Business Notes Regulation

In 1980, four years before the court-ordered breakup of American Telephone | and Telegraph, the Federal Government required the company to separate its telephone-service division from the unit that made and sold equipment. That step was taken to prevent Ma Bell from charging telephone customers for the cost of developing new communications systems.

Such concerns have since diminished. AT&T no longer provides local telephone service, and competitors have eroded the company's long-distance dominance. Recognizing those facts, the Federal Communications Commission last week reversed its 1980 decision and allowed AT&T to merge its long-distance and phone-equipment businesses. The ruling means that AT&T will no longer have to send different sales representatives to customers to sell services and hardware.

AT&T jubilantly announced that the FCC decision would allow it to save hundreds of millions of dollars annually by eliminating overlaps in areas such as marketing and administration. As a result, AT&T said, it will be able to offer customers lower prices on phone and computer equipment.