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AT&T's Allen Looks at 10 Years of Flux

Ma Bell breakup brought both expected and unforeseen challenges

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WHEN the United States split up the family of Ma Bell 10 years ago last month, skeptics wondered whether American Telephone & Telegraph Co. - Ma Bell, herself - could compete in the demanding marketplace of telecommunications.

AT&T made mistakes along the way: false starts in the computer business, a recent series of embarrassing network glitches, and letting its rivals grab a third of the domestic long-distance market. But the question is no longer whether AT&T can compete, but how it will compete in an era when the distinctions between computing and telecommunications are disappearing.

AT&T chairman Robert Allen talked about these trends in an interview last week.

What's been AT&T's biggest success since divestiture?

The best thing is really the evidence ... that the marketplace works. The whole concept here was to separate the competitive business from the monopoly business. It has not been easy for AT&T to make the transition.

But I think the transition has been worth it. And I think people will look back on that event sometime in the future and say: That was the right thing for this country.

What's been your biggest disappointment?

The great promise was that this company, which would be fully competitive, would in effect be deregulated. The long history of governments at the state and federal level trying to protect the consumers from large monopoly companies - that has not disappeared. So we operate in a competitive environment with a lot of handicaps today. Progress has been made but it's very slow.

I ought to mention one other disappointment. We in effect planted flags on the shores of the US and said to everybody: "Come on in. This is going to be an open and free market. Everybody's permitted to play." And we did not get any kind of reciprocal opportunity [in foreign markets].

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