AT&T to provide service

INDIANAPOLIS -- Regulators had hoped that letting AT&T provide local residential phone service would spur competition, and on its first day in the market the company debuted a plan that undercut its major rivals' prices.\n"There's no doubt that consumers will benefit from this," said Patrick Comack, a telecommunications analyst at Guzman & Co.\nAT&T is offering a plan for $26 a month that includes caller ID and two other features. A comparable plan from local phone service provider SBC is $30.\nSBC, however, maintains that its rival is benefiting consumers at SBC's expense, by renting SBC's network at reduced wholesale rates to deliver its local service.\n"The current rates don't even recognize half the cost that SBC incurs in providing the service to competitors," said SBC spokesman Mike Marker. "But what's unfair about this regulatory environment is that SBC is forced to provide its network at far below cost."\nThe Indiana Utility Regulatory Commission drastically cut the company's one-time switching fee from $102.50 to 37 cents last year. Competitors had said the fees presented too great an obstacle to opening up local phone service in Indiana.\n"If you look at Ohio, Illinois and Michigan, their wholesale rates are on par with Indiana," said AT&T spokesman David Doty. "If Indiana's prices are unfair, then we'd have to conclude that all those four state commissions got it wrong."\nMeanwhile, SBC, the former Ameritech, has been lobbying state legislators to pass a bill that would increase the fee competitors pay for access to its network. A hearing on that bill is scheduled for Wednesday.\n"If the wholesale rates are increased, we'd have to seriously consider whether or not to stay in the market. But we'd never abandon our customers," said AT&T spokesman Mike Pruyn.\nIndiana ranks 26th among the 36 states that report to the Federal Communications Commission on local phone competition, according to an FCC report released on Dec. 9. The report, based on information collected as of June 30, states that SBC and Verizon still control 97 percent of Indiana's residential and small-business lines.\nSBC has been seeking to enter the state's long-distance phone market, but the IURC said the company could offer long-distance service only if the state is satisfied that its network is open to competitive carriers.\nThe company filed a federal lawsuit challenging that order in November.\n"If you want to claim that there should be more competition in local phone service, then there should be more competition in long distance, too," Marker said.\nThe IURC also has been reviewing a proposal submitted in May 2000 to split SBC's Indiana operations into two separate companies.\nUnder the proposal, initiated primarily by AT&T, SBC Indiana would be split into a retail unit handling phone service and a wholesale subsidiary overseeing the phone network and competitors' access to it.