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AT&T Competes with SBC for Wisconsin's Local Residential Phone Service

Posted on: Sunday, 13 July 2003, 06:00 CDT

Jul. 11--AT&T has started offering local residential telephone services to SBC customers in Wisconsin, a move consumer advocates say will increase competition in a market dominated by SBC.

AT&T's decision to begin service Thursday came a day after the state Public Service Commission set wholesale network rates at which SBC must lease its infrastructure telephone lines and switches to competitors.

"After years of pressing for competitive wholesale rates that would allow us to enter, today we are announcing our entry back into the local market," AT&T senior vice president Kevin Crull said in a teleconference Thursday. "Finally, Wisconsin residents can choose a local service provider the way that they choose and shop for any other competitive service."

AT&T will pay any fees for switching customers to the company, Crull said. And in most cases, phone numbers will remain the same.

AT&T local service customers are not required to use its long distance services, he said. Packages range from basic service with no extras at $14.95 a month to a package that offers unlimited local and long distance calling for $49.95.

AT&T does not currently offer high-speed Internet cable services in Wisconsin, Crull said.

The Chicago company has long been a provider of long distance and business telephone services in the Midwest. But over the last year, AT&T started offering local residential phone services in Midwestern states, spokesman Mike Pruyn said.

AT&T entered the Michigan market in February 2002 and Illinois and Ohio in June 2002. In January, it entered the Indiana market. Wisconsin is the 13th state in which AT&T will offer local telephone service to households.

"(Wisconsin) is attractive because it's an important market for us," he said. "It's the only state in the Midwest where we are not offering local residential service."

AT&T is targeting the region already served by SBC, an area that stretches from Janesville to Milwaukee, Appleton, Green Bay and Eau Claire and down to Madison. It does not include Wausau, La Crosse or Superior.

Crull wouldn't speculate on how much of Wisconsin's market the company aims to capture, but said he was optimistic that the company's presence would be felt relatively quickly.

"In just five months after we entered SBC's territory in Michigan we served 6 percent of that area," he said.

Steven Hiniker, executive director of the watchdog organization Citizens' Utility Board, said news of AT&T's move into Wisconsin is no surprise.

"I think it's been part of their business plan for some time," he said. "The more the merrier. I think it's good that there's another choice for consumers."

Crull said increased competition has historically resulted in lower prices for consumers in a relatively short period of time.

"It's offering what competition should bring: more options and better prices for customers," predicted PSC commissioner Bert Garvin.

TDS Metrocom, a Madison company that also competes for SBC customers in urban areas, welcomed the competition, but noted differences in services.

"We are happy they are here," said Drew Peterson, TDS director of legislative affairs. "They are going to do heavy marketing and we stand to benefit from that. It reminds consumers that they have a choice in local phone providers."

TDS Metrocom, which serves about 175,000 residential lines in Wisconsin, uses a minimum of SBC infrastucture and its own switches and fiber optic cable, Peterson said.

AT&T's announcement prompted a less positive response from SBC.

"We welcome any and all competition to the state," said SBC Wisconsin president Paul La Schiazza. But he said AT&T's appearance in Wisconsin had less to do with wholesale network pricing than it did with SBC's intention to seek permission from the federal government to enter the long distance market in Wisconsin.

SBC provides service to about 1.3 million residential lines in the state and serves a majority of the population, La Schiazza said.

A PSC publication indicated that the company serves about 81 percent of the customers in its service area, while 19 percent of the customers are served by competitors.

Earlier this week, the PSC endorsed SBC's entry into the state's long distance market. SBC has not yet filed its application with the Federal Communications Commission, but plans to do so in the near future.

La Schiazza said the PSC's rate decision this week is unfair and forces SBC to let competitors use its infrastructure without getting paid for maintenance.

"We have reviewed the order carefully and we are not pleased with the outcome of that docket," he said. "We are evaluating our options, but I would tell you that it is safe to say that we will, in some way or fashion, challenge that order."

But Garvin said the PSC's decision is in line with what other states in the Midwest charge.

"One can disagree," he said. "But other entrants are making business decisions based on the rates we've established."

ON THE INTERNET

TDS Metrom: www. tdsmetro.com

SBC: www. sbc.com

AT&T: www.att.com

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To see more of The Wisconsin State Journal, or to subscribe to the newspaper, go to http://www.wisconsinstatejournal.com

(c) 2003, The Wisconsin State Journal. Distributed by Knight Ridder/Tribune Business News.

T, SBC,

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