C. Michael Armstrong, chairman of AT&T Corp., took a
few potshots at regional Bell operating companies last week, calling for federal
regulatory agencies to reject merger deals between RBOCs.
In a speech to the Economic Club of Detroit last Tuesday,
Armstrong said the proposed merger deals between Ameritech Corp. and SBC Communications
Inc., and between Bell Atlantic Corp. and GTE Corp., "are not in the consumer's
interest and should be denied."
However, Armstrong was quick to tout his own company's
merger plans with cable-television giant Tele-Communications Inc. -- a $48 billion
acquisition that is currently before regulators. He cited the TCI deal as an example of
AT&T's commitment to invest whatever is needed to bring about local telephone
competition.
Susan Kraus, vice president of media relations for Bell
Atlantic, said Armstrong's comments were an indication of AT&T's growing
fear of competition.
"This is the same old AT&T, even with the new
management team," Kraus said. "They are constantly complaining to the government
and regulators to hide their own failures in the marketplace."
Armstrong, while against the Bell Atlantic/GTE merger,
saved the big guns for another proposed telephone alliance.
"In the case of SBC and Ameritech, we have the worst
of all worlds: two big companies coming together to advance their monopoly position,"
Armstrong said. "The SBC/Ameritech deal isn't one of those mergers with a few
anti-competitive edges that can be filed off during the federal approval process.
"When it comes to mergers between the Bells,
we've heard it all before," Armstrong continued. "We heard SBC promise
increased competition when it bought Pacific Telesis [Group]. It didn't happen. SBC
promised more market opening and competition when it announced its purchase of Southern
New England [Telecommunications Corp.]. It didn't happen. We heard Ameritech say that
it would compete with SBC in St. Louis. Now, SBC wants to buy Ameritech. Instead of
expanding competition, these two companies have found a way to expand their monopoly reach
and control."
Dave Pacholczyk, a spokesman for Ameritech, had some
equally harsh words for Armstrong's motivation.
"Coming from AT&T, this sounds rather
suspect," Pacholczyk said. "It sounds like they don't want anyone to be
real competition."
Pacholczyk added that although Ameritech does not agree
with Armstrong's assessment, the company does expect some regulators to be influenced
by his words.
"When Daddy Warbucks speaks, everybody listens,"
Pacholczyk said. "But I think that Mr. Armstrong is factually challenged."
