AT&T; Gets a Break on Notification Rule

The Federal Communications Commission on Thursday loosened some of its regulatory hold on American Telephone & Telegraph, reducing by a month the amount of advance notice that it must give the government and competitors before lowering prices for large corporate customers.

The commission’s unanimous vote was a major victory for the nation’s largest long-distance company, which had argued for years that the current 45-day notice requirement gives an unfair advantage to its competitors, who are not required to file advance notice of price changes. The commission also reduced the amount of information AT&T; must make public when it files for price changes.

“We were being reviewed as though we were still a monopoly,” said Thomas Norris, AT&T;’s vice president for federal regulatory affairs. “The process had become an anachronism.”

However, analysts said, the commission’s action probably will have little immediate or direct impact on customers, because virtually every AT&T; pricing and service move will still be subject to some degree--albeit declining--of regulatory review. Furthermore, the action does not resolve the issue of when, if ever, the FCC will drop its regulation of AT&T; and let the marketplace decide the fate of long-distance phone rivals.

“Someday there will truly be a level playing field in long-distance service,” said William Davidson, a USC business professor. “But when that will happen is still a matter of astrology.”

The FCC said that “in light of increased competition” such advance scrutiny of AT&T; pricing was no longer needed.

About seven years after the court-ordered breakup of the Bell system, AT&T; is still by far the dominant player in the long-distance market, with about two-thirds of that business in the United States.

Some members of Congress and the FCC itself have repeatedly said that without continued regulation, AT&T; could regain its lock on the long-distance market, and the FCC affirmed that position again Thursday by denying AT&T;’s request to bundle its 800 telephone service along with its other offerings to businesses. The commission said AT&T; could not package the 800 service with other products until other companies can effectively compete in that market.

At the same time, the FCC gave the regional Baby Bell phone companies and GTE 18 months to employ sophisticated computer switching equipment that will allow customers to keep their same 800 numbers if they change long-distance companies. They cannot now do that, and the FCC said that has made it difficult for smaller carriers to win that business away from AT&T.;