American Telephone & Telegraph Co., in a move that may give it a significant advantage over scores of competitors, announced yesterday that it has reached agreements with several other telephone companies that could permit the telecommunications giant to begin operating a revolutionary portable telephone system in the nation's largest cities within the next 18 months.
The agreements, if untouched by court challenges, will enable AT&T and the nation's second largest telephone company, General Telephone & Electronics Corp., to begin operating what by all accounts promises to be a highly lucrative service long before any of their competitors will have received government permission to begin offering similar service.
AT&T's announcement came the same day the Federal Communications Commission announced that nearly 200 applications have been filed for a total of 60 licenses for this new service in the nation's top 30 cities. Telephone companies accounted for 52 applications; non-telephone companies, ranging from large broadcasting firms such as Metromedia Inc. to small local consulting firms, filed a total of 144 applications.
The new portable "cellular" telephone service promises better service for consumers because it will permit thousands of consumers to be part of a mobile phone system. Currently, mobile phone systems, which use high-power transmitters to cover a whole city area, are so overloaded that would-be customers are on six-to-seven year waiting lists for a sevice. The new cellular system uses low power transmitters and rapid call-switching equipment to handle thousands of calls simultaneously rather than the score of calls that can be handled at one time on current, high-powered systems.
The FCC plans to approve two cellular systems for each city--one to be owned and operated by a telephone company, the other by a non-telephone company.
ATT's agreements will leave non-telephone companies fighting against one another at lengthy and costly FCC hearings to gain the rights to operate a system, while AT&T or GTE will be launching their systems, since the companies have negotiated agreements to avoid the competitive hearings. However, court challenges from non-telephone companies are likely, with those firms seeking stays until they are granted a license, arguing that AT&T's leg-up would be anticompetitive.
As a result of this agreement, AT&T will operate one cellular system in the Washington area. Five other companies are vying for the other license:
* American Radio Telephone Service Inc. which is already offering cellular service here on an experimental basis.
* The Washington Post Co.'s Cellular Telecommunications Inc., which also applied in Baltimore and Detroit and is part of a joint venture application in Miami.
* Metropolitan Radio Telephone Systems Inc., a new Washington consulting firm that specializes in cellular radio.
* Metro Phone Associates, a joint venture between Metromedia Inc. and the Alexandria paging and mobile-radio company Advance Radio Communications Co.
* Cellular Mobile Systems of D.C., Inc., a wholly-owned subsidiary of the fast-growing telecommunications company Graphic Scanning, which has applied for licenses in all 30 cities.
Under the AT&T agreements, a newly formed Bell System subsidiary, Advanced Mobile Phone Service Inc., will hold a majority interest and will operate cellular systems in 23 cities.