AT&T’s Dorman: Let’s stop fighting 

AT&T Chairman and CEO David Dorman, speaking yesterday at a conference sponsored by the American Enterprise Institute, said the telecom industry is “at a critical juncture,” and called for an end to the infighting that has kept growth and innovation on hold.

Specifically, Dorman said the continual rehashing of competition-related issues must end.

“We can choose to focus the resources of the FCC, our industry and our federal and state policymakers on re-fighting the battles of the past—and therefore holding hostage the future,” he said. “Or we can choose to invest resources to unleash the vast imagination and innovation that our industry is known for and America’s consumers have come to expect.”

However, Dorman couldn’t resist taking a few shots. He described as “clearly mistaken” the notion that competition is undermining investment, and said AT&T shared the Bell companies’ goal of deregulation, but only after “sustainable consumer choice” had been achieved.

“The most meaningful choice for consumers is through UNE (unbundled network elements). The benefit to consumers is no longer debatable,” Dorman said. “UNE is crucial to the building of customer bases that will support investment in facilities.” Dorman urged policymakers and the industry to work together to find a regulatory framework that would allow both competition and deregulation. He reminded them that the Bell companies currently are allowed to lease long-distance facilities, and that AT&T remained regulated in long-distance until its market share dropped to 55%, at which time it was deemed non-dominant. He said the same scenario should play out in the local sector.

“Competition should be irrevocable. We came very close to becoming revocable just a few months ago,” Dorman said, referring to the FCC’s Triennial Review, which threatened to remove incumbent carrier obligations to provide UNE switching.

A BellSouth spokesman responded by saying that the Bells don’t object to providing access to their networks, they just don’t want to do it at below-cost pricing. “If we had our druthers, we would opt for commercial pricing,” said spokesman Bill McCloskey. “Regulation should cover things like 911 and carrier-of-last-resort obligations and not commercial relationships.”

Dorman also took a swipe at MCI, which is poised to emerge from bankruptcy protection as early as next month, when he said policymakers should avoid giving “wrongdoers artificial advantages at the expense of honest players.”

Federal Bankruptcy Judge Arthur Gonzalez has yet to sign off on the MCI bankruptcy plan, but that’s seen as a formality as the company’s major creditors have approved it. In addition to the accounting fraud perpetrated by employees of the former WorldCom (now doing business MCI) that resulted in the misstatement of $11 billion in revenue over several years, the company also is under investigation for allegedly directing schemes that led to the rerouting or misidentification of long-distance traffic in an effort to avoid paying access charges. The results of these investigations, however, could have a significant bearing on whether Judge Gonzalez allows MCI to emerge from bankruptcy protection.