The Federal Communications Commission yesterday struck down a requirement that American Telephone & Telegraph Co. operate its regulated long-distance subsidiary separately from its telecommunications equipment business, and AT&T immediately said it would begin joint marketing of services and equipment.
In a separate action, the agency also struck down a new AT&T calling plan, called Pro America, because it said the plan was not cost-justified.
Charles Marshall, AT&T executive vice president, called the removal of barriers between AT&T's regulated and competitive businesses "an important step toward loosening the regulatory restrictions that unfairly apply to us but not to our domestic and foreign competitors."
The company will be better able to control its costs, he said. AT&T long has called for removing the regulation, which had been put in place in 1980 to ensure that the company did not finance its entry into data processing with ratepayer money.
AT&T said yesterday it would not merge its telecommunications and computer equipment subsidiary, Information Systems, into its long-distance arm, AT&T Communications, and did not expect a "new downsizing" of the work force as a result of the FCC action. The company said, however, that it will form an integrated AT&T Information Systems and AT&T Communications account team to serve 10 business customers as a joint marketing test. The test will aid in determining how other large accounts will be handled starting in 1986.
The FCC said yesterday it would replace the separate-subsidiary requirement with a set of rules meant to prevent any possible use of ratepayer money to finance equipment or computer businesses. AT&T will be required to disclose information about technical changes to be made in the telephone network at the time such a decision is made to allow competing vendors to modify their equipment.
AT&T will be required to submit a detailed accounting plan to the FCC that would show how financial allocations are made between regulated and unregulated services. The company must submit to an annual independent audit under that plan.
The accounting method was criticized yesterday by competitors and consumer advocates as a virtually impossible way to gauge whether there are cross-subsidies.