Citing the potential for "deterioration" of telephone equipment services and hundreds of millions of dollars of added customer costs, American Telephone & Telegraph Co. yesterday asked the Federal Communications Commission for a major change in the FCC's landmark Computer II decision.
In a filing submitted lated yesterday, AT&T said the Fcc's plan to split the handling of customer equipment between existing Bell System companies and a new subsidiary mandated by the April FCC decision would "cause severe and insoluble practical problems."
The FCC decision, if upheld in an appeals court test brought by a computer trade group, would lift regulations as of March 2, 1982, from telephone equipment in a customer's home or business. But equipment already installed as of that date would continue to be maintained by existing Bell System companies, under the decision.
But AT&T said that under the system envisioned by the FCC, the traditional Bell companies and the new subsidiary, nicknamed "Baby Bell," would be sharing services valued at between $4.5 billion and $5 billion for just the first year of operations.
"These kinds of problems would be severe both for relatively unsophisticated residential customers and for business customers whose system are constantly being changed," AT&T said.
AT&T also said the shared costs could lead to charges of cross-subsidization, or the sharing of funds between the parent company and its newly formed subsidiary. These transactions would violate FCC guidelines which would prohibit direct links between the two firms.
This issue is particularly significant because the basic structure of AT&T under the FCC decision is predicated on the division of lines of responsibility between the parent company, offering traditional, regulated telephone services, and the new company, which will offer "enhanced" services, such as data-processing.
Setting up the fully separate subsidiary to offer these new services is designed to prevent AT&T revenues from ratepayers from going to unregulated servcies, theoretically giving the phone company an unfair competitive advantage.
AT&T asked the FCC to deregulate all customer-premises equipment on March 2, 1982, or shortly thereafter, saying that adoption of the current approach "could prevent achievement of the commission's fundamental purposes in this proceeding."
The dual system of regulating telephone equipment "cannot work for the Bell System. It would impose reduced levels of service on users of all categories of telecommunications and services," AT&T said.
"It would cause irreparable harm to the Bell System, and would prevent it from continuing to offer CPE [customer premises equipment] to a wide variety of customers," AT&T concluded.