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AT&T Move to Cellular

September 27, 1993

* The Aug. 29 commentary by A. Michael Noll ("It's Ma Bell Against Her Grown-up Babies") is off base on some basic facts and quite simply misses the point on AT&T's reasons for acquiring McCaw Cellular Communications.

Contrary to Noll's assertion, the proposed merger with McCaw will not put AT&T back into the local telephone service business. If you have a cellular phone, look at your most recent bill for monthly service. Now look at your bill for regular wired phone service. Want to give up your wired phone and substitute it with cellular service? You make the call. Cellular calling clearly is a complement to local service, not a substitute. It will be a long time, if ever, before it can be offered at a price competitive with regular wired service.

The McCaw merger will not mark the first time, as Noll implies, that AT&T is exposed to "the risks of survival in the competitive jungle." Anybody who owns a television set and sees the commercials for AT&T, MCI and Sprint can figure out that Noll's statement simply isn't factual. AT&T has been engaged in such fiercely competitive business as long-distance service, telecommunications network equipment manufacturing and other lines of business for some time.

Competition, not monopoly, has been responsible for the advances (new technology, a variety of services and lower prices) that the long-distance industry has made over the last 10 years. If the country is to realize the full potential of its information infrastructure, it must see similar advances in local telephone service.

Noll says that, at the 1984 breakup of the Bell System, AT&T was "given" long-distance traffic between calling sectors within Bell company territories. This represented, he says, a "grab" or "theft" from the Bells, and provided, in large part, the profits used to finance AT&T acquisitions. Even a casual reader of the news pages from that period will recall that the breakup of the Bell System was the idea of the Department of Justice and that it has been presided over by a federal judge. A "theft" and "grab" under the eyes of the Justice Department and a federal judge?

Noll's gloomy view results from several fundamental misreadings of where our industry has been for the past decade and what we have learned over that time. We believe that combining the strengths of AT&T and McCaw will improve the quality of wireless services, speed the introduction of new features and give customers more choice. It is precisely these twin goals of serving customers and share owners that are driving the McCaw acquisition in the first place.

ROSS MARKWARDT

AT&T Public Relations Vice President

Los Angeles

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