American Telephone & Telegraph Co., joined by smaller telephone companies across the nation, yesterday proposed a four-point plan to Congress that would totally restructure reguation of interstate telecommunications services.
As drawn up by an industry task force, yesterday's proposal would limit future competition by communications companies for intercity telecommunications services.
As drawn up by an industry task force, yesterday's proposal would limit future competition by commications companies for intercity business services and eliminate many such services that now exist.
The proposal was denounced immediately by Bell System competitors. Herbert N. Jasper, executive vice president of the Ad Hoc Committee for Competitive Telecommunications, called the plan "merely the latest step in a 14-year program of obstruction."
And William McGowan, chairman of Washington based MCI Communications Corp., a competitor of AT&T for business services, described the plan as "a typical, arrogant attempt to perpetuate a monopoly under the guise of competition . . ."
AT&T executive vice president James E. Olson contended that the industry's suggestions represent an "attempt to strike a public-interest balance between the divergent interests of the average customer and the specialized user, such as a large business customer."
This "balance" would be achieved by establishing four categories of interstate services:
Regular local and long-distance service would continue to be provided by the regulated telephone industry, such as AT&T and Continental Telephone Corp., a big supplier of telephone services in Virginia. Long-distance rates would continue to be priced on a nationwide "averaged" basis, to keep rural and basic local service costs down.
This provision would bar an MCI business service called Execunet, which AT&T and the Federal Communications Commission are attempting to halt.
Special communications networks connecting various locations of a customer - such as diverse plants of one company - would be provided by a specialized carrier, the regular telephone firm or the company itself.
But these systems could be connected to the natioanl telephone network only at customer locations such as office switchboards. In effect, this provision would require large users to have their own local switching network to connect with intercity competitors of AT&T - a facility few customers have or could be expected to build, Jasper said.
A separate category would cover private communications systems not connected to the nationwide telephone network - provided by any carrier or the customer. Such private-line connections have not been expected to be a major part of intercity communications services, however.
Certain terminal equipment and systems, such as switchboards and telephones at customer locations and mobile radio, would continue to have direct access to the national system, a provision without significant opposition.
AT&T and the smaller telephone companies, which share long-distance revenues, also called for a transitional period during which current services that do not fit into the new framework would be phased out gradually.
One such service would be so-called "foreign exchange" under which customers use an intercity line and then may be connected with telephones at the distant exchange - a service pioneered by AT&T itself but one with which competitors have been successful.
The proposals were sent to Sen. Ernest F. Hollings (D-S.C.) and Rep. Lionel Van Deerlin (D-Calif.), chairman of congressional communications subcommittees. In effect, yesterday's plan modifies the proposed Consumer Communications Reform Act, the so-called "Bell bill," which the telephone industry has been backing for two years in an effort to trim FCC-mandated competition.
Signing the proposal were top officials of AT&T, Continental, United Telecommunications, General Telephone & Electronics Corp., U.S. Independent Telephone Association, National Telephone Cooperative Association, Central Telephone and Utilities Corp. and the Organization for the Protection and Advancement of Small Telephone Companies.
Olson of AT&T called the suggestions "a framework rather than a fully detailed plan . . . a good-faith effort to reconcile conflicting goals . . ."
Warren B. French, president of the Shenandoah Telephone Co. in Edinburg, Va., with 11,000 customers, said the proposal recognizes "the place of both the telephone companies and their competitors" and would benefit consumers in his community.
Spokesmen for competitors of AT&T contended, however, that yesterday's plan would reduce their potential business base to perhaps 20 per cent of the existing interstate business market - estimated at more than $1.2 billion a year and now dominated by AT&T. Competitors of AT&T this year expect revenues of less than $100 million from this market.
Jasper, whose organization represents most specialized intercity communications firms, said the telephone industry task force plan "would drastically curtail the existing competition which the FCC and the courts have repeatedly found to be in the public interest. Just as surely as the Bell bill, it would put our companies out of business."