AT&T Corp., the nation's largest long-distance telephone carrier, yesterday announced plans to plunge into the local telephone business in New York with a print, television and radio advertising campaign to be launched this weekend.
AT&T is raising the stakes as New York becomes the first state in the nation to see significant local telephone competition and as Bell Atlantic Corp., the local carrier that dominates the Northeast, awaits word from the Federal Communications Commission on whether it will be allowed to expand into the long-distance business.
Under the Telecommunications Act of 1996, former Bell monopolies are allowed to offer long-distance in their core markets only after proving they have unalterably opened the markets to competition. The FCC will decide--probably before Christmas--if Bell Atlantic is the first to clear that hurdle.
MCI WorldCom already claims about 200,000 local customers in New York, where it launched a mass advertising campaign this fall. Sprint Corp. launched TV and print ads Nov. 7. AT&T has already put a toe in the local waters, marketing service to existing long-distance customers. It has amassed some 50,000 customers, the company said.
Still, AT&T has led a chorus of companies that say the FCC should reject the Bell Atlantic application, arguing that Bell Atlantic does not process orders to change local service to a rival as quickly as it should.
In a statement yesterday, Bell Atlantic hailed AT&T's advertising launch--which will include TV, radio and newspaper ads and a billboard atop Times Square--as "another clear indication that the market is fully open to any competitor."
AT&T's entry into the field should not, in formal terms, alter Bell Atlantic's long-distance prospects. FCC officials have said repeatedly that they assess long-distance applications based on the market conditions that existed the day the paperwork was filed.
Nevertheless, AT&T's decision to aggressively market local service was seen by analysts as a clear sign that Bell Atlantic's approval to enter New York's long-distance market is all but assured.
AT&T is "the last player to the party," said Scott Cleland, a telecommunications analyst with Legg Mason Precursor Group. "Everybody else has been competing in New York. They've been holding out to strengthen their case that there isn't competition there."
Asked yesterday whether the decision to advertise amounts to an admission that Bell Atlantic's systems are ready for competition, Robert Aquilina, AT&T's president for eastern consumer markets, said Bell Atlantic continues to process rival orders more slowly than its own but can reliably switch over service within five days.
"We're experiencing pretty good completions of orders. . . . But we are absolutely not happy with the performance of Bell Atlantic at this date," he said.