AT&T has applied to become a public telecommunications operator in the UK domestic market and to be allowed to provide a complete service from Britain to the US based on leased lines.
The application will fuel the debate between the two governments over market access for foreign firms. The Department of Trade and Industry is willing to license new domestic public telecommunications operators. However, it has so far refused to grant 'simple resale' licences, which would allow companies other than BT and Mercury to operate telephone services to the US. The reason given is that no reciprocal arrangement exists in that country.
AT&T said it had asked both the Federal Communications Commission and the Clinton administration not to approve a BT request to be allowed to provide simple international resale. BT also plans to ask for permission to offer calls onwards from the US to other parts of the world. The British group said that the AT&T move should be good for all if it helps to sort out the regulatory position and remove restrictions on both sides of the Atlantic.
Bruce Bond, BT's director for products and services, said: 'We can go one-on-one with anybody. We expect them to be here competing and I am sure they expect us to be over there. The question is when.'
The DTI said that all applications for telecommunications licences are viewed positively. However a spokesman said that international simple resale is allowed so far only to Canada, Sweden and Australia.
Only one company, ACC Long Distance, an American company that wants to provide services to the three favoured countries, has been granted an international simple resale licence by the DTI. Sprint, another US telecommunications company, has been waiting for more than a year for domestic and international licences in the UK. Sprint believes it has been blocked because of the restriction in calls to and from the US.
John Foster, AT&T's vice-president for European communications services, said: 'AT&T is eager to compete for customers in the United Kingdom on the same terms and at the same time that BT can compete for American customers.' He said that if a licence were granted, AT&T would then back BT's application in the US.
AT&T would also pose a threat to Mercury, BT's main rival, as it would target the business community and the international call traffic on which Mercury has focused so far. AT&T would offer service to the US and Australia, Canada and Sweden.
View from City Road, page 24Reuse content