the long distance market, by not getting into the local residential market.
And when AT&T and the vast majority of the competitors have entered the local phone market it had only been to offer service to more lucrative business customers. In fact, in acquiring Teleport, AT&T Chairman and CEO C. Michael Armstrong stated t
hat "joining forces with Teleport will speed AT&T's entry into the local business market..."
AT&T CLAIM: Bell Atlantic is throwing roadblocks in competitors' way.
FACT: AT&T's claim is not backed up with any facts or specific allegations. AT&T has signed an interconnection agreement with Bell Atlantic; signed up to benefit from Bell Atlantic's long-term local number portability service (LNP), which wi
ll allow customers to change their local phone company without changing their phone numbers; and recently acquired a viable local phone provider in Bell Atlantic's region.
AT&T CLAIM: According to the advertisement, the Consumer Federation of America (CFA) said in a report issued January 18, 1998 that, "Bell Atlantic has adopted policies to protect its private interests that may make it impossible for the local telepho
ne market ever to be irreversibly open to competition."
FACT: In the same report, the CFA also said of Bell Atlantic's efforts to open its markets to competition that, "It is clear on the basis of the record in New York that, unlike the vast majority of states, significant effort has been made to open t
he local network to competition."
And even more recently, a CFA representative was quoted in the Washington Post on February 7, 1998 saying that "I see the possibility by the end of the year of Bell Atlantic being in long distance in New York. Everyone believes that because the forces ar
e fully arrayed there...the competitors are all there."
AT&T continues to run a public campaign of inaccuracies and intentional misstatements. This "Smokescreen" is an attempt to divert attention away from the fact that AT&T has a failed strategy for entering local markets.