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AT&T hangs up on some local plans

The long-distance phone giant cries foul and yanks two popular local dialing plans in Ohio after SBC gets approval to force the company to pay more.

Ben Charny Staff Writer, CNET News.com
Ben Charny
covers Net telephony and the cellular industry.
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Ben Charny
2 min read
AT&T said Wednesday that it has stopped selling two local telephone plans in Ohio because SBC Communications, whose local phone lines it leases, won state approval to charge more for the privilege.

In January, AT&T pulled its local dialing plans out of Indiana for similar reasons. AT&T spokesman Mike Pruyn said the company also faces rate increases in Illinois, Michigan, Wisconsin, California and Texas.

SBC is "trying to get their monopoly back," Pruyn said. "They are trying to kill local competition now that they are starting to get local competition."

An SBC representative described AT&T's claims as "an empty gesture designed to scare customers and intimidate policymakers" because AT&T has "never aggressively promoted these products and never intended to." SBC has argued in the past that it needs the rate increases to stave off losses incurred by Federal Communications Commission regulations that forced it to open up its local network for use by competition.

In Ohio, regulators recently let SBC charge $17.18 for every local phone line that long-distance providers lease and then resell to customers. The price increase of about $3 means AT&T is now paying SBC more to lease the line than what it actually charges customers, Pruyn said.

AT&T could increase its own local phone rates to make up for the added costs. But that would force the company to charge more than SBC does for local service in the same areas.

"Up until today, we charged $15 a month for unlimited local calls, and now we have to pay SBC $17.18 for every line," Pruyn said. "We think a lot of our customers, rather than paying AT&T $18.75 a month or so, would rather pay SBC $14.25 a month."

Sprint and WorldCom, which also sell local phone service by leasing lines from Bell operating companies such as SBC, did not immediately respond to requests for comment.