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Date: Wed, 28 Feb 1996
From: Andy Oram <•••@••.•••>
Subject: AT&T lawsuit
Interesting that I haven't seen anything about this on the
Internet--have any of you? I found it browsing on the much-maligned
CompuServe.
This seems to be part of the "interconnection" issue that was so
important in the Telecom Bill.
Andy
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BELL ATLANTIC AND DSC COMMUNICATIONS CHARGE AT&T
WITH MONOPOLIZING TELECOMMUNICATIONS EQUIPMENT MARKET
Nation's Largest Telecommunications Equipment Manufacturer
Defendant in Federal Antitrust Suit
Texarkana, TX -- Charging that AT&T designs its telecommunications
switches specifically to prevent the interconnection of other
manufacturer's equipment, Bell Atlantic and DSC Communications filed a
lawsuit to recover nearly $3.5 billion in damages from the
telecommunications giant. AT&T has monopolized the market for both
equipment and software, as well as the market for Caller ID services,
according to an antitrust suit filed yesterday by the two companies.
"AT&T has Bell Atlantic over a barrel. Though we own a lot of AT&T
equipment, we cannot use it in the way that lets us provide the best
services to our customers. We just don't have a true choice," said
James R. Young, Bell Atlantic vice president and general counsel.
"DSC Communications provides aftermarket equipment and software with
superior features and functionality. If our customers use AT&T
central office equipment, they are unable to take full advantage of
our equipment's capabilities because of AT&T's monopolistic
practices," said George Brunt, DSC Communications' vice president and
general counsel.
According to papers filed in federal court in the Eastern District of
Texas, "AT&T is purposely delaying and preventing the utilization of
interconnecting plugs needed by vendors like DSC." This practice by
AT&T is the continuation of a "long history of resisting other
vendors' attempts to plug their equipment into AT&T's," the suit says.
The suit gives specific instances of AT&T keeping others out of the
market in this way. For example, in 1986, the telecommunications
industry agreed on an interface standard to connect other
manufacturers' equipment to telephone switches. Though the standard
was adopted by other switch makers, AT&T delayed and sabotaged the
idea for years and still today has not fully incorporated this
standard.
The lack of this standard has delayed services like ISDN (Integrated
Services Digital Network) which could have been provided more
cost-effectively had AT&T embraced this standard in 1986.
The lawsuit also charges AT&T has crippled the "Caller ID" service
that shows subscribers the number -- or name -- of the person who is
calling. Because AT&T sells a competing service, the suit claims,
AT&T intentionally blocked Caller ID information on most long distance
calls for years.
The Federal Communications Commission last year reviewed this issue
and ordered AT&T to stop blocking Caller ID information. The lawsuit
seeks to recover damages for the period when AT&T was engaged in this
illegal practice.
Under the provisions of the antitrust laws, AT&T is liable for damages
and injunctive relief to compensate Bell Atlantic and DSC
Communications for lost profits and increased operating costs.
DSC Communications Corporation is a leading designer, developer,
manufacturer and marketer of digital switching, transmission, access
and private network system products for the worldwide
telecommunications marketplace.
Bell Atlantic Corporation (NYSE: BEL) is at the forefront of the new
communications, entertainment and information industry. In the
mid-Atlantic region, the company is the premier provider of local
telecommunications and advanced services. Globally, it is one of the
largest investors in the high-growth wireless communication
marketplace. Bell Atlantic also owns a substantial interest in
Telecom Corporation of New Zealand and is actively developing
[a few lines got lost]
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AT&T DANGLES FREE OFFER AS IT BEGINS INTERNET SERVICE
__________________________________________________________________________
Copyright © 1996 Nando.net
Copyright © 1996 The Associated Press
NEW YORK (Feb 28, 1996 00:09 a.m. EST) -- AT&T Corp. splashed its way
into the consumer Internet business Tuesday by deciding to give its
long-distance customers free access to the global data network.
The free service is limited to only five hours per month, after which
customers will be billed $2.50 per hour.
Other Internet providers say most of their customers routinely log on
for longer than that. So the nation's No. 1 long-distance carrier has
a second offer: $20 per month for unlimited access for its
long-distance customers, or $25 per month for customers of other
long-distance companies.
The free service is available only for a year to people who sign up
during 1996.
The move represents a price challenge to other services, which
generally start with monthly charges of $5 to $10 and can range to
many times that for heavy users. It also represents another step in
the company's ability to combine several kinds of telecommunications
service.
