AT&T; May Have to End Its Local Phone Service

AT&T; Corp. may have to stop offering local phone service in New York and Texas because of the high cost of leasing lines from the regional Bell companies, Chairman Michael Armstrong said. Armstrong’s comments came just a day before the five-year anniversary of a sweeping telecommunications law that was intended in part to bolster competition in the local phone market. But the AT&T; chief, speaking at the National Press Club, accused the nation’s four Bell companies of maintaining a stranglehold on the phone lines going into consumer homes. “If competing doesn’t make business sense, it’s not going to happen no matter how many laws are written,” Armstrong said. He contended that the price his company pays to the Bells is so high that AT&T; cannot make money when it turns around and sells local service to consumers. The United States Telecom Assn., which represents the Bells and other phone companies, bristled at Armstrong’s remarks, saying AT&T; came in to the local service game late and is not providing customers with real choices. It also said state regulators, not the local phone companies, set the wholesale rate at which lines are leased to competitors.