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AT&T to Stop Competing in Ohio
MORRISTOWN, N.J. -- AT&T will stop competing for local and long-distance residential customers in Ohio, Missouri, Washington, Tennessee, Louisiana, Arkansas and New Hampshire -- states comprising a population of nearly 38 million Americans, officials announced today.This action is a result of a June 9 decision by the Bush Administration and the Federal Communications Commission not to appeal a recent federal court decision that overturned FCC wholesale rules put in place to introduce competition in local markets. The reversal of local competition policy by the administration will permit the Bell companies to raise wholesale rates as early as November. This increase in wholesale rates means that AT&T will likely be unable to economically serve customers with the competitive bundles currently available.The administration's decision two weeks ago effectively eliminated pro-competition rules adopted by the FCC nearly 18 months ago, AT&T officials said. Without these rules, AT&T has been forced to reassess its ability to serve residential consumers in the other 39 states in which it provides local and long-distance service.Today's announcement to stop competing in seven states for residential customers is a result of that reassessment. AT&T will make further announcements as it continues its review."We foresee a future with less choice for consumers," said David Dorman, chairman and chief executive officer. "Competitive alternatives are simply not available today for most Americans," he added, "because as AT&T loses the ability to provide them with an alternative to the Bell companies, they will have virtually no choice of telecommunications provider."For the consumer market, the ability of a competitor to bundle a variety of services -- particularly local and long-distance service -- has essentially been eradicated by the June 9 decision, Dorman noted. Without an effective local product in its service bundle, AT&T foresees that it will not be able to effectively provide customers with a complete package of telecommunications services, he continued.Since the passage of the Telecom Act in 1996, almost 30 million lines, representing more than 20 million consumers and small businesses, are receiving local phone service from a non-Bell service provider. The company said it will continue to serve its existing residential customers in the affected states, and that its announcement today does not affect its enterprise, government and other small- and medium-sized business customers. It will also not affect customers with DSL and cable modem offerings who subscribe to the company's Voice over IP offering, AT&T CallVantage Service."