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AT&T CHAIRMAN ROBERT ALLEN FAVORS TESTING COMPETITION IN LOCAL TELEPHONE MARKETPLACE

 AT&T CHAIRMAN ROBERT ALLEN FAVORS TESTING COMPETITION
 IN LOCAL TELEPHONE MARKETPLACE
 CHICAGO, Oct. 15 /PRNewswire/ -- AT&T (NYSE: T) Chairman Robert Allen, in a speech tonight to the Economic Club of Chicago, called on federal and state regulators to give competition in local telephone markets a "full and fair test."
 For many years, Allen said, the U.S. communications network was regulated as a natural monopoly, but in recent decades, parts of that fabric -- phones and PBXs, then long distance -- were "cut out of the tapestry."
 In each of these sectors, Allen said, "the benefits and economies of competition have come clear. The last remnant, however, is the local exchange.
 "Resolving the question of natural monopoly in the local exchange may be the most difficult of all," he said, adding that the marketplace should decide the issue, rather than only the judgments of regulators, legislators or industry leaders.
 "What's needed is to test competition in the local exchange on the anvil of the marketplace -- under rules that promote it, but monitor its impact; that measure the benefits and count the social and economic costs," Allen said.
 Meanwhile, he said AT&T supports legislation introduced by U.S. Rep. Jack Brooks (D-Texas) that restricts local phone companies from the long distance and telecommunications manufacturing markets, but sets measures to eliminate restrictions when the local monopoly gives way and competition rules.
 "The task facing the communications industry -- both the companies involved and the regulators -- is to let go of the unnecessary trappings of the past and embrace the future as quickly, as courageously and as wisely as we can," Allen said.
 Allen said technology is bringing sweeping changes to the telecommunications industry, making possible many exciting new products and services that will change the way businesses and people around the world will work and live.
 Among the "glimmers of...changes to come" are personal communications devices small enough to fit in your hand that will allow users to exchange handwritten electronic messages and communicate by voice and video.
 "As far as we have come, we are still in the foyer of the information age where increasingly intelligent terminals and networks, wire and wireless, will transform our lives -- the way we work, the way we get information, the way we learn, the way we receive medical services, the way we shop and bank, the way we socialize and entertain ourselves," Allen said.
 "The communications market is a boiling sea of change, with rising waves of new technology, surging customer expectations, and swells of entrepreneurs eager to be part of the new age."
 As examples of the change, Allen cited new communications companies, cable TV companies and publishing companies, all seeking new ways to serve business customers or people in their homes with a wide array of new services.
 The forces of change pose challenges both for companies that provide communications services and products and for regulators, Allen said, noting that the Federal Communications Commission (FCC) recently introduced some competition in the local exchange by ordering local phone companies to allow special service providers to connect to local phone networks.
 Meanwhile, the long distance market has experienced eight years of competition. Since the old Bell System was split in 1984, competition has brought drastically lower rates and innovative new services, Allen said. Today there are a handful of major competitors and several hundred smaller players.
 "I welcome the spur of competition," Allen said. "The pressure has made AT&T move faster.... We've become focused on customer needs. Competition has made us a better, more nimble company."
 But the FCC should complete the job it started eight years ago and remove the remaining regulatory restrictions aimed only at AT&T, Allen said. "Regulators quit 30 yards short of the goal line" and the FCC continues to "pin AT&T down" with outmoded rules that Allen called "wacky."
 For example, he said, only AT&T must disclose new services six weeks before introduction, only AT&T must demonstrate a new service or product will turn a profit, only AT&T must seek permission to change its prices, and only AT&T is banned from offering some innovative services that package incoming and outgoing calls.
 -0- 10/15/92/2000
 /CONTACT: Andrew Myers in New Jersey, 908-221-2737, or home, 908-522-9485; or Stacy Verne Dixon in Chicago, 312-230-4891, or home, 312-881-1895, both of AT&T/
 (T) CO: AT&T ST: New Jersey IN: TLS SU:


GK -- NY078 -- 0515 10/15/92 14:26 EDT
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Date:Oct 15, 1992
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