Unleashing Ma Bell

Article Abstract:

AT and T is appealing to the FCC in hopes that the telecommunications giant will be able to reduce its prices and hang on to its clientele. When the telephone monopoly was broken up in 1984, the FCC regulated AT and T heavily to keep it from putting other long-distance telephone companies out of business. Since 1984, MCI Communications and US Sprint have grown so much that they now endanger AT and T's customer base. In 1988, the FCC allowed AT and T to switch to a price-cap system that lets the company adjust individual rates within in a narrow range. AT and T wants to be able to make big rate concessions to its largest customers and cut rates by more than five percent if it needs to in order to remain competitive with MCI and US Sprint. If the FCC agrees, AT and T will likely cut rates deeply, resulting in either another monopoly or unprofitability for the long-distance carrier.

Long-distance telephone service, Price cutting, Telecommunications Services Industry, Pricing Policy

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Competition in a hothouse

Article Abstract:

AT&T, which has lost business to US Sprint and MCI Communications, wants the Federal Communications Commission (FCC) to relax restrictions that date from AT&T's breakup in 1984. The Bush Administration supports AT&T's request, and FCC Chmn Alfred Sikes seems inclined to favor it as well. There has already been considerable movement toward less regulation of AT&T's activities and services: since 1989, services are grouped into baskets with caps on average prices in baskets, so that AT&T no longer is forced to ask permission to raise or lower individual tariffs. AT&T is also allowed to offer customized services to big customers at negotiated prices called 'Tariff 12' arrangements. But AT&T, which is still at a disadvantage, wants - among other things - an end to price controls on services to big businesses and freedom to add '800' number services to custom business packages.

Political activity

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Simulating competition

Article Abstract:

The US Federal Communications Commission (FCC) considers loosening its restrictions on AT and T and letting free markets protect consumer interests, but US Sprint Communications Co and MCI Communications Corp protest. Some critics maintain that US Sprint and MCI are profitable and capable enough to fend off the predatory competitiveness of AT and T. Industry analysts also mention that AT and T would not be able to gouge customers since the other major long-distance carriers have enormous investments in excess capacity and would be able to take away customers with lower prices. AT and T, as a dominant carrier, must currently obtain government permission to raise or lower rates by five percent or more.

Management, Sprint Corp., MCI Communications Corp., MCIC

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