Baby Bells

AT&T's breakup 14 years ago and the enactment of the 1996 Telecommunications Act were intended to spur competition and innovation in the nation's telephone and telecommunications service. The proposed merger of two Baby Bell companies, SBC Communications Inc. and Ameritech Corp., raises the possibility that the nation won't fully realize the full benefits of telephone deregulation.Vigorous competition exists in certain telecommunications markets, such as long distance and wireless communications.

Ameritech Corp. yesterday became the first of the Baby Bell telephone companies authorized to offer statewide long-distance service in Maryland, in a move made possible by the federal telecommunications law enacted earlier this year.The state Public Service Commission yesterday approved the application of the Chicago-based regional Bell operating company, one of seven created by the 1984 breakup of AT&T Corp., to offer Maryland long-distance service.The consent decree governing AT&T's breakup had barred the Baby Bells from offering most long-distance services before the new federal law tore down that barrier.

The nation's regional telephone companies won a potentially sweeping victory yesterday as a federal judge in Alexandria, Va., toppled the legal barrier preventing them from competing head-to-head with cable television companies in their local operating areas.In a decision with immediate implications for Maryland, U.S. District Judge T. S. Ellis III ruled that a "draconian" provision of a 1984 federal law that barred a Bell Atlantic Corp. subsidiary from competing for a cable television franchise in Alexandria was unconstitutional.

Conflicting claims are nothing new in the aftermath of the breakup of AT&T. The "Baby Bells," former siblings in the telecommunications monopoly, have since the beginning argued for release from the restrictions U.S. District Judge Harold Greene wrote into his 10-year-old divestiture order: no long-distance service, equipment manufacturing or provision of information services.Others (including this newspaper) involved in businesses threatened by these regional oligarchs' ability to overwhelm companies not guaranteed the profits of a regulated monopoly have pushed just as strongly to keep the restrictions.

The City that Reads will have the first football team in history that was named for a poem.Yeltsin ordered a cease-fire. The Chechens didn't.When politicians fight over the schools, regardless of who wins, the kids lose, every time.If all the Baby Bells are going to merge, why did the courts go to the trouble of creating them?Pub Date: 4/03/96

WASHINGTON -- The seven "Baby Bells" -- regional telephone companies -- moved a step closer to entering the electronic publishing business yesterday after the Supreme Court turned down a challenge by potential competitors.In a brief order without explanation, the justices left intact a federal appeals court ruling lowering the legal barrier the Bell companies, including Bell Atlantic, must get over before they can start operating information data banks on their own.Electronic publishing, as the regional telephone companies want to offer it, involves generating, storing, altering, processing and retrieving information -- all via telephone access.

NEW YORK -- CBS Broadcast Group President Howard Stringer may leave the network to head a new interactive-entertainment venture being formed by three regional telephone companies, according to sources.Mr. Stringer, 52, is the leading contender to head the new company.Sources said Friday that once details of the offer are hammered out, he may go to CBS Inc. Chairman Laurence Tisch to ask to be let out of his contract, which has two more years to run.The trade paper Variety reported Friday that Mr. Tisch already has agreed to let Mr. Stringer go. But sources said the two executives have not yet held such a discussion, because the offer to Mr. Stringer from the Baby Bells has not been firmly negotiated.

The nation's chief telephone regulator yesterday blasted a recent court decision that could open the long-distance market to regional local-service phone companies.Federal Communications Commission Chairman William Kennard called the decision "unequivocally bad for the consumers of America."On Wednesday, U.S. District Judge Joe Kendall, in Wichita Falls, Tex., ruled that the Telecommunications Act of 1996 unconstitutionally prevents the regional local-service companies, known as Baby Bells, from entering the $80 billion long-distance market.

Here are answers from members of the Maryland Association of Certified Public Accountants to readers' tax questions. The Sun will publish answers through April 15.Q: While an employee of C&P Telephone, I became eligible, in 1975, to buy AT&T stock at a purchase price about 85 percent of the market value. The purchases continued until Jan. 1, 1984, when AT&T was broken up. At that time I was issued stock in the seven "Baby Bells," which I still hold. During 1993, I sold 156 shares in US West, receiving $7,400.

ATLANTA -- BellSouth Corp., in a first for a Baby Bell, said yesterday that it agreed to buy time on AT&T Corp.'s long-distance network.The three-year agreement, which brings BellSouth one step closer to providing long-distance phone services in its local phone markets, means that BellSouth won't team up with two other Baby Bells -- SBC Communications Inc. and Pacific Telesis Group -- to jointly buy long-distance time.It also means that BellSouth will be competing against AT&T in the $70 billion-a-year U.S. long-distance market in its Southeast region at the same time it is an AT&T long-distance customer.