AT&T; Asks Baby Bells, GTE to Sell Its Service

AT&T; Corp. is offering to market its long-distance service through the nation’s local telephone companies, just five days after suing two Baby Bells to block a rival’s similar deal.

Basking Ridge, N.J.-based AT&T; disclosed Wednesday that it approached all five Baby Bells and GTE Corp., another seller of local phone service, with its proposal.

Last week, AT&T;, MCI Communications Corp. and other long-distance phone companies sued Ameritech Corp. and US West Inc. to stop them from jointly marketing the long-distance service of a smaller rival, Qwest Communications International Inc.

The suit by AT&T; and others alleged that Ameritech and US West are violating the Telecommunications Act of 1996, which bars Baby Bells from offering long-distance service in their regions until they show their markets have been open to new competition for local phone service. So far, none of the five Baby Bells have passed muster with the Federal Communications Commission for offering long-distance service.

But US West and Ameritech insist they are merely acting as sales agents for Qwest’s long-distance service and not getting into the long-distance business themselves. The companies plan to combine the long-distance service on the same bill with their local services.

Chicago-based Ameritech said through a spokesman Wednesday that it had already asked 200 companies, including AT&T;, to join it in such a marketing agreement. Denver-based Qwest was the only company to accept the offer, Ameritech said. Ameritech said it was preparing a response to AT&T;’s offer.

A spokesman for Denver-based US West did not immediately return a phone call.

AT&T; Chairman C. Michael Armstrong faxed a letter late Tuesday to the five regional Bells and GTE requesting that AT&T; be allowed to enter into the same arrangement with them as Qwest.

Armstrong told reporters Wednesday that AT&T;’s letter was not at odds with the spirit of its lawsuit. He insisted AT&T; was sincerely interested in the proposed arrangement.

“I don’t find the credibility of AT&T; is at stake at all,” Armstrong said at a briefing with reporters.

Armstrong said he has not yet heard back from the Baby Bells. The other three Baby Bells are Bell Atlantic, BellSouth and SBC Communications.

AT&T;’s shares surged 3% in heavy trading on the New York Stock Exchange, closing up $2.44 at $58.88.