At&T: Dialing For Direction

It's scrambling once more for a local-phone strategy

The collapse of AT&T Chairman Robert E. Allen's breathtaking plan to merge with Baby Bell SBC Communications Inc. is more than just an embarrassing gaffe. Sure, Allen's bizarre public spat with Federal Communications Commission Chairman Reed E. Hundt--a bitter exchange in the news media over the ramifications of a deal that AT&T never officially acknowledged --leaves AT&T image-makers working overtime to repair the damage. But the real harm is that AT&T is once more scrambling for a strategy to get into the local-phone business and give itself a chance to survive the accelerating market-share losses that deregulation is expected to bring to its core long-distance business.

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