ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, February 16, 1996 TAG: 9602160096
SECTION: B-8 BUSINESS EDITION: METRO
DATELINE: DALLAS
SOURCE: Associated Press
BELL ATLANTIC says AT&T stifles competition by building equipment that is not compatible with other telephone systems.
Bell Atlantic Corp. and DSC Communications Corp. filed a $3.5 billion lawsuit against AT&T Corp., accusing the company of stifling competition by building important telephone equipment to incompatible standards.
The lawsuit, filed Wednesday in federal court in Texarkana, Texas, comes at a time when AT&T is entering the competition for local phone service and when regional phone companies, such as Bell Atlantic, are jumping into the long-distance fray.
The 28-page petition seeks damages and an order forcing the company to build its communication switching equipment to industrywide standards. It alleged the AT&T practice has raised costs for local telephone companies.
The lawsuit also accused AT&T of hampering Bell Atlantic's Caller ID, a system that lets phone customers know who is calling before answering. AT&T will not release long distance numbers, making the feature less marketable, the lawsuit said.
``For years, AT&T has been behaving in a monopolistic fashion,'' said Eric Rabe, Bell Atlantic's assistant vice president for corporate communications. ``At some point, you just reach a level when it has to stop.''
AT&T's Jim Byrnes said the company had not yet had a chance to study the complaint thoroughly.
``But from an initial review, it strikes us as specious,'' Byrnes said. ``It's incredible that anyone could claim monopoly practices in a market as fully competitive as the telecommunications equipment market.''
At the crux of the lawsuit are digital telephone switches, which Byrnes called ``the heart of the whole telecommunication network.'' The switches connect numerous individual telephones and offer software options to callers.
Philadelphia-based Bell Atlantic and Plano, Texas-based DSC said AT&T, through its equipment arm, Lucent Technologies Inc., has refused to build equipment that could be used with theirs and other companies' products. The lawsuit said the result has been less competition and increased costs.
AT&T makes 58 percent of the digital switches used in the United States; Northern Telecom, a Canadian firm, accounts for 32 percent. In 1984, the lawsuit said, Bell Atlantic bought 400 of these special switches for more than $3 billion.
Bell Atlantic and DSC, which also manufactures switches, said AT&T ``disabled and sabotaged'' the switches so that no one but AT&T can connect with or make software changes to them.
In 1986, AT&T said it was going to make industry standard connections available. But the Bell Atlantic suit alleged that the telecommunication giant waited until 1992 to do so, and even then the connections were designed to prevent outside vendors' equipment from properly working with AT&T.
In connection with Caller ID, the suit said AT&T has ``stripped'' the telephone numbers of long distance callers before connecting calls through Bell Atlantic computers. About two-thirds of all long distance calls are handled by AT&T.
Bell Atlantic said AT&T withholds the phone numbers to get people to answer their phones so it will be paid for the long-distance calls.
LENGTH: Medium: 64 linesby CNB