FCC May End Long-Distance Curbs on AT&T; : Utilities: The market is competitive enough to allow the phone giant to change some rates faster and bid on big contracts, regulators say.

The Federal Communications Commission on Thursday voted to consider removing most federal restraints on American Telephone & Telegraph’s long-distance phone services, saying “significant competition” now exists in the market.

The FCC vote was a big preliminary victory for AT&T.; Under the plan adopted, the FCC will consider allowing AT&T; to file rate changes for business customers on just one day’s notice. Secondly, it would lift certain restrictions that now make it difficult for AT&T; to bid on contracts for big businesses.

Currently, the company’s competitors are free to raise or lower prices at will, but AT&T; must justify any rate changes to the FCC, proving it is not selling below cost to capture business.

Many of AT&T;’s competitors expressed fears Thursday about the proposed move, saying an unfettered AT&T; could swamp the other 500 firms struggling for a share of the $55-billion-a-year long-distance business. They noted that AT&T; is the colossus of the market, with a 70% share.

FCC Chairman Alfred C. Sikes, discussing the 4-0 decision, said the entry of new firms in the long-distance field makes it possible to consider easing restrictions on AT&T.;

The FCC will now call for a 90-day period for comments. The changes could go into effect by next January.

The commission proposed that AT&T; be allowed to file price changes “on one day’s notice and without submitting the cost data now required.” This would apply only to business services. AT&T; would still be subject to the stringent regulatory process of winning approval for any new rates for residential customers.

The commission said it was persuaded to consider the regulatory changes because some of AT&T;’s rivals “have constructed modern, nationwide, high-capacity transmission networks that enable them efficiently to serve large numbers of customers and to compete vigorously in the marketplace.”

AT&T; applauded the FCC proposal. “Today, the FCC took a major step toward shaping policies based not on outdated orthodoxy but on future flexibility in one of this country’s most dynamic industries,” the company said in a statement.

But the Competitive Telecommunications Assn., with 120 members selling long-distance services, had a very different view.

“The FCC is saying, ‘Show us why AT&T; should not be deregulated soon.’ And we intend to show them,” said James Smith, the association’s president.

“Such proposals are very premature. There is competition, but it is still very fragile.”