Stocks of several Internet-related companies, including America Online
Inc., plunged on the news Tuesday. AT&T's own stock closed down $1 to
$64.
Eventually, AT&T will extend lower Internet pricing to people who use
its cellular service, too. The plan is typical of a bundling of
services that many telecommunications firms hope to do in the future.
MCI Communications Corp., the No. 2 long distance firm, has offered
Internet access for 18 months but marketed it mostly to businesses. It
charges $20 for 20 hours of use each month and plans no immediate
price changes, said Brian Brewer, vice president of business
marketing.
Meanwhile, the third-largest long distance firm, Sprint Corp.,
announced several new Internet services to businesses, including some
that allow people to easily use it for connecting to their office.
About 10 to 20 million Americans now use the Internet, chiefly through
work or school. Less than 10 million log on to any online service from
home and less than 2 million are Internet-only subscribers from home.
"We believe people, once they have the time to try out the Internet,
will find this a compelling and useful part of their lives," said Tom
Evslin, vice president of the AT&T WorldNet Service, which has also
provided Internet access to businesses for several months.
The company is taking orders from consumers immediately for WorldNet
Service but it won't be available until March 14. AT&T will market the
service chiefly to its 80 million long-distance customers and won't
spend much on outside advertising for it.
AT&T's access software for the Internet at first will only be
available for computers that run the Windows operating system but DOS
and Macintosh versions will follow soon, a spokesman said.
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AT&T'S INTERNET PLAN INSPIRES MIXED FEELINGS FROM INDUSTRY'S LEADERS
__________________________________________________________________________
Copyright © 1996 Nando.net
Copyright © 1996 The Associated Press
NEW YORK (Feb 28, 1996 6:39 p.m. EST) -- AT&T Corp.'s plan to offer
free Internet access will bring more computer novices into cyberspace
but also escalate a brutal marketing battle, leaders of the largest
online companies said Wednesday.
Meanwhile, shares in major online providers fell sharply again for a
second straight day as investors continued to worry about AT&T's
thundering entry to the consumer Internet business.
Speaking at an industry conference, leaders from America Online,
CompuServe, Microsoft Network and Prodigy said AT&T's well-known brand
name will help familiarize more people with what online services and
the Internet can offer.
"I think AT&T gives consumers trust," said Ted Leonsis, president of
America Online, the biggest online service.
But they also said it would be difficult to match AT&T's offer,
announced Tuesday, of five free hours of Internet access a month. AT&T
will extend the offer to its current long distance customers when its
Internet service begins March 14.
The company will charge an hourly fee for people who use more than
five hours a month but it will also offer unlimited access for about
$20 a month. Customers of other long distance firms will be charged
slightly more.
AT&T's plan threatens the online firms because its costs for marketing
and signing up new customers will probably be lower and its reputation
for service may outclass them.
Both issues are important because, while about 8 million Americans are
now signed up for online service, the market is very volatile. Many
customers change services or abandon them altogether if they are
dissatisfied.
"We as an industry have to do a much better job about attracting and
retaining a stable audience," said Scott Kauffman, general manager of
the Wow! online service that CompuServe will start next month. Wow! is
designed to be simpler to use than its main online product.
The AT&T threat weighed on the stocks of Internet service providers
for a second day Wednesday.
UUNet Technologies shares fell $3.37 1/2 to $28.62 1/2, PSINet Inc.
fell $1.75 3/4 to $9.37 1/2, NetCom On-line Communications dropped
$2.37 1/2 to $20.37 1/2.
America Online, the only stand-alone commercial online firm, was down
$1.75 1/2 to $47.37 1/2. AT&T shares were unchanged at $64.
The hand-wringing over AT&T contrasted with the acrimony directed at
Microsoft Network general manager Russell Siegelman a year ago at the
same industry conference, sponsored by Jupiter Communications, a New
York market research firm.
The other online companies at that time were upset with Microsoft's
plan to combine the Microsoft Network operating software with its
Windows 95 program. That anger has subsided as MSN has failed to grow
as quickly as the competitors feared, though, with 850,000 subscribers
in seven months, it is the fastest online start-up ever.
All four companies earlier this week joined other technology
companies, library, journalism and publishing organizations in a
lawsuit to overturn an online indecency provision in the new
telecommunications law. The law makes it a criminal act to transmit
"patently offensive" language or material over electronic networks.
"This is the biggest black cloud that hangs over all of us," said Ed
Bennett, president of Prodigy. "No one can tell us to our satisfaction
what (offensive) means. No one can tell us to our satisfaction who's
going to define this."
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