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AT&T Exits Local Service in State
Connecticut Telephone may reap 5,000-subscriber windfall
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Business New Haven
10/13/2003
By: BNH
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HARTFORD — Connecticut Telephone Inc. has agreed to take over AT&T’s 5,250 residential local telephone accounts in the state.
AT&T officials announced October 6 that the company was discontinuing local phone service because it was unable to operate profitably in the state. AT&T will continue to offer long-distance service to state residents.
AT&T customers may choose to go to any other in-state service provider before the end of the year.
Those who make no choice will be transferred to Connecticut Telephone.
The state’s Department of Public Utility Control (DPUC) has approved the transfer.
AT&T officials said their company could not compete effectively under the DPUC’s telephony rules. After state officials voted to deregulate the telephone industry in the mid-1990s, the DPUC set rates for service providers to buy space on SBC SNET’s system. Several companies have complained the rates are too high.
After two years of providing service, the rates charged by SBC SNET did not permit AT&T to achieve a fair return on its investment in Connecticut, according to officials of the latter.
There are about 100 local phone service providers in Connecticut, but most cater to businesses only.
For privately held Connecticut Telephone, however, the influx of soon-to-be-former AT&T customers is a welcome windfall.
"We look forward to welcoming the AT&T customers to Connecticut Telephone," said Rust Muirhead, CEO of Connecticut Telephone, in published reports. Muirhead said gaining 5,250 new customers represents "a significant increase" for Connecticut Telephone, but added that his company does not release subscriber numbers.
The customers’ rates will not change significantly, he said. Also, the AT&T customers will experience no interruption in service and will pay no fees.
Muirhead added that AT&T’s exit from the market is another sign the DPUC needs to change the rules governing local service competition to make it easier for companies to compete with SNET.
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