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AT&T Hangs Up

Says It Will Pull Out of 7 States

June 23, 2004
AT&T says it is dropping attempts to sell traditional residential service in seven states. It blames the decision on a court decision that frees the Bell companies from being required to subsidize competitors.

AT&T says it will stop selling service in Arkansas, Louisiana, Missouri, New Hampshire, Ohio, Tennessee and Washington, though it says it will continue to serve existing customers. MCI is reported to be planning to exit the consumer telephone business altogether.

Nationwide, rivals to the long-time Bell telephone companies have signed up about 20 million customers, using government-mandated discounts on the copper wires owned by the Bell companies. The Supreme Court a few weeks ago ruled the practice was illegal.

The court's action leaves the Bell companies free to increase the rates they charge competitors who use their property.

AT&T, MCI and the other would-be local competitors blame their current problems on the "regulatory framework." But no regulatory agency or law stops the companies from building their own network to compete with those owned by the Bell companies.

Consumers left in the lurch by the fleeing long-distance companies aren't totally without choice. Cable companies are beginning to offer local and long-distance service and many consumers are finding they can make do with just a cell phone.

Even AT&T admits there are options. It is preparing a major push for its new Internet-based phone service. That service comes into homes over broadband cable or DSL lines; users connect to AT&T via the Internet.

AT&T says it has 4.3 million residential customers nationwide and 30 million long-distance customers.

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