AT&T drops markets in seven states

The states where the carrier will stop soliciting new business are Ohio, Missouri, Washington, Tennessee, Louisiana, Arkansas and New Hampshire. The move comes in the wake of a decision earlier this month by the Bush administration not to appeal a federal court ruling that set aside Federal Communications Commission rules on competition in local markets.

"We foresee a future with less choice for consumers," David Dorman, chief executive of AT&T, said in a statement. "Competitive alternatives are simply not available today for most Americans, 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."

The new rules allow local carriers to increase the price at which they lease their networks to long-distance carriers like AT&T. This increase, AT&T said, will make its service too expensive. The Bush administration recently urged the FCC to draw up interim competition rules to ward off a likely rise in local phone charges.

Some industry watchers said the earlier set of rules were necessary to ensure a level playing field among companies that offer services over local telephone wires and switches owned by Bell companies--Qwest Communications International, Verizon Communications, SBC Communications and BellSouth.

AT&T said it will continue to serve existing residential customers in the seven states and its decision will not affect nonresidential customers and those using other services, such as DSL (digital subscriber line), cable modem and VoIP (voice over Internet Protocol).

The company said it is reviewing its position in 39 other markets and will announce decisions as it completes its review.